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Kirsty did q3 as well, for last part took all different shareholders Patel directors etc and calculated their pre and post earnings per share and concluded that investment was worth their while solely based on eps, hope was right thing will just have to see! Didn’t study hedging at all so wasn’t even an option!
@demashi said:
On the face of it look, it didn’t look like a difficult paper. Wasn’t sure what Question 1 (b) (ii) was all about- implications of the debt issues. I ended with a discounted value of $17.7, Question 2 looked easy but just switched off on the inter company cash flow thing and cld write a thing. Had 15 minutes to scribbled down something on the Integrated reporting, memorised the topic 2 nights ago but couldn’t lay thoughts down intelligibly. Hope this 3rd time lucky.Got same share price! So may be we are right! Didn’t deduct debt which may have also been correct but put some note that debt was not deducted under assumptions made in the report!
Paper was fair, hoping for a pass question 1 fcf and share price valuation of bond based on 6% coupon and coupon as computed, analysis of agency issues. Question 3 business valuation new sofp and projected income statement, part b assessment of finance contributors acceptance of restructuring! Q4 can’t really remember rushed this part cause had 20 mins left to read and answer
@ajs90 said:
I decided to do section B questions first and managed to get 3&4 done to what I hope is a satisfactory standard. I didn’t have time for, I think, 3c relating to legal risks so i skipped it and moved on to question 1 with 90mins left.Question 1 – wowza what a nightmare. The question was closely related to one of acca’s technical articles –> https://www.accaglobal.com/uk/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p4/technical-articles/conditional-probability.html
I didn’t manage to finish the assessment of the project with the offer to sell the project after year 1 however I’m pretty sure that this was not a real option question. A lot of people will disagree with me on this but if you read the article linked to above it shows how to assess an offer to sell using probability adjusted cash flows (you look at the probability adjusted present value of cash flows after year 1 and then compare this value to selling the project – the article explains this much better than me). There was no standard deviation in the question so there was no way to calculate the value of a real option.
As I said though I didn’t do any better as I didn’t finish the last 2 parts of Q1 (which will also have cost me at least 3/4 professional marks and caused me to fail I’m fairly certain). My issue is not the difficulty of the question, it’s the time constraint. I really struggle to see why ACCA papers, particularly at the professional level, are so time pressured?! Surely examining someone’s ability to sit and think through a problem is more valuable than assessing how quickly than can get a semi-sensible scatter of relevant numbers down. Giving more time would improve the quality of answers, ensuring that candidates are assessed on what they know rather than how quick they can work. Surely it’s better for an individidual to work a little slower but work in a neat methodical manner providing sensible logical and useful advice for the given scenario. No doubt a reduction in time pressure would also make the markers job easier as well because answers could be presented better.
Even before this I was considering writing to acca to get an understanding of why we are given a tight time constraint, I don’t see much value in it. If candidates have the knowledge but it takes them longer to get it down then I think they deserve to pass, there should not be a punishment for being a slow writer or for being having a bit more thinking time. In the real world it is a much bigger error to steam in to your work and make mistakes than to stop and take a few minutes to really consider what you need to do and how best to present it. This reality should be reflected in the ACCA exams.
Super frustrating to know more than you have time to write.
I’d like to know what others think on this.
AJ
I agree with your reasoning for Q1 and hopefully we get passes for that line of thinking! 🙂
I agree with your reasoning in question 1, and applied a similar technique did not see any options in the question so hopefully we are right together and get passes! 🙂
Question one was def MM for ke and then get wacc and do cashflows not as bad as it appeared just very time consuming! Did question 2 fairly i hope and did only part a of question 4 so have done 83% of paper still hope i get a 50! But this paper is by far the hardest and if I don fail will def choose between my two remaining options of p5 and 6!
<cite>@CONSTY said:</cite>
Q5 the inconsistency in the information provises by the chairman give rise to Other matter paragraph which is not a modification of the audit report.correct
<cite>@jackbailey02 said:</cite>
On question 1 part 1, ive mainly compared this years figures to last years and worked out percentage rises and falls, then talked about material percentages. People talking about gearing ratios etc has got me worried. I didnt use any of the standard ratios. I thought the question was more aimed at analytical proceedures as in compare this years accounts to last years and seeing what big changes there are – this is where you will find the audit risks. Does this sound okay?But aren’t accounting ratios part of of analytical procedures? I would think so and would be better place in the scenario than merely noting movements arent you trying to etsblish level of risk by doing these procedures and going concern? Don’t know maybe just me!
<cite>@laura9876543 said:</cite>
i believe the chairman’s report isnt audited as such and only reviewed for consistency with the FS, if not amended then only need to make users of the accounts aware of the inconsistency.Agree in an other matter paragraph!
<cite> @bmparadzi said:</cite>
Not sure it is pervasive and he did not lie that has to be established need to enquire with him and propose adjustment if not adjusted then other matter in opinion paragraph! We would have performed detailed procedures on revenue and would have established that it is ok and no qualification! Have a read on other procedures!Agree in an other matter paragraph!
<cite> @ugras05 said:</cite>
Is it only me but for question 5c the chairman lied about revenue saying it has increased 20% when it only increased by 6 % therefore misleading the shareholders and users of the financial statements?It is pervasive as it makes the financial statements unreliable?
Not sure it is pervasive and he did not lie that has to be established need to enquire with him and propose adjustment if not adjusted then other matter in opinion paragraph! We would have performed detailed procedures on revenue and would have established that it is ok and no qualification! Have a read on other procedures!
I hope I pass, think the paper was fair although very time pressured(too much information and all appears relevant to what is required):
Question 1:
a)Detailed analytical procedures mainly accounting ratios of profitability, liquidity and solvency. Described the audit risks that I could identify and recommended additional information that may be required.
b) Discussed the ethical problems of accepting the due dilligence procedure as was an audit client!
Used the briefing note format, addressee, introduction, body split between a and b and a conclusion on both a and b.Question 2
a) Quality control, ethical issues about junior staff being assigned complex tasks etc think got enough points for at least 50% of the marks
b) Forensic audit made some points about what we should do in planning for the engagement and then spoke about audit procedures that would be required to be performed to assess the extent of the fraud (Not sure will see how this pans out, hadn’t read that section)Question 3
Application of different standards and what I would expect to find to address the risks that the specific standards pose! IFRS5, IAS17 and disposal and revaluation IAS16, and license IAS 38 intangible assets, hope I scrape!Question 5
IAS 37 provision and adjustment to amount recognised even though not in line with local reporting requirement do not recognise in individual accounts but qualifies for recognition in consol accounts per IFRS so make adj for that. audit report would be modified if not adjusted said material not pervasive so modified and not adverse!Trade receivable material balance, and significant overstatement of profit and receivables therefore adjust. Also said that audit report would be modified if not adjusted said material not pervasive so modified and not adverse!
Chairmans statement needed to bring in line with financials as they will be presented together, Request he adjusts his statement if not include other matter in report detailing the impact!
Hope this gets me a pass! Hopefully my first and last attempt at this paper! Good luck to all
2a) Did anyone use resources to asses strategic capability i.e factors in their control Money Markets Manpower etc?
@carl29 said:
im really not getting how ashridge applied to q1? how did you tie it to the benefits each co had?i used bcg and tows. whether it was ‘right’ or not, i managed a convincing argument, made points about synergies between the co’s and how the group could use these in the future
Remember the axes of the Model benefits and feel so one would be heratland the first one cant remember the name and then apply accordingly. Thats just my opinion!
1a) Ashridge.
1b) Balogun and Hope Hailey
1c) Described benchmarks and then choose relative to co and then advantages and disadvantages
2. PESTEL Strategic Capabilty used the M’s Machinery, Mgt, Markets, Materials, Manpower, Money Etc to asses internal of Trust
2b) Basically used complaints to come up with items to include on web page with 6Is of E-business factored
3a) Advantages and Disadvantages of Franchising.
3b) Other options Licensing, Organic, JV, Strategic Alliance, Takeover Mergers
3c) Time short started just started computing random ratios ROCE, Gearing, and some others cant remeber with end aim of comparing to investment of 500k.I think that the Ashridge portfolio was the most suitable for question 1a, and asses the fit and feel of the business to the holding company. i.e Ballast Business, Heartland Business, Alien Business and Value Trap Business. Think this is more fitting than BCG imo as we required to analyse current performance and future contribution to the business!
Thanks still figure will try and do all 4 and see how I do! Lots of work but have worked in big 4 as external auditor so doubt it could be that difficult
@willynwilson said:
I think pestel is the external environment. Not the strategic options. Sorry!Don think PESTEL WAs relevant more TOWS and Ansoff but thats just me!