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oh yes. review of cash flow statement…. throwing in some procedure such as obtaining the correspondence and review the status of the negotiation of loan with parent….checking recepits for payments as an evidence how well the credit control is working ….etc
@mfio1985 said:
How did you set yours up ? i done it in breifing note format then looked at each matter such revenue recognition then gave the financial risk then the audit procedure to useand in Q1aii, i just went through listed all the ethical and QC problems and safeguards
in Q2 i just went through each part of the cashflow forecast and explainded how it could be incorrect on the basis and then conclued at the end how it all ties back to going concern thn followed by audit procduers used to obtain evedence for the cash flow ???
i seperatly done part ii to question 1a in the breifing notes,
I started with the format then first heading was matters to be considered which were materiality of the estimated additional cost , Risk coz of estimation being subjective..other risk waas management bias cuz they wanted to sell the co, then accounting treatment…I messed up a bit and stated financial statement risk in other heading. ..then i suggested procedure specific to the estimated cost. same headings I used for the next issue….Then for part c I used headings (inadequate audit procedure , too much reliance on management representation and expert issue (the ethical issue was familiarity threat which resulted in the loss of professional skepticism then concluded.
For q2 i used cash flow and SOFP info and explain the matters using heading…declining market (Impairment–overstatment of tangible and non tangible asset ), defferred tax(no future profit but recovery is expected the basis should be assessed) , economic recession (customer default overstated receivables) repayments of debt ….OD doubled ..etc all this will eventually leads to going concern issue ….. and then ..In part b I wrote about the implications on audit report.it was tough but one could expect this kind of difficulty in professional level papers….the paper was time pressured no doubt about it…q1 and 2 took so long that I was left with 45 min to deal with section B …I was thrown off by q3 part b I had difficulty in suggesting procedures for opening bals..probably messed up 8 marks..but did part a well……Between Q3 and Q5 I wanted to go for question 5 but with the time remaining i thought It was wise to select q3…..Lastly I ve got 25 min left for last Q4 which was a blessing I would say. overall it went well and am hoping to get 50 marks…rest is in the hands of examiners..lets hope for the best.
@mfio1985 said:
In my opinion it wasnt at all the only problem was that it was really time pressured and in some parts gave too many options to write about, Q2 was pretty easy as it stated that you should analyis the cash flow statement not just going concern of it, and use that info to conclude on if the company was a goin concern and, every question asked for adudit evidence that practicaly full mark for just throwing in some aduit procedures, and question one as long as you talked about held for sale NCA, Revenue recognition, construction contract cost recognition, segmentation and a couple other audit risks with audit evedince for each thats what i did anyone else do the same?I wrote about construction contract and i wrote procedure only about estimated additional costs of 350000 it should be immediately recognise as per IAS 11 and because it was estimated it was inherently risky….plus the newly qualified architect making estimates makes it more risky because he may lack the neccessary expertise to carry out complex estimation….and couple more points……….for treasured division IFRS 5 held for sale and discontinued operations and a little bit of IFRS 8 segmentation. Hope I dealt with it correctly.
In q2 I thought it was the assessment of going concern with the review of SOFP and cash flow….so I used both in my analysis.
@student1982 said:
What did people put for the matters to be considered for Q1 Part a (i think…)materiality , risk , expert was employed by entity he was newly qualified so might not have the required level of experience to carry out complex estimations…his objectivity and competence should be assessed , management bias , estimation inherently risky due to the subjectivity involves and accounting treatment in IAS 11
@asthavora85 said:
did anyone do q4?yes with 45min remaining for attempting 2 question I thought Q4 was less time consuming…… why?
@alancong said:
can anyone tell what’s synergy manager and portfolio manager and parent manager , i did not remember where didi they appear in my notes at all?portfolio managers manages strategic business units (SBUs) as invetement portfolio and cotrol it through budgets by setting financial targets.
synergy managers attempts to cordinates SBUs function to benefit from synergies (operatinal marketing etc) parent exercise strategic control over SBUs.in the case scenario this approach was adopted.
parental developer: It is like parenting SBUs….identifying fit between SBU CSF and the skills , resource and understanding parent can provide and the opportunity it gets to help it ….(Ashridge model feel and benefit)
@phemy said:
I am the most desperate of all, having passed all other ACCA papers at not more than 2 attempts at most since June 2009, and today’s P3 exam was my sixth (6th) attempt. Just like in today’s paper, I always have a good understanding of the answers to virtually all the questions but guess what, I AM A RIDICULOUSLY SLOW WRITER, and because P3 requires the greatest amount of writing of all ACCA papers, I’ve had to re-write it this much :(. I really hope to nick a 50% this time around having scored 48% and 49% in the June 2010 and December 2009 diets respectively. Please pray hard for me everyone. But over all, I think this was one of the best P3 papers to be honest.It is my 5th attempt …i got 49 in my last attempt…..so ur not alone… i am not a slow writer but since i am a full time self study student I lack the appreciation of commercial reality 🙂
@cporteus said:
Look at part 4b on the June 08 paper to see the model that I think we should have used:
https://www.accaglobal.com/pubs/students/acca/exams/p3/past_papers/p3_2008_jun_a.pdfI didn’t BTW but hopefully should get some marks for having a go at least.
yes we should have but i couldnt think of it…..so i used scope and nature model …there were 2 marks for justifcation…..and i think scope ( either realignment or transformation )and nature (either incremental or big bang) tells u the context
in this case scope was realignment and the nature was incremental….which means change will be based on existing paradigm….as it was mentioned the scenario that there is nothing fundamentally wrong with the company…the strategy will be adaptation . I think i justified the model I used…lets hope examiner agrees ..lolIn contextual factor i applied the model that talks about the scope of change (realignment or transformation) and nature of change (incremental or big bang)…it is mentioned in bpp under the heading of type of change…but I thought it is safe to assume that scope and nature tells you the context of change…was I right?
In change element I explained about …..Culture , people , facilitators and blockers, senior management commitment, communication.
This article has answers to your questions.
https://www.accaglobal.com/students/student_accountant/archive/2009/99/sa_sept09_weaver.pdf
@condakisses yes
Support (comfort) Letter ;From parent to auditors:(an evidence)
( states that the intention of parent is to continue to support the subsidiary, which makes it a going concern. )communication between group auditor and component auditor
The audit risk would only arise if an inappropriate basis were used while preparing financial statements i.e if Co is not a going concern and the Financial statements are prepared on a going concern basis…. If appropriate disclosures are made and true state of the company’s affair is shown then there is no audit risk.
Correct me if I am wrong.