[Tootsie]

So I thought it could be fun to have a game where we post AUD questions to help us study and if you know the answer, post it and ask another question. I’ll go first. What are the 10 GAAS?

FAR - 76
AUD - 88!!! DONE!!!!!!!!
BEC - 76
REG - 77

never, never, never give up

[MCLKT]

1. regarding the SCF omitted – read over AU-508.43-44 and example Independent Auditor Report (this is really short but be familiar with it). This is probably a good rule to know.

2. If the question makes no reference to materiality, always assume it is material.

Any departure from GAAP will always be: Qualified or Adverse.

A:[73]97 F:[74]85 R:86 B:[74]82
*NINJA 10 Pt. COMBO & Yaeger*

[SeattleAccountant]

When statement of cash flow is omitted, opinion is QUALIFIED (not adverse) as specified in authoritive literature.

AU 508.43 “If a company issues financial statements that purport to present financial position and results of operations but omits the related statement of cash flows, the auditor will normally conclude the omission requires qualification of his opinion.”

AU 508.44 provides example of “except for opinion” and expla para before such opinion for the company that omitted its cash flows statement.

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[Anonymous]

Get em Seattle. Its definitely qualified.

[Anonymous]

Just came across this one that I got wrong and thought I'd share.

Q. Which of the following, if any, is prohibited by the AICPA Code of Professional Conduct?

a. All are permitted.

b. Use of the partnership name for a limited period by one of the partners in a public accounting firm after the death or withdrawal of all other partners.

c. Failing to provide working papers to the client after a request has been made.

d. Practice of public accounting in the form of a professional corporation that uses a firm name indicating specialization.

[MCLKT]

@LittleNumberRobot –

Projection and Forecast are not the same.

Forecast can be use for the general public (I remember by thinking of the weather forecast broadcasted for anyone to see)

Projection has restricted use. (think of Clueless… “squeee… project!” it's only for the ones allowed in the clique, lol)

https://www.youtube.com/watch?v=K5G1rUewM9o

A:[73]97 F:[74]85 R:86 B:[74]82
*NINJA 10 Pt. COMBO & Yaeger*

[MCLKT]

@BAFR

B. is allowed for up to 2 years I think

C. CPA owns the workpapers, never required to give provide to client

D. I don't recall anything like this, so I would assume it's ok….

I pick “A”….?

A:[73]97 F:[74]85 R:86 B:[74]82
*NINJA 10 Pt. COMBO & Yaeger*

[skintapeup]

C

[Anonymous]

Ha it's been a while since I took audit buuuut I'm thinking its “B”. The only reason I think that is bc although you can still use the partnership name after death or withdrawal of a partner for a period of time, if ALL the other partners withdraw it seems like it would cease to be a partnership. Ack, not too sure though!

[Anonymous]

The correct answer is actually A. You are correct MCKLT. I initially chose D because I hadn't seen that one before but it just goes to show that you should ignore the ones that look really weird.

[jamesb]

@MCLKT….you are right, if material level isnt mention, just assume, its materials.

@littlenumberrobot..Omitting SCF is Qualified or Adverse…I was confusing it with Auditor being Justified in Departure of GAAP, which is different from omitting cash flow. Same as my previous error, where I assumed significant materiality and for this, I assumed Auditor being justified.

lession learned: I will not assume anything unless it explicit says in question

AUD: TBA-
FAR Done
BEC Done

Becker
NINJA for AUD

[Mjs157]

Hate to be a jerk, but two of the accepted answers are wrong.

D21: An auditor need only understand and document the understanding of the system of internal controls. If an auditor decides that it will be inefficient to perform tests of controls (T.O.C) to lower audit risk to an acceptable level, or based on the understanding of the internal controls, assesses CR at the maximum level, the auditor need not perform T.O.C. However, there are such instances where T.O.C are mandatory, even for non issuers.

The first question…. TID – PIE – GCDO.

Someone accepted that the accounting MUST be GAAP; that is incorrect. The auditor can perform an audit of F/S that were prepared under OCBOA. But, must so state in the auditor's report whether the F/S are in compliance with GAAP (and then in compliance with OCBOA).

Question:

In what case would an audit of the F/S require T.O.C. for a private company?

[Lost1]

mjs157 – isn't test of controls necessary based on preliminary judgement about materiality through understanding entity's IC/ other background in order to establish RMM, which will enable auditor to come up with DR and therefore level of substantive tests? Maybe this isn't what you were asking.. i wouldl like to know your answer to your question.

I keep finding these “inconsistency” in review materials/test bank questions .. here's one I found bug I will ask as a question

(True/False) providing bookkeeping services as well as perform the audit is allowed under AICPA/PCAOB as long as the firm does not determine journal entries, authorize transactions, prepare or modify source document.

true or false? please explain your answer! (I have AUD exam tomorrow morning at 8, hopefully someone can answer this tonight!)

"If you can do it, I can do it better."

[Anonymous]

@ CPAismyonlywayout

AICPA allows a CPA to provide bookkeeping services as well as perform the audit. However, this is disallowed per SOX and SEC which is appliable to public companies. I am therefore going to select False.

[jaredo155]

I know this was sort of already answered, but the reason a forecast is general use and a projection is restricted use, is because a forecast is based on historical normal trends, while a projection is based on predicted future market conditions. So a forecast is considered to fall within the rule of conservatism, while a projection is not.

AUD - 2/2013 - Passed!
BEC - 5/2013 - Passed!
FAR - 8/2013 - Passed!
REG - 11/2013 - Passed!
"Do or do not, there is no try." - Yoda

[SeattleAccountant]

here is one:

“A declaration by a court that the CPA is insane or incompetent is” falls under which_____ jurisdiction and calls for what action____?

hehe, it was actual question on one of my undergrad exams

Becker Class of Jan - Aug 2013: FARB DONE!!!!
CPA license pending 🙂

[Author]

Replies