[ezehrobinson]

@raoul7370 said:
If audit risk is worth 20 marks and there is no requirement to do analytical calcs, my experience as a marker is that there will be 2 materiality calcs marks (for items that you believe are audit risks). I have seen this stretch to 3 on occasion, but would always presume 2 and therefore be aiming for 9x2m risks and 18m overall.

But … and this is important … 6 reasonably explained risks at an average of 1.5 marks, plus 2 materiality calcs, is 11/20 and a pass on that part. If the procedures part of Q1 asked for tests on IFRS5 and IFRS2, then there are two of your audit risks immediately (otherwise you would not be asked for procedures on them), so if you can find another 4 audit risks welcome to Safetyville, Population = you :).

ACCA published a marking guide wherein they allotted 3 marks to each audit risk identified and explained while 1 Mark goes for each materiality (sometimes capped)

[ezehrobinson]

@syeduzairnaqvi said:
Branch could be recorded as subsidiary and consolidated

I thought the last sentence said they’re treating it like subsidiary

I didn’t see the flood issue. I believe it is because of time pressure

[ezehrobinson]

@aynat said:
IFRS 37
a provision for restructuring costs is recognised only when the entity has a constructive obligation because the main features of the detailed restructuring plan have been announced to those affected by it.

The 150 employees that would be affected have not been identified and communicated, hence no constructive obligation

[ezehrobinson]

Here’s the risk I identified

Foreign Subsidiary
Opening balance
Restructuring cost
Held for sale
Share based payment
Capitalization of construction

Which other one did you identify?

[ezehrobinson]

@Fidget said:
I struggled with the intangibles part. The requirement asked for ‘specific’ questions to ask management and there wasn’t much to glean from the info (unless I totally missed it), so I said inquire about any known or suspected breaches of the licensing regulations and for the patent – was there any new technological advances or processes that management was aware of that might affect the value of the patent.

I struggled too on that question.

How about the second part on Financing?

[ezehrobinson]

@uzair52 said:
Q3a was about the matters to query with manager about intangible assets
And part 2 what additional information needed on their financing

Mind sharing how you answered it?

[ezehrobinson]

@cjacko said:
Which Qu was this, the one asking what extra info would be needed?

Q3A

[ezehrobinson]

Please did anyone attempt question 3A?
What was your answer

[ezehrobinson]

@crazyfaisal said:
I managed to answer 90. But I am not sure whether my answer makes the marker hsppy to award me only 50 marks that’s is what i want…

My past ACCA exam trend, If i answer less than 80, My passing rate/ frequency goes up. But If I answer 80+ marks in the exam i never passed.

Surprisingly sad but true.

I think one have to strategize on passing professional level.
If one can attempt the 50 Mark and 25 Mark very well and use any remaining time to touch the last 25, the person would be guaranteed to score above 50.

In our quest our attempting all,we may produce low quality answer

[ezehrobinson]

@Fidget said:
Here’s hoping that we get points for it!

What did you write for your opinion on the audit report? I ruled out disclaimer because it wasn’t about being unable to get enough evidence, and so that left qualified or adverse because it was about the financial statements, and concluded that the opinion should be qualified except for… rather than adverse.

I arrived at same conclusion as you. I took out disclaimer because there’s no limitation of scope. Also, the misstatements are material but isolated, hence not pervasive. This leaves me with except for (qualified) opinion

[ezehrobinson]

@Fidget said:
I think that was about the discovery that the firm had done some work for the client, plus the audit senior suggesting that the firm could word the presentation of the sugary drinks issue in the annual report to say it in a positive way, and then suggesting that the tech dept could do the narrative for the annual report.

I think I took from it all that there was threats re self review, self interest, advocacy, assuming management responsibilities and a quality control issue at the firm since the audit team didn’t know about the other work.

Many thanks for this
I wrote same thing as you.

[ezehrobinson]

Can anyone remember the ethics question for question 2?

[ezehrobinson]

@lean
Yea.

Ethics and professional matters had 19marks — 8 in Q2 and 11 in Q3

[ezehrobinson]

@adolf121 Nice analysis for No. 2.

I used different approach and arrived at almost same conclusion

I considered that Pdt A and B has the highest contribution and also higher contribution per hour.

A total of 10,000 unit for these products were needed which would take 25,000 man hour, leaving us with 5,000 hrs. This would result to a contribution of $85,000. The remaining five hours can only be used to produce 1,666 of products C.

I suggested that this can be rationed to both customers,

However, under Non-financial, i considered that there Dulce’s aim is to open new market and seeing that Excelsior is new customer that operates at higher end of the market and would be marketting with a diffrent name, i opined that there order should be fulfilled.

This would mean lower contribution as the hours that would have gone to produce more A and B for BB would be loss. BB is a regular customer and the product would be sold in Ducle’s name, they can be manage as the risk of stock out will be on Ducle

What do you think

[ezehrobinson]

Hello All,

Please i want to sit for this paper in September 2019. Please does anyone have the Kaplan study text? Please share with me; ezehrobinson@gmail.com

Thanks

[ezehrobinson]

Honestly, this paper was easy.

I was just too tired after writing my fourth paper in a week

For number 1, i did well, got negative NPV ($2.2m) and $10.59 million for the real option. This would make the project cool to undertake.

For jigua, $46.1 million, i honestly don’t know what the examiner required of us. My concern was that when i summed up the apportioned marks for question 1, it was 41. I don’t know where 9marks would be allocated to.

I spent so much time in Q1 that i barely had one hour for the remaining two questions.

I practised hedging very well but lost my confidence when computing the option. I got contract size of 84 for put option, calculated a premium of $64,000 and advised that they should excercise the option. I also identified that unexpired basis was 0.05. But when i looked at the question again, i saw that cost of $2million was 95.05. This threw me off balance and i didn’t complete the calculation.

I didn’t look at the swap; a cheap question though because of time pressure.

I ran to number 3 and it was hellish absorping those information. I presumed that the initial Newimber’s WACC was arrived at by blending their asset beta; because different business have different risk. I ungeared the equity beta of the old company to the combined asset beta. Using the 60:40 weighing, i took out the asset beta of the pyonin and using this new asset beta of the demerged company, computed the Ke using CAPM and then the Wacc. I arrived at 6.5% as the wacc

I performed below my expectation in this exam.

My advise to those writing this exam is to prepare very well like i did but have good night sleep a day before the exam. Also be time conscious.

I’m considering writing P5 inlieu of this come September

[Author]

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