AUD Study Group Q1 2015 - Page 33

Viewing 15 replies - 481 through 495 (of 1,162 total)
1 2 3 … 32 33 34 … 76 77 78
  • Author
    Replies
  • January 9, 2015 at 1:14 am #650269
    Anonymous
    Inactive

    I don't think kiting is about stealing money, it's just for overstating cash account. I think also need transfer schedule for detecting

    January 9, 2015 at 1:39 am #650270
    howmany74s
    Member

    I agree with anjanja, though I only managed to agree after reading becker. A little scary given my test is tomorrow. Ha!

    January 9, 2015 at 1:51 am #650271
    salring
    Participant

    Anjanja isn't the intent of kiting to mislead as to what the true account balance is? And if so isn't that considered theft?

    January 9, 2015 at 1:56 am #650272
    Anonymous
    Inactive

    salring,

    I don't think so. This is from wikipedia: theft is the taking of another person's property without that person's permission or consent with the intent to deprive the rightful owner of it.

    If I told you my account balance was $10000 while it's about $400, does it make me a thief?

    January 9, 2015 at 2:00 am #650273
    s2sylvir
    Member

    My understanding is that the reason there is kiting is to cover up money theft.

    Kiting itself is not theft, but it's used to cover theft? @_@

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 9, 2015 at 2:09 am #650274
    Anonymous
    Inactive

    I really don't see how it could work. Could you describe the entire process? The whole point of it is to overstate YE cash balance

    Lapping is different, it's stealing

    January 9, 2015 at 2:12 am #650275
    howmany74s
    Member

    I thought the main focus here is ‘fraud' not whether there is theft or not. Fraud is related to misappropriation of assets, and kiting is related to presenting a fraudulent record to a 3rd party by not recording a withdrawal.

    January 9, 2015 at 2:20 am #650276
    Anonymous
    Inactive

    It's not that they don't record a withdrawal, they do, they just record it as of January 1st instead of December 31

    Yeah, it is fraud

    January 9, 2015 at 3:00 am #650277
    salring
    Participant

    I agree with the notion of fraud for kiting.

    January 9, 2015 at 3:50 am #650278
    Anonymous
    Inactive

    I am not sure about this question

    A lawyer's response to an auditor's inquiry concerning litigation, claims, and assessments may be limited to matters that are considered individually or collectively material to the client's financial statements. Which parties should reach an understanding on the limits of materiality for this purpose?

    A.

    The auditor and the client's management

    B.

    The client's audit committee and the lawyer

    C.

    The client's management and the lawyer

    Correct D.

    The lawyer and the auditor

    Explanation: Legal counsel's response may be limited to matters that are considered individually or collectively material to the financial statements, provided the entity and auditor have reached an understanding on the meaning and limits of materiality for purposes of this letter and management has communicated such understanding to the legal counsel.

    AU-C 501.A56

    Shouldn't the right answer be A?

    January 9, 2015 at 4:06 am #650279
    Mystro
    Participant

    Hi anjanja,

    The case is with lawyer, which has more experience in legal issues than management.

    So answer “The lawyer and the auditor” is correct.

    January 9, 2015 at 4:14 am #650280
    Anonymous
    Inactive

    But how can lawyer determine materiality though

    and it also says “provided the ENTITY and auditor have reached an understanding on the meaning and limits of materiality”. Who's the entity in this sentence?

    January 9, 2015 at 5:56 am #650281
    Mystro
    Participant

    Hi anjanja,

    Please be more careful with audit wording !!!

    In the question says ” parties ” which means could be Auditor , Management or lawyer.

    Even if the question said ” entity” instead of “parties” it also could be including the lawyer,

    When the lawyer is outsourced.

    January 9, 2015 at 1:19 pm #650282
    salring
    Participant

    I would have gone with A too because I don't think a lawyer is in a position to decide what is material in relation to a client's financial statements. A lawyer may be knowledgeable about a specific litigation and settlement terms but I don't think they should be determining financial statement materiality.

    January 9, 2015 at 1:55 pm #650283
    jstay
    Participant

    I probably would have went with D because I dont think management and audit committee should assess materiality limits, it just wouldnt seem right, sort of bias

  • Author
    Replies
Viewing 15 replies - 481 through 495 (of 1,162 total)
1 2 3 … 32 33 34 … 76 77 78
  • You must be logged in to reply to this topic.