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Overall it was very tough exam the ISQM 1 I hadn’t really gone over I just talked about sufficient direction supervision and review and made points around that
Q1
22 Mark ROMM question with no financial information or comparatives – was near enough impossible to do any sort of ratio calcs or margins to add depth to the answer
A few ROMMS I rmr were profit on disposal of 18m should not have been netted off to Opex – it should be in “other income” and it was material
Legal breach probs required either a provision or contingent liability
The disposal of sub was a IFRS 5 discountinued operation as it mentioned each sub was a major line of business
Profit likely overstated if they didn’t split this out as discontinued
For Clarke the parent provided them letter of support to repay any loan they have – needs to be provision or contingent liab probs in group financials
Revenue risk – mark up of 2 % was management estimate – might not be an arms length transaction between subs
Deficiency internal control around intragroup – risk of misstatement with regards to consolidation of recievables/payables