[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Mary 2496]

Question:

Sam's Retail Outlet's certified public accountant prepares financial statements that omit a material fact. The financial statements are part of Sam's registration statement. An investor purchases Sam's stock. Under Section 11 of the Securities Act of 1933, the accountant can avoid liability by showing that she:

a. Lacked criminal intent in preparing the financial statements.

b. Exercised due diligence in preparing the financial statements.

c. Was not in privity of contract with the Investor.

d. None of the answer choices are correct.

Answer – Choice “b” is correct. A CPA's best defense to a 1933 Section 11 action is that the CPA exercised due diligence by performing the audit in accordance with generally accepted auditing standards.

* Confused or just way overtired, perhaps. Why is a CPA — preparing — the financial statements for a registration statement of what will be a publicly traded company?? Am I just too overtired and reading this wrong or missing something? How could this scenario even be possible in regards to independence?

[Garion]

@Evwy_Mom… Happier than I and an 80 on a Becker review test is pretty solid from what I have seen… Scored a 64% yesterday and dumped my plans to take on Friday. In the high 80's on all of the home work and then that result… I expected better and not really a confidence builder. I scored in the mid 75's for both FAR and BEC before going into the exams. Not sure what to make of it all now.

FAR 84 (7/24/14)
BEC 87 (8/28/14)
REG 84 (10/14/14)
AUD 86 (11/24/14)
Ethics 98 (1/19/15)
Licensed CPA: March 13, 2015

[Amay]

@King sounds to me like you were pretty well prepared! I am positive you knocked that one out of the ballpark!

Has everyone here scheduled their test yet? I never wait until right before but I think I am scared of failing my “last one” again :/

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Mary 2496]

I can't wait … the only Prometric in my area fills up really, really fast. They're actually booked solid now until the end of the testing window. Here, you have to schedule and then do your best to be ready by that date. It's crazy! If you need to reschedule, good luck around here!

[Amay]

@Mary that sucks! In my area it really depends on how lucky I get. Sometimes when I have rescheduled I have gotten the exact date I want and other times there is just nothing, so I am definitely taking a risk by waiting. I haven't even applied for my NTS, but I get those in 24-48 hours.

BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀

*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂

[Mary 2496]

I usually get my NTS's really quick too. Yeah, the Prometric here is always packed.

[Evwy_Mom]

@Garion – this wasn't a Becker pre-test, it was a Roger CPA Review test, so I'm not sure how that compares. The only other section I've taken a pre-test on was AUD (my best section so far) but that was when Roger was using the Wiley software; now he uses his own.

I'm finding the multiple choice on the Roger software to be pretty good, while the SIMS leave something to be desired. I've been using both to prep for this section as I still have access to both.

AUD = 85
FAR = 79
BEC = 79
REG = 65, 72, 75!

I AM DONE!!

[Evwy_Mom]

I'm scheduled for Thursday. I could reschedule, but to be honest, I don't know if I'll be any more prepared later in the month than I am right now. I'm almost to the point of hitting a wall with studying; I've been working on passing the CPA exam for 18 months and I'm just tired.

In good news, however, I FINALLY understand corporate distribution in regards to CEP and AEP. After talking back and forth last night with @rzrbkfaith and doing some additional reading, it just clicked this evening. Now, I just need to pray for a SIM on this!

AUD = 85
FAR = 79
BEC = 79
REG = 65, 72, 75!

I AM DONE!!

[Anonymous]

I'm getting confused on partner basis in a partnership.

Why do withdrawals/distributions decrease a partner's basis, but a guaranteed payment does not?

Here's an answer to one of the questions:

The guaranteed payment increases Peters' ordinary income by $16,000 but does not affect Peters' tax basis because guaranteed payments are not undistributed earnings (they are distributed to the partner) —-Aren't cash distributions, also distributions to a partner, but that affects the partner's basis?

[Evwy_Mom]

@cpastudent22 – It doesn't reduce basis because it's a deductible expense to the partnership – think of it like any other expense to run a business, if the partner didn't do it they would have to pay someone else to do it, it's a salary expense to the partnership. So, to the partner, it is income to be reported on form W-2; the partnership distribution would be on his/her K-1.

Does that help?

AUD = 85
FAR = 79
BEC = 79
REG = 65, 72, 75!

I AM DONE!!

[Mary 2496]

The countdown to Monday begins. Trying to sneak in some MCQ while at work.

[FabCPA]

I keep postponing taking the test because I am so scared I will fail. For some reason I cannot get past R3 because I feel like I am not understanding the material and that just terrifies me. Not sure if I should just take the test on Nov 28th or just schedule it for the next testing window. Any suggestions?

[Mary 2496]

I'd keep moving through it. There may be information in R4 that helps you understand R3. That's how it worked for me, anyway. Keep going – then go back and review what you don't understand, after you've gone through each chapter (at the end). You have plenty of time to prepare, IMO. I'd keep your test date.

[FabCPA]

Thank you, Mary!

[Anonymous]

you will never be 100% ready no matter how long you study! get through your study material and review what you don't understand and take your exam! Goodluck

[Author]

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