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I think the optional questions were more crazy (INT). Plus, I spend so much time in Q1 that by the time I started Q2 I started panicking.
Not enough time….if you take the time to carefully read all the questions, not enough time to give quality answers
i think new sessions in march and September are for students to fail and go back to old june and december sessions. march session was such a disaster so much asked so little time. wanted to write more but no time left. and way too difficult then last dec session. thank you so much examiner
Did anyone notice in Q2 requirement “Examination Procedures…” (I believe he meant Audit Procedures) – must have been in a rush! 😛
Overall predictable; the only issue I thought was time management… and too many standards; we’ve already been tested lots in F7 and P2.
Were there many people sitting exams in the uk centres guys? In comparison to dec and june?
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I didnt find the exam that bad…unless im completely missing something. What does seem to be happining is the examiner breaking the requirements into smaller and smaller seperate segements.
Q 1 was
10 mks for id and explain business risks. How may do they expect 7/8?
10 mks for id and explain 4 risks of material misstatement
6mks on audit planning with an outsourced accounts receivable function
5 mks for ‘what evidence would you expect to see…’ for a payroll issue (two payrolls merged and accrued holidays not taken included twice for some staff when the payrolls merged.)
None of those are ‘bad’ requirements…but most people will have spent more than 18 mins on business risks and romm each. Hard to take a step back and say…thats just 20 marks. In the olden days you might be ‘lucky’ and get a 25mk business risks question … But not anymore.
What has been disappointing is the lack of support for students during this march exam. It was quiet for the first sepetember exam but not a single exam tip or advance guide from anyone to help focus the last week or two of study.
Iirc
Q2 was a 3 part question (5/6 mks each on deferred tax/leases/post year end provisions(no sure about last one). + another requirement i forget.
The ethics question was 3 fairly normal ethics scenarios…the reporting question was 4 fairly normal modifiable scenarios. The amounts of the errors had already been determined here and the drs crs for the adjustments determined which was slightly unusual.
Not necessarily hard but a very broad canvas of issues.
Q1. a) What did you have for your business risks? I struggled to find them, but came up with compliance re keeping live animals as stock, insurance cover re vetinary services being offered, diversifying into own brand, purchase of 20 stores with no set out plan for them, 60 day credit facilities for customers and some others that I can’t remember now.
b) Four significant risks of misstatement was easier: Revenue – healthcare plan annual revenue recognised on day one, receivables balance, provision for refitting shops, can’t remember the other now.
Regprentice,
Maybe 5 business risks 2m each. What u guys putting down for the 20m risks?
Mine INT variant.
Thought Q2(a) was about utilised loss as DTA (only to the extend there’s future taxable profit) + Leases (but didn’t look like IAS 17, what’s it about?) + Convertible bonds wholly recognised as liability (should split accounting).
Q2(b) 8m on audit CAPEX forecast.
As for Q5, although all scenarios containing misstatements, but only the first one will get a qualified opinion isn’t it? If I remember correctly, all the rest didn’t meet the materiality level. But I quite rush with my last Q so I’m not sure whether I see figures correctly. I wasn’t confident when doing this Q ‘coz most of them unmodified. Sad.
I was struggling with business risks too. I simply put down : compliance risk coz some unusual animals might be prihibited to be sold + reputation risk if unsold animal dead bodies not being managed correctly and being found out + purchase of 20 stores w/o proper plan + fully trained staffs can easily leave coz client no control on them + AR increased by 90% problem of handling them thus cash flow problem.
My risk of MM quite different : IFRS15, IAS41 (I was thinking about yearly remeasurement of consumable animals but I guess that’s not correct..), IAS 38 (Risk of recognising internal generated brand as intangible assets, do u think this is reasonable?)
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A hardest exam, particularly regarding time management. However, the scenarios in the questions were also very tough to extract the points for instance difficult to find business risks.e.t.c.
Very much difficult paper.
In last 40 minutes I do the almost 45 marks requirements
Very Very tough time mangement challenge
However, I hope that InshAllah I will pass.
I felt the P7 exam just didn’t offer enough time to write a quality answer. I believe I answered most requirements but not in the detail that I would have liked to given that there was so much scope on question 1.
I am expecting a fail due to a potential lack of depth to most answers, as I have noticed that a common examiner complaint is the lack of depth to answers by candidates, but who can blame them when you are rushing from one question to the next.
Oh well, wait and find out in April, until then it’s time to move on to P3 ready for Thursday – lets hope that is a little easier!! In answer to the above question re how many people were in your exam, my hall must have only had about 40 people in total and about 60% of them were sitting F8 rather than P7.@tanlihtyng said:
Thought Q2(a) was about utilised loss as DTA (only to the extend there’s future taxable profit) + Leases (but didn’t look like IAS 17, what’s it about?) + Convertible bonds wholly recognised as liability (should split accounting)..
i) The main thing I picked up on with the deferred tax, was the jurisdiction’s rule that entitlement to carry forward expired when there was a significant change in trading, and seeing as revenue or profit before tax (can’t remember which one it was) had increased by 62.5% on the prior year, I thought “significant” had to be clarified to see whether the deferred tax asset still qualified.
ii) Convertible bond. I did ramble a bit about this. Left it til the very end of the exam as couldn’t remember the treatment, but eventually went on about splitting it into equity and liability instead of just treating it as a liability.
iii) The operating lease should be accounted for evenly over the period of it. So it was $270 that should’ve been recognised and not $150. Also, copy of lease agreement needed to verify that it was indeed an operating lease.
@Fidget said:
i) ..I thought “significant” had to be clarified to see whether the deferred tax asset still qualified.…
iii) The operating lease should be accounted for evenly over the period of it. So it was $270 that should’ve been recognised and not $150. Also, copy of lease agreement needed to verify that it was indeed an operating lease.
For (i), yes I did write the same thing.
For (iii), I focused on audit evidences such as lease contract has been inspected to verify leasing terms and payment arrangements, payments agreed to bank statement n invoices, and one more which I forgot.
that time was just trying to get some marks, did think of matching concept but forgot about it after that. When I see ‘lease’, I was like what’s is it inside IAS17 related to this, couldn’t think of any
What did you come up with for the Capital Expenditure Review? Worth 8 marks that was, but I wasn’t really sure what it was asking me to do.
Not a bad exam although agree with others it was time pressured, I answered about 90%.
Q1
Business risks were more difficult to pick out this time round, I wrote about importing issues, new brand name, expansion of business/GC, duplicated payroll records could be a risk of fraud.Q2
Found this a lot harder and ran out of time, didn’t do part b.Q3
Risk of Fraud in auditing revenue – wrote about responsibilities and risk assessment.Cash transfer – wrote about money laundering
Provision – it should be recognised
Q4
A nice question on ethics, followed identifying the threat, its significance and any safeguards so hoping to score well.
With regards to the deferred tax asset I wrote that due to a change in business strategy, I.e rather than buying properties they were now going to construct them, the utilised tax losses should not be offset against future profits per the jurisdiction.
@tanlihtyng said:
As for Q5, although all scenarios containing misstatements, but only the first one will get a qualified opinion isn’t it? If I remember correctly, all the rest didn’t meet the materiality level. But I quite rush with my last Q so I’m not sure whether I see figures correctly. I wasn’t confident when doing this Q ‘coz most of them unmodified. Sad.
For me all were not material, even when aggregated together. So I said an unmodified report should be issued. I think we has 6 marks to comment on impact of audit opinion and report. With an unmodified opinion, i really did not know what to comment in order to achieved the marks.
Any other comments regarding this?I believe that there should also be a reasonable assurance that the company will generate future profits so as to offset against tax losses. So as a result, obtain perhaps a prospective financial statement and other forecasts in order to determine if future profit will be generated. Not sure if i got this right
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