[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/

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

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

[Anonymous]

Yeah, the controller does the bank reconciliation I believe. The Ninja MCQ has some good simulations on that.

[mariam almas]

ummmmmm i think it depends on the company size and type because when i was working as a Revenue Specialist i was the one who prepare the bank reconciliation, will keep ur post as a note for me, thnx

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[mariam almas]

Which of the following procedures would an auditor most likely perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?

a.

Inspect the shipping records documenting the merchandise sold to the debtors.

b.

Increase the assessed level of detection risk for the existence assertion.

c.

Review the cash receipts journal for the month prior to the year-end.

d.

Intensify the study of the internal control structure concerning the revenue cycle.

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[Qlad]

@Mariam…is the answer A..bcoz shipping doc is outside the co.?

Transaction authorization within an organization may be either specific or general. An example of specific transaction authorization is the

A. Approval of a detailed construction budget for a warehouse.

B. Establishment of requirements to be met in determining a customer’s credit limits.

C. Setting of automatic reorder points for material or merchandise.

D. Establishment of sales prices for products to be sold to any customer.

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[mariam almas]

yeah correct the answer is A

for ur question …….. i have no idea ummm may be A ?? (just guessing )

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[Qlad]

yup…answer is A bcoz approval of budget for construction would be one transaction specific to that warehouse only…all others are general.

I can't understand this next question…and how to solve it

The control environment may decrease the effectiveness of control activities when

A. Management has substantial incentives for meeting earnings projections.

B. The internal auditor reports directly to the audit committee.

C. The audit committee actively oversees the financial reporting process.

D. The board of directors is independent of management.

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[mariam almas]

yeeeeeees my guessing was correct hope in exam as well (lol)

regarding ur second question …. is it A ??

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[plotikkk85]

Hi All! Hate Sampling….here is my question:

As a result of sampling procedures applied as tests of controls, an auditor incorrectly assesses control risk lower than appropriate. The most likely explanation for this situation is that:

a. The deviation rate in the auditor's sample exceeds the tolerable rate, but the deviation rate in the population is less than the tolerable rate.

b. The deviation rates of both the auditor's sample and the population exceed the tolerable rate.

c. The deviation rates of both the auditor's sample and the population is less than the tolerable rate.

d. The deviation rate in the auditor's sample is less than the tolerable rate, but the deviation rate in the population exceeds the tolerable rate.

and why??

[mariam almas]

@plotikkk85 is it D ??

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[Qlad]

@Mariam…yes A is the answer for my question…can u pls explain why it's A…how the other answers are not correct?

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[mariam almas]

@Qlad actually i don't know the perfect explanation, but all choices seems positive, except A (Management has substantial incentives for meeting earnings projections) that why i chose A .

although we need more professional explanation (lol)

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[Anonymous]

@plotikkk85 D? Otherwise known as underreliance. Let's use numbers to understand it.Let's say the auditor said I'm willing to accept a deviation (exception/error) of 50 for every 100, so (s)he tested the sample population of 100 and the test resulted to only 25 deviations. So the auditor will now assess the control risk as low because because it seems like the control is working effectively (25 out of 100 vs 50 over 100). However, if (s)he should have tested 100% population say 1000, the actual deviation was 600 (60 over 100). So the control assessment was lower than appropriate because 50 is the sample deviation and 600 is the actual population deviation. I hope it makes sense and not confuse you more.

[Anonymous]

I'll try. On the internal control, all other choices are effective internal control except A. If there's a pressure on management to meet revenue chances are they will record fictitious sales just to meet the target earnings.

[Future Ninja]

did you know that:

when a cpa's compilation, review or audit report on historical fs is included in a submitted document containing prospective fs, the cpa should either examine compile or apply aup to the prospective fs and report unless:

1. the prospective fs is labeled as budget

2. the budget does not extend the end of the current fiscal year

3. the budget is presented with interim historical fs for the current year

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

did you know that:

the CEA (CIA) was brought to the ER for medical examination.

financial forecast and projection = compilation, examination and aup (CEA) sounds like CIA

reporting on pro forma financial information = examination and review (ER) like emergency room ^_^

forecast = general and limited ( fore***y with the general)

projection = limited only

I dont know why i thought about this but its effective for me. hope its helpful to the rest.

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Author]

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