[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).

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Forem004]

Those are both right. I was worried for the right reasons. The majority of my questions were about situations that are very rare audit occurrences. I feel 50/50 on this but I definitely didn't pass with flying colors!

[pharaoh]

Many people feel that they did bad and they pass. I hope it's the same for you.

I was going to ask if you felt that Ninja questions were helpful or not but I would say by taking the exam what would you do differently or recommend to us?

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

[Forem004]

I felt really good with the Ninja questions, as I have the last three times. I failed FAR and REG once with other software and then passed after doing many multiple choice and light work on simulations and practice exams. I passed BEC on the first try (granted barely passed) with doing plenty of multiple choice and reading over the written portions the last few days. I actually forgot to take any practice exams for that one.

But from the beginning of Audit, I was extremely worried because I know so much more about it, which makes it easier to get confused. Does that make sense? Like I said, the majority of my questions concerned audit situations that are very rare. I feel like I got 100% on two simulations, hopefully at least about 75% on three, but maybe only 50% on two simulations. Someone correct me if I'm saying too much, but one simulation asked for what I felt like could have been two different opposing scenarios for each answer. So I was very unsure about that one. I think overall Ninja is very helpful, so I would continue doing the multiple choice and simulations. I feel like I focused on exactly what I saw, whereas my exam was on those same topics, just more in depth. So, I recommend looking further into the situations posed in each problem and wish I had done just that over the last week! The next 11 days are going to drive me crazy, but will hopefully fly by since I have a full day at work tomorrow and then start my most time consuming and in depth audit of the year on Wednesday!

I'll check in on here at night if I have time to see if I can add any help to you guys! When's everyone else testing?

[pharaoh]

exam on the 10th, this saturday.

I know exactly what you mean because I used to be an auditor until 2009, so i feel you. Sometimes I feel I got it and I am ready for the exam and then I feel that I am scared that I am too confident and it can be tricky.

My weak areas are sampling, special reports and Governmental

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

[GiniC]

I'm testing the 10th

[Ny1105]

Hello, i have a quick questions about independence regarding close relatives…

I was wondering in regards to close relatives if the 5 percent stock ownership rule applied for them as well and also, when it says impairs independence if member is aware. Does that mean if the close relative is not aware, it doesn’t apply to them than?

[GiniC]

Keep in mind how “close relative” is defined: “A parent, sibling, or nondependent child”, and the rules all seem to say if the CPA “knew or should have known”. I think it would apply unless the CPA could show somehow that the “close relative” has been estranged for a long period of time.

[GiniC]

I left space so you can try the question before looking down at the answer. Can anyone tell me what would be held in a brokerage account besides cash and securities? Sorry if that sounds like a naive question, but I have limited investing experience.

Each of the following broker-dealer relationships impairs auditor independence with respect to a broker-dealer issuer audit client, except:
a. The auditor has a brokerage account that includes assets other than cash or securities.
b. The auditor has a brokerage account that holds U.S. securities in excess of Securities Investor Protection Corporation coverage limits.
c. The auditor has a brokerage account that holds both U.S. securities and assets other than cash or securities.
d. The auditor has a cash balance in a brokerage account that is fully covered by the Securities Investor Protection Corporation.
.
.
.
.
.
.
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Explanation
Choice “d” is correct. An auditor's independence is not impaired if the auditor has a cash balance in a brokerage account that is fully covered by the Securities Investor Protection Corporation.
Choice “c” is incorrect. An auditor's independence is impaired if the broker-dealer account includes assets other than cash or securities.
Choice “b” is incorrect. An auditor's independence is impaired if the broker-dealer account amount exceeds the Securities Investor Protection Corporation coverage limits.
Choice “a” is incorrect. An auditor's independence is impaired if the broker-dealer account includes assets other than cash or securities.

[pharaoh]

You are right. the most common is cash and securities. I was thinking Jewelry but not sure if that will be kept at a Brokerage

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

[pharaoh]

Which of the following statements correctly defines the term “reasonable assurance”?

A.A substantial level of assurance to allow an auditor to detect a material misstatement

B.A significant level of assurance to allow an auditor to detect a material misstatement

C.An absolute level of assurance to allow an auditor to detect a material misstatement

D.A high, but not absolute, level of assurance to allow an auditor to detect a material misstatement

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

[GiniC]

I think jewelry would be in a bank safety deposit box rather than a brokerage. I just can't think of anything that a brokerage firm would hold besides securities and cash. I tried to Google it, but came up empty.

[GiniC]

D.A high, but not absolute, level of assurance to allow an auditor to detect a material misstatement

An audit performed in accordance with 2 CFR 200 single audit will expand the auditor's responsibilities beyond generally accepted auditing standards. The auditor's expanded responsibilities include:
a. Performance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have a direct and material effect on major
federal award programs.
b. Performance of additional procedures to test and report on achievement of program objectives.
c. Performance of additional procedures to test and report on compliance with laws, rules, regulations and provisions of contracts or grant agreements that have any effect on federal award programs.
d. Performance of additional procedures to test for noncompliance with laws, rules and regulations targeted for review by the Office of the Inspector General.

[pharaoh]

Yes. D is correct

ummmm… Answer A?

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

[GiniC]

Yep, A. This one I got wrong twice…
.
.
A report on internal control over compliance will include which of the following assertions?
a. Identification of material weakness in the event an adverse opinion is expressed.
b. Disclaimer of opinion in the event that significant weaknesses are identified.
c. An opinion as to whether internal controls were adequate to provide reasonable assurance that the organization would comply, in all material respects, with laws rules and regulations.
d. A disclaimer of opinion on internal control over compliance.

[pharaoh]

umm… C

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

[Author]

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