Forums › ACCA Forums › ACCA AAA Advanced Audit and Assurance Forums › *** December 2021 ACCA AAA exam – Instant Poll and comments ***
- This topic has 27 replies, 17 voices, and was last updated 2 years ago by chally.
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- December 6, 2021 at 10:56 am #642696December 6, 2021 at 4:14 pm #642741
What was the right opinion for the subsidiary that was accounted for as an investment?
December 6, 2021 at 4:29 pm #642747Q1 24 marks Audit risk with only 3 Exhibit and 25 mark quality control with only one requirement Even experienced my hardest paper
I think time was unfair examiner intentionally want to reduce pass rate.ACCA should balance marks and syllabus examined
December 6, 2021 at 4:43 pm #642754Q1 24 marks significant audit risks followed by procedures question for 6 marks then Group auditor question for 12 marks and ethics question 4 marks.
Time management was still crucial.
December 6, 2021 at 4:47 pm #642757AAA exam was honestly tough…
December 6, 2021 at 5:20 pm #642775it was time pressured,couldn’t fininish it…..
December 6, 2021 at 5:33 pm #642778Guys question 3 about the IT company: what opinion you got in the last question for 7 marks – it was material and pervasive – I got materiality of 433% – to losses before tax and put as adverse opinion. Any got the same?
December 6, 2021 at 6:02 pm #642784yes same, i concluded material and pervasive to issue adverse opinion
December 6, 2021 at 6:04 pm #642786calculated materiality based on total assets
Jennie_fierz wrote:yes same, i concluded material and pervasive to issue adverse opinion
December 6, 2021 at 6:06 pm #642788My Q3 was acquisition of subsidiary for which investment was put as ‘long-term investment’. I wrote that goodwill should have been calculated. I think it was qualified opinion with except for.
The other part of Q3 was KAM. Which matter should be included – I chose inventory valuation and system. Third one I said shouldnt be included in the KAM.
Q1 was very tricky – i couldnt understand what they meant by revenue being net of 14m??
I felt the whole question mainly focused on R&D.December 6, 2021 at 6:10 pm #642789Hey everybody, how did you all get on?
Here’s my exam to the best of my memory 🙂
Q1 – Claude Co – Listed Pharmaceutical Company
(a) Business risks – 10
(b) ROMM – 20
(c) Audit procedures and control tests (!!!) about research and development costs – 8
(d) Ethical threats from long association with a client – 8Q2
(a) Due diligence on potential acquisition for client – 10
(b) Enquiries to target company about future sales & receivables (strange question, assumed they meant what evidence they would need for DD report) – 9
(c) Evidence about a warehouse expansion – 5Q3
(a) (i) KAMs (ii) KAMs and disclosures around slow-moving inventory, poor internal control system, conflict of interest – 12
(b) Subsidiary not consolidated and implications for audit – 13 (don’t know how they expected us to get 13 relevant points down for a single FR issue lol)December 6, 2021 at 6:12 pm #642790lkleponyte wrote:My Q3 was acquisition of subsidiary for which investment was put as ‘long-term investment’. I wrote that goodwill should have been calculated. I think it was qualified opinion with except for.
I had that Q3 also, I hope your answer is 100% correct because that’s what I wrote aswell :))))
December 6, 2021 at 6:28 pm #642794I went with adverse opinion… Because if they had consolidated, the subsidiary was practically making a loss as it was not functioning and management integrity was questionable for not consolidating… That could mislead intended users
December 6, 2021 at 6:31 pm #642795i think there were two different papers, what do you think?
Q1 – Jewellery brand with 3 wholly own subs
Audit risks
principal audit procedures for Inventory
Audit strategy
EthicsQ2 – Ethics, QC and professional matters
Q3 – Matters to consider (going concern, impairment), KAM and Audit reportDecember 6, 2021 at 7:09 pm #642798Had same exam – how did you find the time?
Wasn’t Q3 on the investment a subsequent event? As on the 1st day after the YE the net assets changed?
So would need to put an adjustment through to decrease the investment?
December 6, 2021 at 7:14 pm #642800Yeah! thats was relating to the Goodwill at acq
December 6, 2021 at 7:20 pm #642801Jennie_fierz wrote:i think there were two different papers, what do you think?
Q1 – Jewellery brand with 3 wholly own subs<br>Audit risks<br>principal audit procedures for Inventory<br>Audit strategy<br>EthicsThere are multiple exams now (at strategic level anyway). The person sitting next to you might have a completely different paper. I find this strange as some people might pass or fail depending on what comes up.
December 6, 2021 at 7:24 pm #642802Correct. There were two different variants. I had cloth and jewellery in 1, second it was ethics and lots of impairments. Third it was IT company about going concern, kam and opinion.
December 6, 2021 at 7:56 pm #642806what wr your answers?
– in audit report ,
– audit risk?
– and last question ?December 6, 2021 at 10:02 pm #642822Q1 – 10 marks for identifying business risks in a Pharmaceutical industry. Possibly 8 marks here for identifying one from each of Financial, Compliance, operational and strategic risks from the info.
20 marks for Risk of Material Misstatement, which in theory could be anything to do with financial statements or our audit of them. Lots of info here, there was R&D, legal cases, loans, going concern risk, project investment, impairment, fair value etc
8 marks on audit procedures to do with R&D of project. I used Analytical, Enquiry, Inspection, Observation and Recalculation detail.
8 marks on ethics on long term associated audit firm and the advantages and disadvantages. Mainly threats of familiarity and self review. Advantages are reduction in cost, understanding of niche areas/expertise, disadvantages are cost, understanding new audit client, competition etc.Q2 was weird – audit completion questions on a manufacturing and packaging supplier. Part1 around due diligence and whether the review could be undertaken by your firm and any matters to be considered – mainly around competence, deadlines, independence, oversight, ISQC1, arms length etc l.
Questions on enquiry’s to be be considered in relation to performing the due diligence review – this was tricky against the management accounts but generally I went with supply chain risks, ethics, related party transactions, conflicts of interest, shareholding’s etc.
Last section lf Q2 was on other matters relating to the second warehouse, this seemed to be asking what info you would request to assess the issues. I went with checking planning permission, checking loan requirements and lease etc
3 was ISA701 KAM so if you knew that well done because I didn’t. Essentially review risk of material misstatement and significant audit risk – so first two (inventory valuation and control) were KAM, management judgement is a key one. Last one isnt a conflict as there is no engagement.
Second part of question was on subsidiary consolidation which again was a bit niche. Noticed that they seemed to have overpaid for their share (52% of 28m is 14m, they paid 34m in cash). Questions around control – if control is correct then should form part of the consolidated financial statements. Material issue as 10% of Total Assets. Few other bits to hopefully grab some marks.Idk how it went, think there was a lot to write about and I ran out of time towards the end. Spent too long on A in the audit risk section. See what happens in January – good luck all.
December 6, 2021 at 10:45 pm #642828A lot of similarities with my answers, I struggle a little bit with how things to be write about on the last bit of Q1. Last bit of the Q3 I calculated goodwill since we were given the info, and pointed out that materiality issue.
I’ve failed this exam twice before with 47, I really put my heart into the exam this time, answered everything mechanically, an explanation behind every point and hardly any of my answers were feeling stretched. Best of luck everyone in 6 weeks.
December 7, 2021 at 12:43 am #642836Do you remember if that acquisition of the sub was an event that occurred after year end? Just realized I didn’t pay attention to the date of acquisition.
Plus… Did you recommend an opinion in the event that management refused to change the accounting treatment
December 7, 2021 at 5:24 am #642844Hi, do you remember the xact question of part 1 of Q2? wasn’t it what the audit committee think
whether the review could be undertaken by your firm? do u remember the exact question?December 7, 2021 at 7:18 am #642860amnatanveer7@gmail.com wrote:Hi, do you remember the xact question of part 1 of Q2? wasn’t it what the audit committee think
whether the review could be undertaken by your firm? do u remember the exact question?Yes. I remember this one. It was practice management but from the Group Audit committee’s perspective.
In my response I still made reference to the matters an auditor must consider before engaging a non-audit service however, I answered it from the committee’s perspective. Don’t know if this is what they asked for but i referenced the knowledge bit back to the scenario indicating resources, competence, independent, separate engagement letter needed and so on.
December 8, 2021 at 5:47 am #643032amnatanveer7@gmail.com wrote:Hi, do you remember the xact question of part 1 of Q2? wasn’t it what the audit committee think
whether the review could be undertaken by your firm? do u remember the exact question?I hope u did it right. because this is the exactly way by which i attempted.
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