[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for AUD.

World Premier: “Unmodified” (Audit Reports Rap Video) 🙂

Posted by Another71 on Thursday, November 13, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

AUD - 79
BEC - 80
FAR - 76
REG - 92

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

[WANNABE_CPA]

Requirements of GAGAS for auditors and audit firms include all of the following except:

A.

80 hours of CPE in governmental auditing every two years for those auditors who spend at least 20% of their time on these audits.

B.

a system of quality control that includes independence, legal, and ethical requirements.

C.

an external peer review every other year.

D.

human resources policies and procedures.

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[ladybossxo]

@Wannabe: C? I think the external peer review is once every 3 years. But then again, I don't even know about A.

CPA Exams Done.

[Anonymous]

@WANNABE_CPA, at first I was thinking the answer was A because I don't remember reading anything about CPE requirements in my Becker text, but I believe the answer is C. External peer reviews are required at least once every 3 years, not every other year.

[WANNABE_CPA]

C is correct !!

Explanation:

The Government Accountability Office (GAO) requires auditors who spend 20% or more of their time performing government audits to have 80 hours of CPE every two years directly related to government auditing (also called “Yellow Book” hours). Adding, on top of that requirement, state requirements for tax and ethics hours, government auditors have a heavy education requirement.

A firm that performs government audits must have a system of quality control in place to assure compliance with professional standards and legal and ethical requirements. The quality control system should address, among other areas, human resources policies and procedures.

An external peer review is required at least once every three years.

@DPD , same with me, i chose A, because i felt that was a new point, never read in the book.

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[trish_1234]

On receiving a client's bank cutoff statement, an auditor most likely would trace:

A.

prior-year checks listed in the cutoff statement to the year-end outstanding checklist.

B.

deposits in transit listed in the cutoff statement to the year-end bank reconciliation.

C.

checks dated after year-end listed in the cutoff statement to the year-end outstanding checklist.

D.

deposits recorded in the cash receipts journal after year-end to the cutoff statement.

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[Anonymous]

@WANNABE_CPA The section on GAGAS seems to have a lot of minute details like that – did your first AUD exam throw questions like that at you? I definitely did not study the governmental rules in detail, just high level.

[Anonymous]

Whats the difference between Accounts receivable, Billing, and Accounting?

[Anonymous]

Billing/AR is one department. Accounting is another. Both serve the recordkeeping function.

The Billing department receives an approves Sales Order from the Credit department. A three-way match is performed between the Sales Order, the Shipping Document, and the Invoice. The invoice is then prepared and sent to the customer and the AR master file is updated. Billing sends the AR Update to the Accounting department so that the General ledger gets hit for the change. These two accounts (AR Master and GL are periodically reconciled by an independent party, usually the treasurer).

The Accounting Department receives summaries of updates to accounts and posts these to the general ledger.

[Anonymous]

It seems that AR/ Billing is handling individual transactions Then Accounting records in aggregate into the GL.

Question:

If AR is record keeping function, why are they approving sales orders? Shouldn't ARC be Separated?

Also, What does it mean to approve sales order from credit Department?

[Martin]

In determining the effectiveness of an entity's policies and procedures relating to the existence assertion for payroll transactions, an auditor most likely would inquire about and:

A.

observe the segregation of duties concerning personnel responsibilities and payroll disbursement.

B.

inspect evidence of accounting for prenumbered payroll checks.

C.

recompute the payroll deductions for employee fringe benefits.

D.

verify the preparation of the monthly payroll account bank reconciliation.

Through God all things can happen!

“You never fail until you stop trying.”
― Albert Einstein
When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
“Just keep swimming, just keep swimming.”

FAR= 72-84
Audit= 73-82
BEC= 74-75
Reg=77

[Anonymous]

Yes, ARC should be separated. “Approval” of the sale means the credit department determines whether or not the customer may receive goods, due to their creditworthiness. Accounts Receivable does not approve the Sales Order. The Sales Order gets approved by the Credit Department upon receipt from the Sales Department. Accounts Receivable “approves” the invoice in the sense that they match the terms of the new invoice with the shipping document and sales order as a control.

[Anonymous]

Martin – A?

[its_an_accrual_world]

Why is Answer A incorrect?

In auditing accounts receivable, the negative form of confirmation request most likely would be used when:

Incorrect A.

the total recorded amount of accounts receivable is immaterial to the financial statements taken as a whole.

B.

response rates to properly designed positive confirmation requests were inadequate in prior years.

C.

recipients are likely to return positive confirmation requests without verifying the accuracy of the information.

D.

the combined assessed level of inherent risk and control risk relative to accounts receivable is low.

01/15 Audit (73)
03/15 Audit (72)
08/15 Financial (46)

[Anonymous]

I think answer A is correct because since we are testing the “existence” assertion within payroll. “Existence” would mean that all recorded payroll expenses actually match to work performed by a valid employee. Therefore, it is necessary to separate the personnel/HR duties from the payroll disbursement duties. The personnel/HR person creates employees and enters them into the system. The payroll disbursement department disburses paychecks. If one person did both of these jobs, that person could create an employee in the system and also cut that person a payroll check. In the context of ARC, Personnel/HR is the “Authorization” function, Department Supervisors who approve hours worked are the “Record-keeping function,” and the Payroll Department is the “Custody” function.

^That was probably a confusing explanation, but really I just knew the other answers were incorrect, so I reasoned why A could be correct.

Also, is it D, combined RMM relative to Accounts Receivable is low?

[its_an_accrual_world]

^ Yes DPD516 the answer was D.

01/15 Audit (73)
03/15 Audit (72)
08/15 Financial (46)

[Author]

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