AUD Study Group Q1 2017
January 9, 2017 at 10:22 pm #1428839
Lol, me too believe me!
Which of the following is an audit procedure that an auditor would most likely perform concerning litigation, claims, and assessments?
Request the client's lawyer to evaluate whether the client's pending litigation, claims, and assessments indicate a going concern problem.
Examine the legal documents in the client's lawyer's possession concerning litigation, claims, and assessments to which the lawyer has devoted substantial attention.
Discuss with management the controls adopted for evaluating and accounting for litigation, claims, and assessments.
Confirm directly with the client's lawyer that all litigation, claims, and assessments have been recorded or disclosed in the financial statements.January 10, 2017 at 4:14 am #1429133
I have just hit the review phrase in Ninja MCQ. I am about to begin the Wiley questions this week, but i wanted to see if anyone can guide me to simulations that require journal entries. when I took the test in December, I believe I failed because I had 3 journal entry questions, which I was naive and did not expect. Well, not this time.
I have Ninja Simulations and Wiley test bank, is there any questions directly related to adjusting journal entries to beginning balances or even just problems that may help me put the pieces of the puzzle together?
Thanks!January 10, 2017 at 9:18 am #1434158
@mperez…there's a list that details all the simulations somewhere on the ninja forum. I can't remember which page it's on. But it's titled just thatJanuary 10, 2017 at 11:21 am #1434257
CorrectJanuary 10, 2017 at 12:41 pm #1434566
@perez I printed it but can't find it. If I can find it at home tonight I'll try to get it in here but I don't think I can load a pic. If you can't find it and I do maybe i can bring it to work and scan for you tomorrow. Just give me an emailJanuary 10, 2017 at 12:45 pm #1434570
@ForemJanuary 10, 2017 at 12:48 pm #1434573
Under the ethical standards of the profession in the US, which of the following circumstances would impair independence in the audit of an issu or but would not impair inedependence in tHe audit of a nonissuer?
A. Firm performing audit also designed and implented the clients financial info system
B. Audit firm provided a loan to the client during the prior year.
C. Lead audit partner has worked on the engagement for ten years
D. Audit firm has an immaterial direct financial interest in the client.January 10, 2017 at 12:48 pm #1434578
—January 10, 2017 at 12:50 pm #1434584
One of the incorrect answers to a question in my Becker book says litigation not related to an audit engagement for an immaterial amount does not impair independence.
So what if in the same situation, it is material?January 10, 2017 at 12:56 pm #1434587
Audit documentation should:
A. Not be permitted to serve as a reference source for the client
B. Not contain critical comments concerning mgmt
C. Show that accounting records agree it reconcile with the financials
D. Be considered the primary support for the financials being auditedJanuary 10, 2017 at 1:00 pm #1434593
Would it be D? – what program are you using?January 10, 2017 at 3:20 pm #1434729January 10, 2017 at 3:43 pm #1434749
I was referring to the question that I answered. I have Ninja as well and I have not seen that one yet.
Thank you for the questions 🙂January 10, 2017 at 3:46 pm #1434759
Test Your Might.
To keep the answers all in one place, please post in the FB thread to enter.January 10, 2017 at 4:22 pm #1434806
6-4 or 6-5 perez?January 10, 2017 at 5:11 pm #1434839January 10, 2017 at 6:09 pm #1434908
I certainly welcome the posting of a problem question that someone needs help with here and there – but not as a continuous “quiz” in the study group.
For one thing, allowing it puts me at odds with the AICPA because they own the questions.
(unless I'm completely mis-reading things in this thread) 🙂January 10, 2017 at 8:11 pm #1435023
Oh, sorry Jeff! I thought it was basically the same thing as it asking in the Ninja multiple choice! Everyone that asked for the SIM list let me know if you don't find it!January 10, 2017 at 9:26 pm #1435074
I have my list printed, but I was trying to access it on the site. How do you get to it Jeff?January 10, 2017 at 9:29 pm #1435083
Does anyone have a better understanding of other modifications to the cash basis of accounting other than long term debt & depreciation?January 10, 2017 at 9:45 pm #1435097
No worries – it's in the helpful links area where you launch your mcqs – in the same are as the AICPA released pdfsJanuary 11, 2017 at 12:53 am #1435221
So I'm a bit confused on something I read in the NINJA Notes, and couldn't get clarification in the actual standards.
In a compilation when financial statements omit substantially all disclosure but are otherwise in conformity with the Applicable Financial Reporting Framework, a paragraph is added after the conclusion paragraph stating that:
-MGMT has elected to omit substantially all disclosures
-If the disclosures were included, they may affect the users decisions on the FS
-The FS aren't intended for those who are uninformed on such matters
OK, I got it, or so I thought until I read that an emphasis paragraph is not a substitute for disclosure, and that the accountant should not include an emphasis paragraph in a compilation report on FS that omit substantially all disclosures unless the matter is disclosed is the FS.
Does this mean that the former paragraph should only be included when the FS being complied disclose the fact that substantially all disclosures have been omitted? If the omission is not properly disclosed in the client's FS, then the accountant is precluded from making reference to the omission in the report and needs to discuss the need for said disclosure with the client. If client refuses revisions, then the accountant should consider attorney consultation and potential withdrawal.
And finally, this rule only applies to the election to omit substantially all disclosures, not any other departures from the Applicable Financial Reporting Framework? The accountant may modify the standard compilation report with an emphasis paragraph for to disclose any other departure, whether or not disclosed in the client's FS, correct? Then the same process: determine if emphasis is adequate, discuss revision with client, then consider legal counsel and withdrawal upon client refusal.
Am I understanding this correctly? If not, can someone please set me straight?January 11, 2017 at 10:51 am #1435362
I'm sorry. I've read this three times and you're losing me. 😓January 11, 2017 at 12:24 pm #1435455
So I'm not the only one, lol. If you want to see the material directly, here are the places to look:
AR 80.20 – The paragraph stating that MGMT has elected to omit substantially all disclosures.
AR 80.26 – Statement that an emphasis paragraph should not be added when substantially all disclosures are omitted.
AR 80.27 through AR 80.29 – Explanation of handling all other departures and the consideration of withdrawal and legal counsel.
I may have just figured it out actually. The paragraph specified in AR 80.20 is added after the Accountant's Responsibility section, so it is technically not an Emphasis of Matter paragraph. This would mean that this paragraph is included anytime a compilation is issued on FS that omit substantially all disclosures, and the accountant has the option to add the EOM paragraph after the conclusion if the fact of omission is also disclosed in the FS. For all other departures from the Applicable Financial Framework, you would follow AR 80.27-29. It also seems that the non-disclosure rule of AR 80.26 only applies to EOM paragraphs concerning omission of substantially all disclosures.January 11, 2017 at 12:35 pm #1435458
Modified Cash Basis is a hybrid method of Cash Basis and Accrual Basis. It uses the Cash approach for ST items, and the Accrual approach for LT items. It's not GAAP.January 11, 2017 at 12:59 pm #1435485
Here's an article on OCBOAs that could prove useful:January 11, 2017 at 1:01 pm #1435491
Hunter, what is your study process. Are you just reading all of the regulatory sections? And thanks for your input on cash basis but I am looking for other specific modifications that can be made. The comp and review guide in our research software says that any modification can be made if relevant for GAAP and not illogical based on the circumstances for modified cash.January 11, 2017 at 1:03 pm #1435496
No, just when I get snagged on certain topics. Also, it seems more appropriate to reference the actual standards than to try and discuss the study material given that not everyone is using NINJA like myself.January 11, 2017 at 1:05 pm #1435502
NINJA? Which book and page are you referencing?
I found excerpts as follows stating basically the same thing:
Book 4, p 65
Book 5, p 30
If we are talking about the same thing, I believe this is just stating that the Cash Basis and Modified Cash Basis are considered Special-purpose Frameworks and that the modifications need to be properly supported. Neither Cash nor Modified Cash are GAAP, that's why they're Special-Purpose. The Cash Basis can be modified to meet the needs of the Special-Purpose, but the reasoning needs to be properly supported.
This is just my understanding of what I've read, I could be wrong.
The Journal of Accountancy article I linked above is really informative on this subject.January 11, 2017 at 11:11 pm #1436019
Sorry, wrong post.
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