[Anonymous]

Becker Question –

Another question that is creating lot of confusion between existence and completeness – When the auditor has to check for unrecorded liabilites, he looks at the cash disbursements made subsequent to year end and goes back to the purchase orders, receiving reports and invoices. Isn’t this tracing (thereby checking for existence) rather than completeness?

[Anonymous]

When studying for the AUD, I thought about where the question started – if the question started with what is recorded in the books – then I knew that the question was asking for proof that the transaction took place- existence. (Does any evidence exist that proves that you are not lying?) If the question started with source documents – then I knew that the questions wanted to know if the transactions were recorded in the books – completeness. (Did you record everything?) The auditor assumes that liabilities will be understated(The client may want to show less debt). The audtior assumes that revenue will be overstated. (The client wants to look profitable).

Checking cash disbursements made after the close of the year checks for completeness and cutoff- did you recored the expenses in the right period?

Audit Risk is the risk that an auditor may issue unqualified report due to auditors failure to detect material misstatement either due to error or fraud. Audit Risk and Materiality is the theme for the auditing exam. Think about this and GAAS when you study.

Much success to you!

[Anonymous]

Vouching tests for existence – usually used by auditors to make sure that revenue is not overstated-start with what is recorded in the books and look for source documents that may or may not exist

Tracing tests for completeness-usually used by auditors to make sure that liabilities are not understated-start with source documents and look for proof that it was recorded in the books

[jamesb]

@beechcrest…your previours tow post are awesome on A4..if you have your mini-notes for A-4. I would to love to see those, because A-4 is HARDEST and confusing for me. I am more concern with transaction cycles topic

AUD: TBA-
FAR Done
BEC Done

Becker
NINJA for AUD

[Anonymous]

Thanks so much for the great help! That cleared most of my doubts! 🙂

[Anonymous]

I am glad to help! Yeah!

[Anonymous]

Quick question :

Who sends the Accounts Receivables confirmations to the customers? The auditor himself or the client sends it?

Also, the bank confirmation is sent by the client to the bank, right?

[rjcpa]

The client prepares the confirms but the auditor mails them.

FAR - 10/3/12 - 86
BEC - 11/27/12 - 70 1/14/13 - 81
AUD - 4/4/13 - 87
REG - 7/8/13 - 80

[Anonymous]

Thanks! 🙂

[Author]

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