[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for AUD.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

[GiniC]

Attribute sampling is usually about controls, and asks yes/no questions, not dollar amounts. A is the only one that can be yes/no, so A

@Forem004 – you sound like me, preparing to the max! Remember passing is what counts, you only need a 75 not a 99!

[pharaoh]

An auditor concludes, prior to the audit report release date, that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements. If the auditor concludes that the financial statements do not require revision, but the client refuses to revise the other information to eliminate the inconsistency, the auditor should communicate the matter to those charged with governance and may:

A.revise the auditor’s report to include an other-matter paragraph describing the material inconsistency.

B.issue a qualified opinion after discussing the matter with the client’s board of directors.

C.consider the matter closed, because the other information is not in the audited financial statements.

D.disclaim an opinion on the financial statements.

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[Forem004]

A is correct.

pharaoh is yours A?

[Forem004]

Which of the following is a false statement regarding communications to management and others that fraud or noncompliance with laws and regulations may have occurred?

A.
The accountant need not report matters that are clearly inconsequential.

B.
When matters regarding fraud or noncompliance involve senior management, the accountant should report the matter to an individual or group at a higher level with the entity, such as a manager (owner) or the board of directors.

C.
The communication must be in writing.

D.
When matters regarding fraud or noncompliance involve the owner of the business, the accountant should consider resigning from the engagement.

[pharaoh]

For my question, A is correct

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[GiniC]

A. ANYTHING related to fraud must be communicated to those charged with governance.

[Forem004]

It's actually C. clearly inconsequential matters can be communicated orally

[Forem004]

That was my assumption, but this is the actual ninja explanation.

The communication regarding fraud or noncompliance with laws and regulations may be oral or written. If the communication is oral, the accountant should document it.

[Forem004]

Which of the following courses of action is the most appropriate if an auditor concludes that there is a high risk of material misstatement?

A.
Use smaller, rather than larger, sample sizes

B.
Perform substantive tests as of an interim date

C.
Select more effective substantive tests

D.
Increase of tests of controls

[Anonymous]

C. Select more effective substantive tests

[pharaoh]

C

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[Forem004]

Correct!

According to the standards of the profession, which of the following would be considered a part of a consulting services agreement?

Expressing a conclusion about the reliability of a client's financial statements
Reviewing and commenting on a client-prepared business plan
A.
I only

B.
II only

C.
Both I and II

D.
Neither I nor II

[GiniC]

Hmmm…

Definitely not A, B is also unlikely since later is more effective. If RMM (including control risk) is already set, it must be C, select more effective substantive tests.

[pharaoh]

B

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[GiniC]

Very uncertain here – B (only the business plan one)?

[Author]

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