| By :
Sarah Simmons
Part of the CPA exam covers different planning procedures, one of which is planning an audit. Mnemonic memory aids can be extremely helpful in CPA review because they assist you in remembering the details of certain concepts, and they help you to get through multiple choice questions on the exam, as well as help to understand the big picture of certain topics. A great way to remember the ten steps in planning an audit is with the mnemonic "BRAINSTOPS." Read on to learn what this stands for, and how to remember it for when you take the CPA exam. The mnemonic BRAINSTOPS reminds you that an auditor's brain stops if they don't plan out an audit carefully before beginning the detailed testing of client records. Here is what you need to remember the 10 steps in planning an audit: B Basic discussions with the client about the nature of the engagement and the client's business and industry should always be performed first when the auditor meets the integral employees, or new employees of a continuing client. The overall audit strategy or the timing of the audit may be discussed, but don't discuss specific audit procedures or materiality. R Review of audit documentation from previous audits performed by the accounting firm or a previous auditor (if they have made this audit documentation available) will assist in developing a good outline of the audit program. A Ask about recent developments in the company such as mergers, new product lines, etc. which could cause the audit to differ from earlier years. I Interim financial statements must be analyzed to identify accounts and transactions that differ from expectations (based on factors such as prior periods or budgets). The performance of such analytical procedures is mandatory in the planning of an audit to identify accounts that may be misstated or accounts that deserve special emphasis within the audit program. N Non-audit personnel of the accounting firm who have provided services to the client (such as the tax department of the company) should be identified and consulted to learn more about the client. S Staffing for the audit should be determined and a meeting must be held to discuss the engagement and budgeting. T Timing of the various audit procedures should be determined, such as internal control testing, inventory counts, management rep letter, etc. For example, internal control testing needs to be performed early in the audit, while inventory counts need to be performed at or near the balance sheet date and the client representation letter cannot be obtained until the end of the audit fieldwork. O Outside assistance needs should be determined, including the use of a specialist as required (such as a tax practitioner, inventory inspection, or an IT professional) and the determination of the extent the internal auditors of the client will be involved. P Pronouncements on accounting principles and audit guides should be read or reviewed to assist in the development of complete audit programs fitting the unique needs of client's business and industry. S Scheduling with the client is needed to coordinate activities. For example, client-prepared schedules need to be ready when the auditor is expected to examine them, and the client needs to be informed of dates when they will be prohibited from accessing bank safe deposit boxes to ensure the integrity of counts of securities held at banks. Now that you know how mnemonic devices work for studying, you can make up your own to prepare for the CPA exam. Or, choose a trustworthy CPA review company that can show you their own studying tips to pass the CPA exam.
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