[Anonymous]

Does anyone know of a good breakdown/or how to look at these so they make some sense. I can’t seem to get my head wrapped around these. Anyone know of a good chart maybe? Becker is not helping me much on this area.

1. Examine documents for evidence of a credit check (valuation)

2. Re-perform procedures for a sample period (completeness)

3. Observe evidence of independent checks (existence)

So for example my issue is #1 doesn’t look any different to me than #3. How do you look at these and be able to categorize them correctly?

Thanks!

[MCLKT]

Here is how Plaster3 explained it in my AUD Jan/Feb study group:

https://www.another71.com/cpa-exam-forum/topic/aud-study-group-janfeb-2013/page/8?view=all#post-240117

Do you have WTB too? I know it has a really great SIM on this. Working a sim matching them up is what helped me keep them straight. I'm at a coffee shop, now…. but when I get home I'll get my AUD notes out b/c I think I put together my own way of keeping them straight.

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

[Anonymous]

Thank you! I'm finding this part really confusing. I do have WTB but trying to get through all chapters before I start mcqs or SIMS. Hopefully some of my AUD confusion will start to clear up once I get to them. Hit chapter 5 today. I can't wait to be done.

[MCLKT]

Hey not a problem! I really struggled with getting the assertions portion to “click” in my brain. I don't know why. A big part was because I have zero audit experience and the vocab was all new to me. I kept confusing assertion with assurance, lol.

I'm just going to explain my whole understanding, even though it's more info than what you probably need.

To keep it straight I wrote it out from a big picture point of view.

Management assertions are “truths” the managers are stating/implying with regard to the financial statements.

An auditor uses these assertions to plan and select substantive tests.

The tests apply to 3 types of assertions.

1. Account Balances

2. Transactions

3. Disclosures

Each type of assertion has types of tests that can be performed. (You will want to know them for each type. NINJA notes has a great breakdown of this).

I memorized key words that described the action, and associated them with tests.

For example in your #3 “Observe” was a key word for the test of Existence.

I'll list some others I had put together:

TEST=Keywords



PRESENTATION/DISCLOSURE = Inquire, Inspect

EXIST = Vouch, Observe, Confirm

RIGHTS/OBLIGATION = Inspect, Inquire, Confirm

COMPLETENESS = Cutoff, Analytical, Trace

VALUE = Reconcile, Recalculate, Analytical

OCCURANCE = Confirm, Vouch

CLASSIFICATION = Inspect

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

[WACCadoodle]

CPA_driven

In your example, the difference is:

You Inspect a document or an item

You Observe a process

Hopefully this helps some

FAR 79
REG 81
BEC 75
AUD 76

[Author]

Replies