[Srednas12388]

Does anyone know why the answers of these two questions are different? I know its probably something simple but its been driving me nuts trying to figure out where it explains why its different in my Becker review book.

1)

How does an auditor make the following representations when issuing the unmodified audit opinion on comparative financial statements?

Consistent Examination

application of of evidence

accounting principles on a test basis

a. Explicitly

Explicitly

b. Explicitly

Implicitly

c. Implicitly

Explicity

d Implicitly

Implicitly

Choice “d” is correct. Consistency is implicit in the auditor’s report, and will be explicitly mentioned in an emphasis-of-a-matter paragraph only if there are issues with consistency. There is no explicit reference to “test basis.” The report says “An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.”

AND THIS QUESTION

2)

How does an auditor make the following representations when issuing the standard auditor’s report on comparative financial statements under PCAOB standards?

Examination of Consistent

evidence on a application of

test basis accounting principles

a .Implicitly

Explicitly

b. Explicitly

Explicitly

c. Explicitly

Implicitly

d. Implicitly

Implicitly

Choice “c” is correct. Explicitly – Implicitly.

Under PCAOB standards, the auditor explicitly states in the scope paragraph of his opinion: “an audit includes examining, on a test basis, evidence supporting…”

Consistency is implied in the auditor’s standard report under PCAOB standards.

Thanks. I know consistency is always implied. Is the only difference that the report is worded differently when issued under PCAOB standard than in the audit of a nonissuer? And I guess the first question is just assuming its an audit of a nonissuer?

Any help is appreciated I know its one question with probably a very easy answer but its really been annoying me.

[Srednas12388]

I just reformatted the entire question to make it easier to read but it posted like this for some reason.

[Srednas12388]

I just reformatted the entire question to make it easier to read but it posted like this for some reason.

[Kimboroni]

So there are supposed to be two items:

Examination of evidence on a test basis

AND

Consistent application of accounting principles

?

Yes, the report for an issuer specifically says the “on a test basis” verbiage, whereas it does not for a non-issuer. It just didn't tell you on the first one that they were talking about non-issuers.

But I think the test might be better written so that you know for each one if they are talking about issuer vs. nonissuer. I don't remember wondering what they were asking about. But I think for prep, you should generally assume that it is an AICPA standards question, unless they specify PCAOB/public/non-issuer, etc.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Kimboroni]

So there are supposed to be two items:

Examination of evidence on a test basis

AND

Consistent application of accounting principles

?

Yes, the report for an issuer specifically says the “on a test basis” verbiage, whereas it does not for a non-issuer. It just didn't tell you on the first one that they were talking about non-issuers.

But I think the test might be better written so that you know for each one if they are talking about issuer vs. nonissuer. I don't remember wondering what they were asking about. But I think for prep, you should generally assume that it is an AICPA standards question, unless they specify PCAOB/public/non-issuer, etc.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Srednas12388]

Thanksss ! Missed audit by a point last time around so im doing anything and everything to make sure I dont have to go through this again.

AUD – 74, Retake 2/11/14

FAR – 84

REG – May 2014

BEC – May 2014

[Srednas12388]

Thanksss ! Missed audit by a point last time around so im doing anything and everything to make sure I dont have to go through this again.

AUD – 74, Retake 2/11/14

FAR – 84

REG – May 2014

BEC – May 2014

[Kimboroni]

I don't know if some tips will help, but here a few. Read each question carefully, and establish for sure if they are talking about private or public; if it is for comp, review, audit, or other; if you're looking for the one right answer or the one wrong answer, etc.

Come up with an answer first before looking at the choices, and then find the choice that most closely matches– my Wiley books suggested that. If it helps, cover the choices with your hand, or sometimes I used the on-screen calculator to cover them. The font seemed really big to me, and it was distracting.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Kimboroni]

I don't know if some tips will help, but here a few. Read each question carefully, and establish for sure if they are talking about private or public; if it is for comp, review, audit, or other; if you're looking for the one right answer or the one wrong answer, etc.

Come up with an answer first before looking at the choices, and then find the choice that most closely matches– my Wiley books suggested that. If it helps, cover the choices with your hand, or sometimes I used the on-screen calculator to cover them. The font seemed really big to me, and it was distracting.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Author]

Replies