[sar_rah]

Compilation of all audit mnemonics…you’re welcome!

A1

Unmodified Report—MR DIM REPORT CRAME

• MR—Management Responsibilities:

o DIM- Design, Implementation, & Monitoring of Internal Controls

• R-auditor’s Responsibilities—Refers to GAAS

o E-Express and opinion on the financial statements based on the audit

o P-Plan and perform the audit to obtain reasonable assurance about whether the F/S’s are free form material misstatement

o O- Obtain audit evidence about the amounts and disclosures in the F/S by performing procedures

o R-Risks of material misstatement assessment affects the procedures selected

o T-Test internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in circumstances

o C- internal CONTROLno such opinion is expressed on the effectiveness of controls unless the auditor does have responsibility over reporting on the effectiveness of internal controls in conjunction with the audit of the financial statements, then ignore above

o R- Reasonableness of

♣ A- accounting estimates

♣ M- made by management and

♣ E- evaluating the overall presentation of the financial statements

Procedures—Auditor should evaluate evidence obtained from the following procedures—ADMITS

• A- Analytical procedures

• D- Debt compliance—the auditor should review the terms of debt and loan agreements

• M- Minutes—the auditor should review minutes from the stockholder and board of director’s meetings

• I- Inquiry of client’s legal counsel

• T- Third parties—The auditor should confirm the details of financial support arrangements

• S- Subsequent events review

Conditions and Events—Based on the procedures performed, the auditor identifies conditions and events that may be indicative of substantial doubt—FINE

• F- Financial difficulties

• I- Internal matters

• N- Negative trends

• E- External matters

Mitigating factors—Auditor is required to consider mitigating factors in managements plans when they believe there is substantial doubt about an entity’s ability to continue as a going concern—BIDS

• B- Borrow more money or restructure debt

• I- Increase ownership equity

• D- Delay or reduce expenditures

• S- Sell assets or liquidate

Updating/Changing Prior Opinions—disclose reasons in the “emphasis of matter” or “other matter” paragraph that discloses—DORCS (only DORCS change their mind)

• D- Date of the auditor’s previous report

• O- Opinion type previously issues

• R- Reason for the prior opinion

• C- Changes that have occurred

• S- Statement that the “opinion…is different”

Auditors responsibility for subsequent events—perform the following procedures—PRIME

• P- Post balance sheet transactions: review proper cutoff and to better evaluate year-end balances

• R- Representation letter should be obtained from management regarding whether any events occurred during the subsequent period that require adjustments to or disclosures in the financial statements

• I – Inquiry of management of whether any subsequent events effect the F/S

• M- Minutes of stockholders, directors, and other committee meetings should be read during the subsequent period

• E- Examine latest available interim financial statements; compare them with F/S’s under audit

A2

When performing a compilation, accountant is required to have a general understanding of client’s business—STAFF

• S- Staff qualification

• T- Transaction types and frequency

• A- Accounting basis used to prepare F/S

• F- Form of the accounting records

• F- Financial statements’ form and content

Review Requirements—U LIAR CPA

• U- Understanding with client

• L- Learn/obtain sufficient knowledge of entity’s business

• I- Inquiries should be addressed to appropriate individuals/ inside management

• A- Analytical procedures should be performed

• R- Review—other procedures should be performed

• C- Client representations letter should be obtained from management

• P- Professional judgment should be used to evaluate results

• A- Accountant (CPA) should communicate results

11 attestation standards—general, fieldwork, reporting—TIPPY PASSER

• General standards:

o T- Training and proficiency

o I- Independence

o P- Performance/due professional care in planning and performance

o P- Professional, adequate knowledge of subject matter

o Y- Your belief that subject matter is capable of evaluating criteria that is suitable and available to users

• Fieldwork standards:

o P- Planning and supervision

o A- Appropriate, sufficient evidence to provide a reasonable basis for the conclusion

• Reporting standards:

o S- Subject matter or the assertion being reported on and the character of the engagement (nature and scope) must be identified

o S- Significant reservations about the engagement must be disclosed

o E- Express conclusions about the subject matter or the assertion in relation to the established or stated criteria

o R- Restrict use of report to specified parties when:

♣ Criteria only appropriate for or available to limited number of parties

♣ Reporting on subject matter and a written assertion has not been provided

♣ Reporting on agreed-upon procedures engagement

Agreed-upon procedures engagement conditions—I AM SURE

• I- Independent of the practitioner

• A- Agreement of the parties

• M- Measurability and consistency

• S- Sufficiency of procedures

• U- Use of report is restricted to specified parties

• R- Responsibility for the subject matter by client/client states 3rd party

• E- Engagements to perform agreed-upon procedures on prospective financial statements MUST include a summary of significant assumptions

A3

Assessing the Risks of Material Misstatement—perform series of steps—IM A CPA

• I- Internal control—obtain and understanding of the entity and its environment, including its internal control

• M- Material misstatement—assess the risks of material misstatement

• A- Assessed level of risk—respond to the assessed level of risk by designing further audit procedures based on this assessment

• C- Controls testing—test internal controls to evaluate their operating effectiveness

• P- Perform substantive procedures

• A- Audit evidence—evaluate the sufficiency and appropriateness of audit evidence obtained

Five components of internal control—CRIME

• C- Control environment—PHRASED C— (Philosophy and operating style of mgmt., HR, responsibility over reporting—EBOCA—ethics values, board oversight, organizational structure, commitment to competence, accountability)

• R- Risk assessment—management’s identification of risk

• I- Information and communication systems—a means of recording transactions and communicating responsibilities

• M- Monitoring—assessment of internal control performance over time

• E- Existing control activities—control policies and procedures—PAID TIPS

o P- Pre-number documents

o A- Authorization of transactions

o I- Independent checks to maintain asset accountability

o D- Documentation

o T- Timely and appropriate performance reviews

o I- Information processing controls

o P- Physical controls for safeguarding assets

o S- Segregation of duties

Documentation—the auditor must document the understand of the design and implementation of the entity’s internal controls—FIND

• F- Flowchart—depicts auditors understanding of I.C. systemuse for complex structure

• I- Internal control questionnaire or checklist

• N- Narrativeuse for less complex control structures

• D- Documentation from the client, including copies of the entity’s procedures manuals and organizational charts

Segregate the following I.T. duties—COPAL

• C- Control group

• O- Operators

• P- Programmers

• A- Analysts (systems)

• L- Librarians

Audit evidence hierarchy—AEIO

• A- Auditor knowledge

• E- External evidence

• I- Internal evidence

• O- Oral evidence

A4

Standard Auditing Procedures—used in every audit as risk assessment procedures, tests of controls, or substantive tests—FIVE CARROT CARS

• F- Footing, cross-footing, and recalculation

• I- Inquiry

• V- Vouching back from F/S to supporting documents existence/occurrence

• E- Examination/inspection

• C- Confirmation

• A- Analytical Procedures

• R- Reperformance

• R- Reconciliation

• O- Observation

• T- Tracing forward from source documents to accounting records completeness

• C- Cutoff Review

• A- Auditing related accounts simultaneously

• R- Representation letter at end of fieldwork

• S- Subsequent events review

Account balance assertions—CVER

• C—Completeness

• V—Valuation, allocation, and accuracy

• E—Existence and occurrence

• R—Rights and obligations

Transactions and events—COVEU

• C—Completeness

• O—cutOff

• V—Valuation, allocation, and accuracy

• E—Existence and occurrence

• U—Understandability and classification

Presentation and disclosure—CVRU

• C—Completeness

• V—Valuation, allocation, and accuracy

• R—Rights and obligations

• U—Understandability and classification

Determine if estimates are reasonable—SSSD

• S- Significant

• S- Sensitive to variation

• S- Subjective/susceptible to management bias

• D- Deviation from historical patters

Contingencies from litigation, claims or assessments may arise from—GAPPI

• G- Guarantees of the indebtedness of others

• A- Actual or possible claims and assessments

• P- Product warranties

• P- Pending and threatened litigation

• I- Income tax disputes

A6

Quality Control Standards—HELP ME

• H- Human resources

• E- Engagement/ client acceptance and continuance to minimize likelihood of associating with a client whose management lacks integrity

• L- Leadership responsibilities

• P- Performance of engagement

• M- Monitoring

• E- Ethical requirement

AUD: 98
REG: 91
BEC: 86
FAR: 83

DONE DONE DONE and DONE all on the first try! It IS possible, just keep on studying!

[Tipofga80]

PIN this to the top of AUD!!! Good stuff.

REG - 77 (will lose in Jan 2016)

BEC - 67 74, 75

AUD - 56, 70, Will try again 🙁

FAR - ??

Save the beast for last.

[ruggercpa2b]

@King you are not allowed to delete or discard anything, however, you can make additions to the file within 60 days.

AUD - 73, 72 retake 7/2/2016
BEC - 8/20/2016
REG - TBD
FAR - TBD

I am so ready for this nightmare to be over. Been at this way too long.

[Birdman]

Can you say HiYA!

FAR- 74, 78 (10/15)
BEC- 73
REG- 65, 88 (05/16)
AUD- 7/16

[Pokey]

I love you…. 😉 Thank you!!

AUD - 74 (3x), TBD
BEC - Sept16
FAR - TBD
REG - TBD

[ssegura01]

Thanks!!!

Silvia

[waffle_house]

You da real MVP

[mrsmadhuanand]

Thank you!!

[S1CPA]

Very nice. Marking this in case I need to take this exam again. Thanks!

AUD - 80 April 2015
FAR - 77 August 2015
REG - 60 October 2015, 73 May 2016, 75 July 2016
BEC - 79 January 2016

[sar_rah]

You're all so welcome 🙂

AUD: 98
REG: 91
BEC: 86
FAR: 83

DONE DONE DONE and DONE all on the first try! It IS possible, just keep on studying!

[Anonymous]

thank you! im currently studying for AUD and this has been really helpful

[LTTX]

Thank you very much for posting this! I'm planning on taking AUD in August. This will be very helpful!

FAR - 79 - 5/16/16
AUD - Aug 16
BEC - Nov 16
REG - Feb 17

[GiniC]

ADDING ANOTHER MNEMONIC – I've been struggling to remember all the reasons an Other Matter paragraph is needed and when it may be used. Becker lists nine “required” situations, but I felt two were redundant so I have only eight:

Other matter required: OM PUCCRS (trying to remember all these PUCCR my face!)

O – Opinion changed (this can be Emphasis of Matter or Other Matter, but one or the other is required)
M – Material inconsistency with materials accompanying the Financial Statements
P – Predecessor auditor's report is not reissued
U – Use restricted (i.e. for special purpose frameworks needing comprehension)
C – Compliance statement included in auditor's report
C – Comparative financial statements shown when priors are not fully audited (compiled & reviewed, or no prior attention)
R – Refer to required supplementary information
S – Supplementary information accompanying Financial Statements is reported in the audit report, rather than separately.

Other Matter may be necessary – only a FEW cases:

F – Frameworks are different for different sets of Financial Statements included in engagement
E – Explanation clarifying auditor's responsibilities (re laws, regs, GAAS)
W – Withdrawal from engagement is prohibited despite inability to obtain sufficient appropriate audit evidence and effect on
…..Financial Statements may be material and pervasive (explaining reasons why)

[Wannafree]

Thanks a lot Sar_rah .Ultimate

[mperez102204]

Thank you soooo much for this !!!

[ahsq]

dont forget compliation:

C complied
A (not) audit
R
M
R
A
R
S
O
M

[Author]

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