AUD Study Group Q1 2017
February 12, 2017 at 9:49 am #1476457
Control environment is “tone at the top” Organizational structure is one of the principle of control environment.
Organizational structure, ” Management establish an organizational structure, including reporting lines, authorities, and responsibilities, that is appropriate to the organization objectives.”
If you have becker, check out BEC chapter one, page 13.February 12, 2017 at 11:24 am #1476505
Took AUD for the 3rd and, hopefully last, time yesterday. Felt like I really nailed the MCQs this time and had at least 4 TBS I felt confident on though I find myself second guessing now whether or not I selected the correct standards on the research even though I got the right section and paragraph 🙃.February 12, 2017 at 12:11 pm #1476529
Good luck! I am taking mine in exactly three weeks. What did you differently this time around?February 12, 2017 at 1:07 pm #1476543
I spent a lot more time hammering MCQs in the Wiley test bank. I took diagnostic exams to determine what I couldn't remember and focused more time in those areas.February 13, 2017 at 11:15 am #1477173
Hey, guys! Can you all help clarify a few things I'm confused about right now to do with sampling?
1. The tolerable rate is supposed to be HIGHER than the likely rate of deviation, correct?
2. In determining the sample size, you need to know the tolerable rate of deviation, likely rate of deviation, and the risk of assessing control risk too low. Does this mean they don't consider the risk of assessing control risk too high, just too low only?
3. What exactly does ‘risk of assessing control risk too low' even really mean? Does this mean that the auditor is putting too much faith in internal controls, thereby reducing substantive tests when the control risk is actually higher than they think it is? When this comes to rates of deviation, if risk of assessing control risk is too low, does that mean the auditor thinks the tolerable rate is higher than the likely rate of deviation when in all actuality, the likely rate of deviation is greater than the tolerable rate? And vice versa for if the risk of assessing control risk too high?
This sampling stuff has really been more of a struggle to comprehend than most sections so far. I don't think it's what I'm actually learning that is difficult as much as the terminology is just confusing me because I don't really know what it means. Never taken an auditing class in my life and I am using Wiley CPAexcel.February 13, 2017 at 9:10 pm #1477636
@scared-cpa sampling is really confusing along with transaction cycles. I am confused as well.
1) Uper deviation rate = sample deviation rate +allowance for sample risk (cushion) =upper deviation rate
Tolerable deviation great than upper deviation=we can rely on
Tolerable deviation less than upper deviation=do not rely on
2) to determine sample size you need to know:
1)Risk of assessing control risk too low. want less risk, increase sample size. want more risk, decrease sample size. (inverse relationship)
2)tolerable deviation. want less deviation, increase sample size. want more deviation, decrease sample size (inverse relationship)
3)expected deviation. less deviation, decrease sample size, more deviation, increase sample size (direct relationship.
4)population size (not an issue)
I think I saw a questions regarding assessing control risk high, i got it wrong. It suppose to be only low
Bleh 3 more weeks left, i hope this stuff clicks.February 14, 2017 at 7:08 pm #1478236
Thank you, Moose!
When do you have your exam? I notice you said 3 weeks from now…I'm taking AUD 03/08. May I ask what you're using to study with and how far through the material you are? I'm hoping I can compare where I am to you in how much I'm behind. I'm scheduled to be through all the material by the 3rd of MArch which doesn't leave much time for review but it doesn't seem like I can go much faster.February 14, 2017 at 11:14 pm #1478346
My exam is scheduled for March 5th. I just finished chapter 3 using only becker. I'll try finishing chapter 4 by friday, chapter 5 saturday, and 6 on sunday. How many hours to do you study per day? I can do about 4-5 hours a day.February 14, 2017 at 11:50 pm #1478368
Can someone please explain the concept behind kiting? I can't visualize how kiting works.February 15, 2017 at 7:12 pm #1478862
Standard auditing procedures – FIVE CARROTS
F – Footing, crossfooting, recalculation – verify mathematical accuracy – Valuation & Allocation
Subsequent events = investigate change in CAP/Stock records of YE
Statement of Cash Flow = Reconcile amount with other F/S Accounts
I – Inquiry – both internal and external
V – Vouching – directional testing; auditor examines support for existence and occurrence assertions Authorization – (Vouch GL to Invoice)
E – Examination/Inspection – provides evidence about the existence assertion – understand/classify)
C – Confirmation – Type of inquiry obtained from third party – Existence/Occurrence/Cut-off rules)
A – Analytical procedures – evaluate financial information through the study of data relationships
R – Reperformance – auditor re-performs procedures or controls originally performed by the client
R – Reconciliation – substantiates the existence and valuation of accounts
O – Observation – auditor looks at a process or procedure performed by others (direct knowledge – exist/occurrence)
T – Tracing – directional testing; examines support for the completeness assertions (Accuracy)-Invoice/fixed asset to G/L
C- Cut-off Review – Y-E transaction review
A – Auditor’s Related Account Stimulation – Loan/Interest –
R – Representation Letter
S – Subsequent events review – perform certain procedures after balance sheet dateFebruary 15, 2017 at 9:55 pm #1478947
@moose, if I remember correctly Kiting occurs when you have 2 banks. For instance, I have bank accounting with Comerica and one with Chase. I write a check to Chase. Technically that check is in transit and should reduce my balance from Comerica after I cut the check. But instead of reducing my balance my check amount shows up in both banks. That is when Kiting happens, essentially overstating the cash balance. An audit procedure to detect this fraud is to look at cutoff statements. Hope that helps.February 15, 2017 at 9:56 pm #1478949
Im currently working on Chapter 6.. Don't underestimate this. Not saying it is hard but its heavily covered. I scored in the 80's on Becker's HW but on my breakdown I got weaker both attempt so Idk what's wrong with me. Ch 6 could be done in 1 full day. 5 is also possible. 4 would be a killer to fit 1 day.. I would try to really understand the transaction cycles and all the assertions.February 16, 2017 at 9:01 am #1479159
Thanks Spartan, I get it. I still don't know how it will work since it usually it takes couple of days for the check to clear.
Transaction cycles are confusing. I worked in the AP, AR, purchasing, and receiving department and I find some of the example totally opposite of what I deal with. For assertions, I have memorize Five carrot cars and the cover u mnemonic, but still working on how its applied.February 16, 2017 at 9:39 am #1479168
The check will take a couple of days to clear the bank but on the books of the company writing the check the transfer should be near simultaneous I believe. Kiting is an overstatement of cash on the books of a company not necessarily within the bank statement.February 16, 2017 at 1:41 pm #1479373
The Ninjas sent us some free <3 Valentines Day MCQ <3 and I could use some help figuring out the below question:
In making risk assessments, the auditor should identify and document the controls that are likely to prevent or detect and correct material misstatements in specific relevant assertions. Controls can either be directly or indirectly related to an assertion in which of the following ways?
A. The more indirect the relationship, the less effective that control may be.
B. The more indirect the relationship, the more effective that control may be.
C. The more direct the relationship, the higher the overall control risk may be.
D. The more direct the relationship, the lower the overall control risk may be
The answer is A:
In making risk assessments, the auditor should identify and document the controls that are likely to prevent or detect and correct material misstatements in specific relevant assertions. Controls can either be directly or indirectly related to an assertion. The more indirect the relationship, the less effective that control may be in preventing or detecting and correcting misstatements in that assertion.
Why is C wrong?February 16, 2017 at 5:41 pm #1479549
@Zestes thanks for you input, it all makes sense now.February 16, 2017 at 7:59 pm #1479666
I have a question
if you did the video classes without reading any material
after that you take a quiz on that chapter and get 50%
do you think that is normal ? good ? bad score
I really would take your feedbacks about that as I am going through quizzes after see videos for each chapter and my average is like 50%
so off-course once I finish the material videos I will start reviewing and take my notes and hit a hundreds MCQ
is that unusual mark ?!February 16, 2017 at 8:04 pm #1479667
@evs, that question is just poorly worded imo. I still have trouble trying to understand what it is even saying. Is this from Gleim?February 16, 2017 at 9:20 pm #1479723
@abdulmajid Thats normal. Just make sure you understand why you got it wrong. I suggest you not rushing through the questions.February 16, 2017 at 9:22 pm #1479724February 16, 2017 at 10:57 pm #1479780
I have until November to finish all 4 parts. I have passed FAR and just took BEC. I have AUD in less than 3 weeks (March 8th). I am using Becker and I am currently in section 2. DO I have a chance? Or should I reschedule and take it in the beginning of April when the new test comes out?February 16, 2017 at 11:33 pm #1479817
@moose, I know even though it is my 3rd time it was ver overwhelming I skipped Tab 3 and 4 after the first 2 SIMS tab. Honestly though I have yet to see something to that extent on the actual exam. Becker SIMS are tough imo. @mefzr. I would still try to take it this quarter because you have nothing to lose. IF you find yourself failing you can immediately retake it in April. Don't waste the window.
I will have to go back to Ch 4 Sims this weekend. UghFebruary 17, 2017 at 9:10 am #1480014
@Spartan technically this is my third time too. I took this exam last year without studying assuming it will be a walk in the park, boy I was wrong. My score was 56 as expected. Then, I ended up studied for 14 days and retook it with completely skipping chapter 4. My first testlet was Medium, Flagged few. The second testlet was foreign to me, and third testlet was medium. 4 out of the 7 testlets were really simple, 2 were really hard, and the last one was DRS related to chapter 4 that I completely skipped (even though I had some time left). I assumed that DRS would be a pretest because it was so long with multiple tabs. I was really confident I would pass…BAAM a 67.
I realized I can't half ass these exam, so, here I am studying every small detail and concept. Sims on chapter 4 are so discouraging.February 17, 2017 at 11:57 am #1480221
I have no clue where it's from. The Ninjas emailed it to us.February 17, 2017 at 1:24 pm #1480308
Starting to study for AUD for Q2 using Beckers new version online. Does anybody know if they still have the Ebook with all the notes already on it? I don't watch the lectures and just copy the notes onto my book. Thanks!February 17, 2017 at 9:06 pm #1491847
So management claims that their cash,asset, AR, Inventor..etc are:
Valuation, allocation, accuracy
Right and obligation
Understanding and classification
and we as auditor use substantive procedures aka test of details and analytical procedure to corroborate managements assertions.
Substantive test are Five carrot cars mentioned above. am I correct?February 18, 2017 at 8:42 am #1491994
distractedParticipantFebruary 18, 2017 at 9:35 am #1492002February 19, 2017 at 10:51 am #1492630
These Becker Transaction Cycle SIMS are so brutal. Im getting super nervous right now with few days left to review which I have yet to start.
@moose, post some questions on here. Hope we can help clarify things for you. Which also gives us the opportunity to show we actually understand 🙂February 19, 2017 at 3:34 pm #1492767
I'm finally done going through at least once all MCQs… i didnt get a chance to really take notes and read the lectures because i of course procrastinated…I'm scheduled for 3/9,, which i dont want to really reschedule, although i dont feel confident enough that i know the material… can someone give me advice on how I should get through the next two weeks? My thought process was to get through all SIMS and just hammer out MCQs everyday til then…
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