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Q1. The audit risk I explained were:
1.Nature of business
2.overseas subsidiary risk of diff accounting treatment.
3.Foreign exchange risk- Sub acct will need to be translated to the Parent currency.
4.Bonus scheme – risk that it was attached to senior managers
5.performance, managers could inflate revenue just to get ghe bonus.
6.new inventory system. Risk of error if employees are not properly trained or possible fraud from management trying to overide control.
7.Cultural difference from overseas sub-Lyotta.8.first time audit client- No previous experience of Adams co and considering the time limit from appointment date to Group year end,there could be some detection risk.
9.Annual management charge of $8000000 is also an audit risk. Not sure iv this will be properly classified in the Group acct.
These are some of the points I analysed in Q1 a. Hopefully am right. Finger cross. Praying really hard now to get thru with this paper.
Wishing everybody the very best in their result.
Thanks to open tuition flash card, i was able to figure out what gaming,myopia and ossification was in the exam. overall Exam was a bit hard, hoping for a pass by God’s gracee.
@ nurgul. Thank you so much, your advise is for me, i have been sitting P7 three times in a row now, i think i need to change my way of revising, plus i have other committments, its a good advise to sit one paper at a time. i hope to sit P7 in Dec and my last paper P5 in June 2013. Best of luck in Dec exam.