[cpahopeful]

Kind of a broad topic, but I am having trouble memorizing the testing of the various cycles (completeness, cutoff, valuation, etc…) and segregation of duties. Does anyone have any tips or tricks to remember them?

[Biff Tannen]

If it makes you feel any better, I did not come across any transaction cycle questions in the actual exam. Just remember that “tracing” is used to test the completeness of expenses and liabilities (there’s a greater risk that management will understate liabilities or expenses), while vouching is used to test the existence of revenue and assets.

For segregation of duties, all you need to remember is to keep the following three tasks separated (use the mnemonic “ARC”):

Authortization
Record-keeping
Custody of assets

You really don’t need to get into the weeds memorize all the details. I’d encourage you to have a strong understanding of the differences between compilations, reviews, and audits. I’d study those rather than transacation cycles.

[HT415]

I have seen questions here and there regarding assertions on my practice exam and the real thing, here's how I memorize them.

What helps is if you can use the examples in the questions or just read them over and over until you make sense out of it.

For ex.
– we test the completeness of liabilities to check for understatement of obligations, in English, we want to make sure the entity isn't leaving out obligations that it owes and trying to avoid recording them.
– existence of inventory – we want to make sure inventory that is shown on the inventory detail listing actually exists (we can see it) and to test it, we perform inventory counts/observations to physically view the inventory
– cutoff – think “timing”, “when should this transaction be recorded?”, assuming the entity follows full accrual accounting, we know that expenses should be recorded when incurred, revenue should be recognized when earned

I just use really simple examples like those above to really try to understand what is going on and why these procedures are performed.

[Author]

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