[barelystayingsane]

They’re saying c. is correct, because the “schedules of details are developed solely within the entity.” How are we supposed to know that the schedule of details was provided by the client when we read the question? Yes, the client always conducts the physical inventory counts, but doesn’t the auditor stand there and observe the inventory count? I assumed the schedule of details was something prepared by the auditor after observing the count. Thanks!

Which of the following is the least persuasive documentation in support of an auditor’s opinion?

a. Notation of appraisers’ conclusions documented in the auditor’s working papers

b. Notation of inferences drawn from ratios and trends.

c. Schedules of details of physical inventory counts conducted by the client

d. Lists of negative confirmation requests for which no response was received by the auditor.

[mena je twa]

Its a slipper slope kind of a question. remember you have to pick the best answer in audit and not the correct.

The reasoning over here is that anything prepared or made by a client is a sin. As auditors we put our trust on external confirms, may be appraisers even and anything that the auditors creat, but we do not trust anything that the client creates and gives it to us, even though when observing inventory, the auditr os there to check both ways, sheet to floor and floor to sheet, but still that sheet is made up by client and no way Jose you can trust the client.

FRight of the back, a & D are wrong, cause it talks about external stuff, comes down to c & B and i would pick C, any given day.

Hope this helps

Licensed CPA, Texas - 2012

[mena je twa]

Its a slipper slope kind of a question. remember you have to pick the best answer in audit and not the correct.

The reasoning over here is that anything prepared or made by a client is a sin. As auditors we put our trust on external confirms, may be appraisers even and anything that the auditors creat, but we do not trust anything that the client creates and gives it to us, even though when observing inventory, the auditr os there to check both ways, sheet to floor and floor to sheet, but still that sheet is made up by client and no way Jose you can trust the client.

FRight of the back, a & D are wrong, cause it talks about external stuff, comes down to c & B and i would pick C, any given day.

Hope this helps

Licensed CPA, Texas - 2012

[Iron_Victory]

It is a poorly worded question it seems, and I get what your thought process is. I'm sure you know this as your scores show.

The least persuasive evidence is generated internally to the client.

a. an appraiser developed conclusions – this seems to be slightly persuasive due to its eternal generation

b. notation of inferences – this seems to be done by the external engagement team/auditor so if we can't convince ourselves then what good are we?

c. Schedules of details about inventory counts CONDUCTED by the client – this answer is the least clear about observation and possibly the least persuasive by default i.e. internal reports the client keeps about counts, obsolescence, damages etc.

d. Lists of negative confirms with no response – Negative confirms are external to the client are used when risk is low, balances are small or we don't think the client's customers will give it thought/and or respond

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[Iron_Victory]

It is a poorly worded question it seems, and I get what your thought process is. I'm sure you know this as your scores show.

The least persuasive evidence is generated internally to the client.

a. an appraiser developed conclusions – this seems to be slightly persuasive due to its eternal generation

b. notation of inferences – this seems to be done by the external engagement team/auditor so if we can't convince ourselves then what good are we?

c. Schedules of details about inventory counts CONDUCTED by the client – this answer is the least clear about observation and possibly the least persuasive by default i.e. internal reports the client keeps about counts, obsolescence, damages etc.

d. Lists of negative confirms with no response – Negative confirms are external to the client are used when risk is low, balances are small or we don't think the client's customers will give it thought/and or respond

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[barelystayingsane]

Thanks for the responses! Yeah, I chose b. because ratios and trends are based on internal evidence, while I assumed the schedule of details was performed by the auditor and would be based on observation. So the schedule of details of the inventory count is always done by the client, not by the auditor? I guess that is a good fact nugget to memorize!

[barelystayingsane]

Thanks for the responses! Yeah, I chose b. because ratios and trends are based on internal evidence, while I assumed the schedule of details was performed by the auditor and would be based on observation. So the schedule of details of the inventory count is always done by the client, not by the auditor? I guess that is a good fact nugget to memorize!

[mena je twa]

Guys, Its a genuine question.

Take a look at the answer choices, 2 of them striaght away tells you its external sources. So you have narrowed it down to 2. The moment you see anything prepared by client, that has to be it.

Licensed CPA, Texas - 2012

[mena je twa]

Guys, Its a genuine question.

Take a look at the answer choices, 2 of them striaght away tells you its external sources. So you have narrowed it down to 2. The moment you see anything prepared by client, that has to be it.

Licensed CPA, Texas - 2012

[mena je twa]

Invt count what we do here and when i go to do invt, i take my own sheet, and randome sample 10 items from floor to sheet and vice-versa.

I dont sit and audit 20+ paes of clients inventory whether they have done it right. So i will place least amount of assurance on a client prepared things.

Licensed CPA, Texas - 2012

[mena je twa]

Invt count what we do here and when i go to do invt, i take my own sheet, and randome sample 10 items from floor to sheet and vice-versa.

I dont sit and audit 20+ paes of clients inventory whether they have done it right. So i will place least amount of assurance on a client prepared things.

Licensed CPA, Texas - 2012

[barelystayingsane]

I think my confusion came from the fact that I interpreted b. as saying that the physical inventory count was conducted by the client (which, of course, it was), not that the schedule of details was also conducted by the client. If you didn't have auditing experience, I don't know if you'd necessarily know that the schedule was prepared by the client, but now I know for the exam! Thanks!!!

[barelystayingsane]

I think my confusion came from the fact that I interpreted b. as saying that the physical inventory count was conducted by the client (which, of course, it was), not that the schedule of details was also conducted by the client. If you didn't have auditing experience, I don't know if you'd necessarily know that the schedule was prepared by the client, but now I know for the exam! Thanks!!!

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