[CPA_TO_BE]

Hi Future CPA,

Hope you all are doing great!

I thought if feasible, we can post questions regarding specific topics in Audit, under one link. I think this will help us to share our knowledge and queries in a better way!

Question: 1

Will really appreciate the help here!

In Becker 2014

I see under “Further Audit procedure” —> Test of Details and Subsequent Analytical Procedure

but later in A4 I see another heading “Analytical procedure”.. is there a difference btw “Subsequent Analytical Procedure” and just “Analytical procedure”… sorry it may be a dumb question!

Thanks for the help!

REG: 86

AUD: Studying

[mhueycpa]

Only thing I can think of is performing Analytical Procedures as part of your Subsequent Events review, thats your “Subsequent Analytical procedure” vs. performing Analytical procedures at the beginning of the audit. However, Analytical procedures are what they are, the wording just refers to when they are performed and the various types that may be performed.

THE 300 CLUB WILL DO JUST FINE!

[CPA_TO_BE]

hmm.. thank u so much mhueycpa

but i m still confused 🙁

[Sarah1421]

I have the 2014 Becker Auditing materials as well – I feel your pain, I'm studying it now too.

Can you give me a page number? I think you are looking at A4-6 to A4-7 (specifically), and if so, it's “substantive” as opposed to “subsequent” (which is what you typed above in your question). If you truly meant subsequent, the rest of my explanation is garbage. 🙂

In my understanding, substantive analytical procedures don't fundamentally different from “regular” analytical procedures (like mhueycpa said, analytical procedures “are what they are”). However, the difference is when they are applied – and for what reason. If they are applied to detect material misstatement at the assertion level, they are substantive analytical procedures…

Take a look at the table on A4-7 – it summarizes the use of analytical procedures. You'll see they're required in the planning and final review stage (in which case, they're “regular” analytical procedures). They are also optional in the substantive procedure phase… and then they're called substantive analytical procedures.

Hope that helps!

FAR - 90
AUD - 91
BEC - 86
REG - 87

[CPA_TO_BE]

Yeah i m so sorry for the typo… i totally get it now. Yes I was referring to the same pages A4-6, A4-7 and A4-8… Thank u so much Sarah1421 for the detail explanation. Its just I feel like sometimes becker doesn't explain things properly 🙁

Also, is there a way to memorize A4-18?

Thanks a lot for your help!

REG: 86

AUD: Studying

[Sarah1421]

Sometimes the auditing minutiae throw me off so bad I loose track of the “big picture.” lol Glad I could help.

I don't know how you'd memorize that table (other than just drilling it to death with note cards or something). But I don't know if it's the best use of time… might be best to just REALLY consider why each procedure would relate to the assertion (and vise versa). Becker really dives into it with the Transaction Cycle section.

My gut with the transactions cycles/assertions/audit procedures is just to do MC questions until my eyes cross. Although its a little scary (I really like my memorization tools!), I feel like we'll just pick up on the concepts. But in all honesty, it doesn't give me a lot of confidence going into the exam.

Where are you at in your studying? I'm going through the material for a second time (now back in A3). It's been surprising to me how the little pieces are fitting together in this second go-around. If you have time to do it, I highly recommend it.

FAR - 90
AUD - 91
BEC - 86
REG - 87

[CPA_TO_BE]

Thanks dear!

I am doing my first time review and I am on A4 and then I am only left with A6.

At this moment, honestly I am all lost. There are so many little little topics/ terms that I m all confused abt.. but for now I am just going through the chapters and making detail notes… and once I am done with it.. I will start my second review..

I am hoping it will make more sense then… but my only worry is how will I remember all tht info given the fact that I have no audit experience… infact I hardly know anything abt it 🙁

so i m very nervous abt this exam as what ever I read is foreign to me…

Hardest part in the book is that there are so many same topics mentioned in different areas.. not sure if u are feeling the same way..

Best of luck with ur exam 🙂

REG: 86

AUD: Studying

[Sarah1421]

I totally agree that the topics keep popping up in different areas. You think you've covered it and then BAM – you're reading about internal control again. 🙂 I think that's why it fits together so much better on the second go-around. Trust me… you'll feel much better in round 2.

This exam freaks me out a bit because I seem to be answering most questions conceptually (“well, I guess that one makes the most sense”) as opposed to memorizing concepts like I did in FAR. Even though I'm doing well in the Becker tests, I feel like the actual exam could throw me a serious curveball – like change ONE word – and I'd be completely wrong.

I don't have any real accounting experience and NO auditing experience… just one auditing class a couple years ago. My degree isn't even accounting (Business!). I certainly don't trust my “knowledge” (or lack-there-of) of auditing.

Good luck studying!!! You did really well in Reg – just think, now you don't have the additional jitters of a first time tester. I think that experience is helping me.

FAR - 90
AUD - 91
BEC - 86
REG - 87

[CPA_TO_BE]

thanks u so much for motivating me!

I am totally impressed that inspite of having any NO accounting degree you scored 90! in FAR. Very impressive dear…. then I am very sure that u will do great in AUD….

Sadly I am not even scoring as good as I should be in MCQs… some 60+ some 70+ and very few 80+ … with REG I was scoring 80+ on an average and even 90+ sometimes… but this AUDIT is killing me… but lets see.. hopefully it will make all sense i guess 🙂

I totally agree that at least we have given one exam, but you know after giving REG i realize that I need to really understand the basics to do really well on any CPA exam…I studied like crazy in REG and when i was taking the real time exam I felt tht even thou i studied my book so well…. my basics that i learned (on job: worked as a tax accountant) helped me a lot … n since i hv no experience in AUDIT…. i feel so helpless….. so the only help I m getting is from googling a lot of terms to get a grip.. but its not helping 🙁

so lets see .. I am sure at the end of the day everything will be great with the grace of GOD 🙂

Yah Future CPA!

REG: 86

AUD: Studying

[CPA_TO_BE]

Alright so I am starting chapter “Audit Procedure by transaction Cycle” A4-19

read few initial pages..

1) what is the objective of this chapter, in other words, what exactly are we aiming here with all the various Cycles…

2) For eg on A4-20: are we understanding the clients “Sales” procedures, like how they prepare Sales order n all that? or I am getting it wrong!

3) Also why its says “Internal Control – Sales” as the top heading? are we testing controls here?

a ) I was going through the becker outline and it says that one of the objective here is to ” see if controls are working effectively? Per my understanding in regular audit you are not required to “test the controls” to check its effectiveness unless u rely on them… so I am a little lost here…. are we assuming in this chapter that its a public company and we are testing the controls?

Thanks for the help!

[CPA_TO_BE]

Please ignore my previous question, I think I got it!

[Anonymous]

Can anyone explain in brief ” Subsequent Event Review” ? I get confused with F/S date, Report date and Issue date!

Appreciate the help!

Thanks

[Sarah1421]

Here's the big picture (skip it if it's too general) – As an auditor, you are responsible to provide reasonable assurance that the financial statements are free from material misstatement. Some subsequent events require recognition or disclosure in the financial statements… which management is responsible for. If management fails to include the events, the financials will be misleading. In order to know if these events occurred, you (the auditor) must perform procedures – subsequent events review.

If the financials are dated December 31 and you finish your audit report on February 10th, you have an ACTIVE RESPONSIBILITY to investigate certain subsequent events until February 10th.

If you don't issue your report until February 15, you are NOT RESPONSIBLE to make any inquires or perform further procedures from the date of the report (February 10th). But – you still have options to include subsequent events if you “become aware.” That's when you can either dual date or change your report date.

Hope this helps!

FAR - 90
AUD - 91
BEC - 86
REG - 87

[Anonymous]

ThQ Sarah… just minor clarification here

what is the difference between the Audit Report date (in your eg. lets say fb 10) and Report issue date (feb 15th, and I believe that is done by the client and not by the auditor right?)

Also you said “But – you still have options to include subsequent events if you “become aware.”” .. become aware when? after feb 10th or after feb 15? and if after feb 15.. you then means that “” That's when you can either dual date or change your report date””

ThQ once again

[Sarah1421]

Audit report date is the date that's written on the report – for example, when you write a business letter and you date the top… not necessarily when you put it in the mail or when the other entity receives it (might be a stretch as an example, but it's how I think of it). The issue date is when it's available for others to see. Maybe you can think of it like posting it online? As an auditor, you want to clearly mark that report date so that you're not taking on more responsibility than you should. It's safe to say – “Hey, I stopped really looking at this company at the REPORT DATE. You just didn't see my report until the ISSUE DATE.”

But, if something crazy comes to the auditor's attention (they become “aware” of a subsequent event), they have the option to mention it in their report when it's between February 10th and February 15th. This is the only time they can dual date or change their report date. Basically, once it's issued, it's out there… As for who actually issues the report (on Feb. 15th in the example), I'm fairly certain that the auditor does it…

This link could help, but it might go into more detail than we need: https://pcaobus.org/standards/auditing/pages/au530.aspx

If something crazy comes to the auditor's attention after the 15th, there are different rules to consider… once again, it's like the report is posted online already. You need to take different steps to make sure the user's are aware…

FAR - 90
AUD - 91
BEC - 86
REG - 87

[Anonymous]

Got it! Thanks

I really appreciate it!

Seems like you have a solid knowledge of Audit. That link was really helpful!

Do you have more relevant links that I can refer too?

THQ

[Author]

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