[lab122]

This will be my 4th time taking audit next week. There are two sims that I had on both of the last two audit exams I took. I can’t remember the exact details, but I know the general questions. If I have been missing these, I really want to change that, especially if I get them for a 3rd time (unlikely).

First: How is net income affected by the following independent situations?

1.) Accrued expense needs to be adjusted down.

2.) Rent expense need to be adjusted up.

3.) Accrued payroll needs to be adjusted up.

Basically is net income affected by these and how?

Second: Control Risk and Detection Risk – How are they affected?

Instead of stating situations, my question here is if detection risk increases, then control risk needs to decrease correct? On the exam, there are multiple independent situations and then I had to decide if they changed and how.

It’s time for me to pass this one. If I could get some help on these just so I know I’m answering them correctly, I think that will help me mentally. Thanks!

REG: 55,60,76 Passed
BEC: 71,73,77 Passed
AUD: 59,67,72,72, 90!!! Passed
FAR: 45,52,74,70,79 Passed!!!

I'm done!!!!

[Anonymous]

1.) Accrued expense needs to be adjusted down. – If you are lowering an accrued expense, then your expenses decreases, therefore net income increases.

2.) Rent expense need to be adjusted up. – Increase your rent expense, Decreases net income.

3.) Accrued payroll needs to be adjusted up. – Increase your Payroll expense (dr Payroll expense, Cr Accrued Payroll), decreases net income.

if Control Risk Increases (risk that controls wont prevent a misstatement), then the risk that a materially misstatement will not be detected goes down because you will do more procedures to get comfortable with the balances/transactions. Hope that helps! I'm in the same boat and need to pass it on my third try on Friday.

[Author]

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