[SusanStudies]

Q: An auditor would be most likely to identify a contingent liability by obtaining a(n)

A: A standard bank confirmation

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I am having difficulty understanding how a bank confirmation would identify contingent liabilities. When I think of contingent liabilities I think of possible legal or environmental liabilities. How would a bank know if a company has contingent liabilities? Can someone shed some light for me?

Thanks a bunch,

AUD: 07/11/11 - Passed
BEC: 08/27/11 - Passed
FAR: 01/17/12 - Passed
REG: 04/30/12; Re-take 7/16/12 - Passed

FINISHED!!!!!!!!

[kb24]

Contingencies include actual or possible claims and assessment and guarantees of the indebtedness of others. One of the procedures the auditor should perform is to review bank confirmations for hidden bank loans, discounted drafts, guarantees of notes, etc.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[Bob Moritz, CPA]

@ SusanStudies kb24 is right on. The bank confirmation may also show any collarteral that has been put up for a loan as well.

[Meggie]

does any body know sell the 2011 Auditing Willey auditing ,problems and solutions?

do you think it is helpful ?

thank you .

i will take Auditing middle of July

[kb24]

Meggie

I didn't understand the first part of your question. As far as the second part, the Wiley text isn't the easiest to use because it's very condensed and written in a semi-outline form which can be difficult to read. I used it as a supplemental text rather than my primary one. I really liked Wiley for the problems. There are lots of them, and they do a good job covering the material. I'd also recommend the Wiley test bank. It has more problems, most of which aren't in the text.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[SusanStudies]

Thanks a lot kb and aicpa. Your explanation helped me to understand other liabilities I did not consider.

@ kb: you mentioned in another post that you memorized the AUD standards but suggested we need no memorize, just study them. How did you approach the standards? Did you study them as you went along or go back and study them all at one time? Also, how did you approach the governmental auditing? Is there a good source regarding the AUD of governemental entities that I should know?

Thanks for your help. I know you just went through all of this. 🙂

AUD: 07/11/11 - Passed
BEC: 08/27/11 - Passed
FAR: 01/17/12 - Passed
REG: 04/30/12; Re-take 7/16/12 - Passed

FINISHED!!!!!!!!

[kb24]

susan studies

I would have my audit text in the bathroom with me when I was getting ready in the morning, and I'd read and recite the standard report and audit standards as I put on makeup and did my hair. (My husband looked at me as if I was crazy when I was doing this.) I have a good memory and was able to memorize all of this during this extra study time. I made notes as to how the wording differed and where it was located in the other types of reports and studied this during my more “normal” review time. I don't know of any other available free source re governmental auditing. I just studied Becker, Wiley, and did all the problems in the Wiley test bank. This was sufficient for me, but I also think I had an easier than average AUD exam.

Hope this helps. Good luck with your exam.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[Anonymous]

Hello everyone,

Would anyone be able to explain the difference btwn attestation engagements and assurance services? The Becker text doesnt seem to explain the difference well or at least not to my liking.

[kb24]

From Wiley

Attestation – CPA engaged to issue an examination, review, or agreed-up procedures report on subject matter, or assertion about subject matter, that is the responsibility of another party.

Assurance – broader concept of attest function which provides assurance on broad variety of types of financial or nonfinancial information

Audits, reviews, and compilations are types of attestation functions. WebTrust is an example of assurance service.

Does this help?

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[Anonymous]

Yes that helps me. Thank you KB24. I appreciate your time.

[Author]

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