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fidget

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Active 5 years ago
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Viewing 25 posts - 1 through 25 (of 198 total)
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  • December 5, 2019 at 4:01 pm #555155
    mysteryfidget
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    @raoul7370 said:
    In the Sep/Dec 2019 sample questions published by ACCA, both Q1 and Q2 begin with the sentence telling you today is 1 July 20X5. It is not in Q3 (but then there are no dates at all in Q3, so today’s date has no relevance to the answer).

    I imagine they have done the same for the December paper on all questions where there are dates in the story.

    Regarding intangibles, you cannot internally generate a patent – you have to buy one. You can internally generate a new product or invention (Development Costs would be capitalised as the asset), and then apply to patent your idea (which, if granted, should help protect the future revenue stream and hence the value of the development cost asset).

    I was hoping they would have published this but it looks like the sample questions for Sep/Dec are all September and no December questions at all!

    Yes, disappointing that no questions from Dec have been published. Q1 did say “Today’s date is 01 July 20X5”. It was the first sentence of the question.

    December 5, 2019 at 1:01 pm #555079
    mysteryfidget
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    @aynat said:
    Do you have any source of this information? Thanks!!

    I have a Kaplan exam kit, and it says it in the ‘paper specific information’ at the front of the book. It says the ‘current’ date will be 01/07/20×5.

    December 4, 2019 at 5:57 pm #554957
    mysteryfidget
    Member
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    @raoul7370 said:
    Is the following close to correct everyone?

    Q1

    Business risks for 10 marks
    Audit risks for 20 marks
    Audit procedures on IFRS5 and IFRS2 for 10 marks
    Reliance on internal audit for 6 marks
    Prof Marks = 4 (for Briefing notes)

    Q2

    Matters to consider, and Impact on Audit Report for 3 separate scenarios (17 marks):
    – PPE
    – Hedging
    – Legal Claim

    anyone know the marks split on the above?

    Ethics and Prof Issues for 8 marks

    Q3

    Intangible assets and the financing of those, additional info required from discussion with management = 14 marks

    Ethics and Prof Issues for 11 marks

    Q1: Yes, that was the mark allocation.

    Q2: There wasn’t a split of marks for the 3 scenarios – they were worth 12 marks with no split between them given. The audit opinion was worth 5 marks and 8 marks for the ethics part.

    Q3: The requirement for 14 marks (no split given) was:
    i. What specific questions would you ask management in relation to the intangible assets.
    ii. What additional information would you need to be available in respect of financing.

    11 marks for professional & ethical considerations.

    December 4, 2019 at 5:45 pm #554951
    mysteryfidget
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    @aynat said:
    Great! Thank you! Can you please explain about DD request. The question was ” Within DD work, Auditor must assess target company (specifically Intangible Assets) Which enquirers will you send to the Target Company”s management?”

    I wrote several sentences, every of which was beginning from ” Kindly, provide us with the following…” and then I listed:
    Licence Agreement with details,
    opening balance figures,
    calculation of amortization,
    Confirmation letter regarding alternative use of that intangible assets.

    I have never seen such requirements in Past Papers….

    Thanks in Advance!

    I struggled with this part. The requirement was what *specific questions* would you ask management in relation to the intangible assets. So it wasn’t asking what info you would need about them such agreement details etc. The intangibles were a license and a patent.

    In relation to the licenses I said ask if there’s been any previous, current or suspected breaches of the licensing agreement to assess risk of fines or loss of license.

    For the patent I said ask if they are aware of any developments in processes or emerging competition to assess risk of impairment.

    Couldn’t think of anything else. In hindsight, I think other questions would be how does management ensure that licensing conditions are being adhered to, and how does it test the patent for impairment. Too late now!

    December 3, 2019 at 6:04 pm #554742
    mysteryfidget
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    @ezehrobinson said:
    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

    No, it said they were treating it as a branch and not a subsidiary.

    The flood issue was one of the last pieces of information given in the question.

    December 3, 2019 at 6:00 pm #554741
    mysteryfidget
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    @aynat said:
    But there is yet NO announcements have been made to employee, so the criteria are not met for such provision.

    I considered this from both angles. Remember that the date was 1 July 20×5, and the year end was 30 Sept 20×5, so there was still time for the announcement which would require a provision if announcement made, or no provision if no announcement made. There was a risk that a provision would be created when it shouldn’t’ve been, or vice versa depending upon the position at 30 Sept.

    December 2, 2019 at 6:48 pm #554503
    mysteryfidget
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    @lizzyzingel said:
    Business Risks-dependence on local farmers,international trading risks,Brand power threats,legal case, Redundancy…???

    What did you make of the legal case? It was the company taking others to court. It’s usually the other way round, so it kinda threw me a bit.

    December 2, 2019 at 6:39 pm #554501
    mysteryfidget
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    @ezehrobinson said:
    I struggled too on that question.

    How about the second part on Financing?

    I thought that was easier.

    * Equity Shares: get the detail to confirm the T&Cs of them to rule out any buy-back etc
    * Loan secured on PPE: Get loan agreement to see what the conditions are and find out which assets it’s actually secured on.
    * Venture Capital: Get the agreement to gauge what risks are involved.

    That was my general gist of them.

    December 2, 2019 at 6:30 pm #554500
    mysteryfidget
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    @kbourne said:
    Yep i did. It was an audit risk but also the procedures in part c(i) related to that. Stated it was material and possibly overstated if fair value estimation not accurate

    Yes, I did too under IFRS5 reporting as a discontinued operation.

    December 2, 2019 at 6:16 pm #554494
    mysteryfidget
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    @ezehrobinson said:
    Mind sharing how you answered it?

    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.

    December 2, 2019 at 4:54 pm #554483
    mysteryfidget
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    @ezehrobinson said:
    Many thanks for this
    I wrote same thing as you.

    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.

    December 2, 2019 at 4:27 pm #554480
    mysteryfidget
    Member
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    @ezehrobinson said:
    Can anyone remember the ethics question for question 2?

    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.

    December 2, 2019 at 4:13 pm #554477
    mysteryfidget
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    @kbourne said:
    Anyone able to advise what they did with the Exhibit that was a graphical representation of preliminary analytical procedures? All I was able muster up was that the jump up in revenues and profits was abnormally large in 20X4 and that additional substantive procedures should be performed?

    Didn’t do much with it asides note that revenue and profit growth were going in opposite directions.

    March 5, 2019 at 6:52 pm #507856
    mysteryfidget
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    haha! dunno about that! Quite a few marks across the paper that I couldn’t answer.

    March 5, 2019 at 4:43 pm #507819
    mysteryfidget
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    Q1 my IHT liability was £54,800, and overall available funds left for the expansion around £213k.

    With the error corrections, the car was only allowed 8% capital allowances due to it’s CO2 emissions, the AIA claimed on the other amount was added back in full. So this gave me a total of £47,202 to be added back with £18880 of that being overlap profits for the first 3 months.

    I advised Nate to sell the shares across current year and next year so that each disposal would be fully covered by the A.E.

    In Q3, there was a subtle different for Freya making the sale of the painting, and Birta making it. For Freya, it didn’t matter – she got £34k regardless. But… Freya is a connected person to Birta, and as the painting was sold at a loss, this meant that the loss could only be relieved against any future gains from transactions with Freya. Whereas, if she had sold it to the unconnected person herself, that restriction wouldn’t’ve applied.

    Can’t remember much else.

    April 16, 2018 at 3:04 pm #447438
    mysteryfidget
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    The admin review (which will cost you £52) is not a re-marking service. It just makes sure that proper process was followed in the marking of your paper. You’ll get a breakdown of what you scored for each question and confirmation your marks were added up correctly. The only way your mark will be changed is if there was an error in adding them up… which of course means that your mark could go down as well as up in the event of that.

    ACCA does have a policy of scrutinising scripts that fail by a mark or two just to be sure that the overall mark is correct.

    It’s ultimately up to you, but I think you’d probably be wasting £52.

    October 4, 2017 at 9:10 pm #409478
    mysteryfidget
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    I shouldn’t think it matters. It’s up to you to select the paper variant when you register for your exams, so providing you can do your chosen variant in whichever country then I don’t see why it would be a problem.

    Might be best contacting ACCA directly just to clarify though.

    June 6, 2017 at 7:47 am #390769
    mysteryfidget
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    You need 50 marks in total to pass. It doesn’t matter which questions you get them from.

    June 5, 2017 at 5:15 pm #390602
    mysteryfidget
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    Q5.

    My argument was that actual contract with the buyer would have to be scrutinised to ascertain at which point the seller’s obligation had been completed under IFRS 15, and therefore revenue recorded.

    The director was saying that the obligation was fulfilled on delivery… but it seemed that the contract said that the consignment had to be inspected by the customer first, which suggested to me that the revenue had been recorded before it should have been and if so then an emphasis of matter para should go in the report if not resolved.

    June 5, 2017 at 5:09 pm #390595
    mysteryfidget
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    Q4.

    Inventories: I wrote about it being a significant risk because the calculation of it was complex, especially since WIP was involved – which is a risk in itself due to the subjective nature of the calculation. Mentioned IAS 2 and for audit evidence needing basically all documentation that went into the calculation – payroll, production schedules and I can’t remember the rest now.

    Impairment: I wrote about it being correct to have the impairment review as per IAS36 since there was the indicator that the outlets may not be worth their carrying amount anymore and the $9m impairment recognised should be apportioned in full against goodwill to start with, then the remainder to the outlets on the proportional basis of which outlets’ sales have dropped the most. I’m right about the goodwill first, but I’m not sure about the rest of it. For evidence I wrote about verifying the drop in sales by outlet and documentation on the methology of calculating the impairment.

    Warranties: I wrote about IAS37 allowing provisions for warranties for returned goods although it wasn’t particularly material to the financial statements. For evidence I think I said stuff about documentation on the basis that the provision is made and the value of actual returns to compare against the provision.

    That’s the gist of my answer at least. How did you approach it?

    June 5, 2017 at 4:39 pm #390582
    mysteryfidget
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    I screwed it up big time on Q1. Three acquisitions: 1 Jan, 1 Mar, 1 Apr. Group year end 31 July… except that for some reason I had the group year end as 30 June… so all my workings for attributable profit for group year end and materiality were all out. Had to start again when I realised it, by which time we were a good 30 mins into the exam.

    Didn’t really recover from that and it all just went downhill from there.

    I think Q5 was the lesser of the evils in this exam.

    Q4 was my other option although that turned out to be harder than it looked.

    All round complete disaster for me.

    March 7, 2016 at 9:01 pm #304236
    mysteryfidget
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    @sami1986 said:
    Also did anyone make comments in relation to ‘implied’ options in the basis for opinion as insufficient info was available for provision and cash based payment to foreign bank?

    oh I went the whole hog on those and suggested modified opinion individually but disclaimer in aggregate if unresolved by the time the audit report had to be produced.

    March 7, 2016 at 8:03 pm #304222
    mysteryfidget
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    @baljit1989 said:

    Q3
    – Didn’t have a clue for part A, literally just wrote money laundering in cash based businesses can affect revenue recognition. Probably got no marks on this.

    – Spoke about money laundering issues and that evidence would need to be obtained, if not then they need to speak with the audit committee or those charged with governance about it. If none of this was done a qualified opinion should be issued because it is not pervasive.

    – IAS 37 = provision didn’t necessarily have to be recognised providing the auditors obtain sufficient and appropriate that it shouldn’t i.e. written representations legal claim against them will not succeed. Also they should review the board minutes to see if the legal issue has been discussed. A qualified opinion should be issued if the provision evidence is not obtained.

    Q4
    – Due to time issues could only attempt part A which was Intimidation and talking about how the guy didn’t understand what auditors do and the partner should arrange a meeting to explain what they do

    Overall gutted as I could have done more but ran out of time and failed in Dec 2015, hope I pass this time but due to only attempting part A on q4 and no answer for part A on Q3, fear I have failed again.

    Money Laundering was jumping out of Q3, although I think more related to part b, than part a. Wasn’t too bad a question though.

    Q4 was, or should I say, “would’ve”, been ok but for the time pressure. There was a hellova lot of ethical and professional issues that could’ve been picked up on in each of those scenarios – especially the first one. Just not enough time to adequately address them all.

    March 7, 2016 at 7:49 pm #304217
    mysteryfidget
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    @sbeeharry said:
    I included IAS for Agricultural where they state that living animals / plants should be valued at FV. Was that ok? I also added the risk that the stores could have been classified as held for sale as they intended to sell some of them, but this is wrong since the store need refurbishment and hence not available for immediate sale. Really, I was out of ideas and has to write down anything.
    Hm, for provision for refitting, am not sure if that is a constructive obligation, and hence provision should not be created.

    I just had it down as a possible compliance risk due to keeping live animals as stock as part of the Business risks required. I passed over the idea that valuation of them might’ve been a significant risk of material misstatement because it hadn’t been judged as significant in prior years so wasn’t striking me as something that was suddenly a significant risk in the current year.

    I mentioned the held for sale thing too. The trouble with that was that the stores were purchased in the current year being audited, but no plan for them for 7 months which took that into the new financial year and it was unclear how many stores would be kept, and how many sold on. So it was hard to say what to do with differentiating between those kept, and capitalised, and those those kept as held for sale. That differentiation would help with calculating how much of a provision should be created for each of the $8m refit costs.

    March 7, 2016 at 6:23 pm #304168
    mysteryfidget
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    • ☆☆☆

    What did you come up with for the Capital Expenditure Review? Worth 8 marks that was, but I wasn’t really sure what it was asking me to do.

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