[ezh1114]

passed with 55

[ezh1114]

Yes, I don’t think IAS 41 can be applied here since it is not agricultural activity.

[ezh1114]

Q1

Biz risk:
1. Reputation risk – Volunteer parties or public sue on clinic lacked of taken care of animals
2. Risk of brand name copyright by competitors – case law
3. Compliance risk – Non-compliance of pet food supplies
4. Financial risk – Tight cash flow if intend to refit 20 units (can use ratio such as trade receivables turnover days)
5. Veteran clinic – need specialized animal doctor – risk of lack of expertise
6. Operations going concern – unusual pets harms human – license being terminated

ROMM: – do not discuss payroll as this will be part of (d)
1. Revenue recognition – wrongly recognise on day one
2. Inventory stock count – many stores (challenging to carry out stock count) – overstate/understate inventory balance
3. Inventory valuation – pets will grow up (difficult to measure) – involve judgement & subjectivity – risk of overstate/understate inventory value
4. Impairment of trade receivables – high turnover days
5. Brand name impairment – risk of impairment not carried out.

(c) and (d) not too remember what I wrote.

Q2:

(a)
(i) Deferred tax asset – need to have convincing evidence that in future will have taxable profit in order to recognise, but the fact is, making loss for so many years, after all only one year have profit, it is challenging to convince an auditor that future taxable profit is probable.

However, can also argue that management provided budget and some assumptions that future taxable profit is probable.

(ii) No time to attempt – 6 marks gone

(iii) Leasing – $150k being charged to PnL on first year, which is wrong. Need to spread over four years – matching concept. Not sure if my answer is correct.

(b) No time to attempt – 8 marks gone

(a) Revenue (I remembered this is past year question)
– IAS 11 (revenue based on % of completion, involve judgement and subjectivity)
– revenue recognition might not so straight forward, mixed of goods and services
– revenue mainly transacted in cash, risk of theft and money laundering
– management intention to manipulate sales figures, in return share price goes up, compensation bonus plan, dividend, perks etc…

(b) (i)
Risk of Fraud – management override of controls and fraudulent revenue recognition (manipulation of sales), no whistle blowing channel – financial controller asked auditor to ask her boss directly due to fear of losing job.
Money laundering – discuss about the 3 stages and apply to scenario
Need to reassess whether to continue be appointed as auditor or resigned
If level of risk not until the extent to resign, need some experienced staffs to perform more detailed full substantive test work on cash/bank and revenue.

(ii) Can’t remember what I wrote

Q4 – I feel this normal and attempt-able. Most confident on this question and answered all.

Hoping Q1 + Q2 = 25; Q3 + Q4 = 30 to 35, so I can have buffer of 5 marks; but too optimistic.

[ezh1114]

Q2 is money laundering?

It looked more to Bribery for me? That guy gift a house to the person who approved the project… isn’t this is bribery? lol…

Money laundering normally involved oversea transactions and cash payment, I did see cash payment, looked like “placement” part of money laundering but I did not encounter any oversea transactions??? But yes the fictitious supplier invoice looked like “integration” part of money laundering…so where is the “layering” stage?

Anyway, I just wanna a miracle 50%, last June 15 I only got 46%

[ezh1114]

P2 – 50
P7 – 46 :/

I’m more confident in P7 than P2. I don’t know why I fail as I’m quite confident that I would pass. This make me more confident after reviewing examiner’s answer, I wrote quite a lot of points as what examiner suggested in the model answer.

Anyway, I will try again in September. Hope the 2 new standards do not came out in this immediate September sittings, as IFRS 9 and IFRS 15 are both not easy!

[ezh1114]

Q1 (a) Hope can score at least 18%
(b) 14% questions, not confident enough but am able to apply the changes – Hopefully an 8%?
(c) I did not touch at all, I think TOWS never appear in past year before! However, I have draw a matrix, hopefully can score 1%
Professional marks: Have written a report format, used polite language – hopefully to score 2%

There goes my question 1: 29/50, but I have to be prudent, so expecting myself score 26/50

Q3 (a) I am quite confident in this question, hope can score at least 12%
(b) Wrote 7 points, not sure is 1% each point or 2% each point, let’s be prudent again, expect to get 5%

Q3: 17/25

Q4 (a) My brain totally blank, no choice wrote alot crap, I think a zero mark is rewarded
(b) Have a little idea about the thingy, hoping to score 4%

Q4: 4/25

Sum up:

Using building scenario:
(a) In best case: no prudent cases, 29 + 20 + 5 = 54%
(b) In worst case: 26 + 17 + 4 = 47/100

(OMG am I going to fail?!) I just want the magic 50%!!!

[Author]

Posts