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I made a stupid mistake commenting on the ratios without reading what business Kangaroo were involved with and wasted about 20 minutes before realising the slow and possibly obsolete inventory was in fact houses. I thought it was the easiest F8 paper I have sat….fourth time lucky.
Thanks for the reply Mike, I was hoping that I wouldn’t have to wait until the spring.
I did sit the English variant and do not doubt that you are correct and your opinion will be matched by that of David Kelly while I resit the paper in June.
“Lord Parker CJ commented that it did not make “business sense” for advertisements to be offers, as the person making the advertisement may find himself in a situation where he would be contractually obliged to sell more goods than he actually owned.” As a general view of adverts I fail to see why it’s not relevant.
Ali is a dealer in Persian rugs which would suggest he has more than one, I know slightly less about Persian rugs than the law and an advert for a rug in a rug shop is vague. The other question I have not read but, an advert for a car would be for a specific car which can be easily distinguished from another by make and model and although I would have answered that question equally as wrong then my failing the exam is justified. I am curious why Ed would counter with a higher offer when he is the first to accept Ali’s original offer.
When sitting the exam I was deserted by common sense that an advert could actually be an offer and perhaps took a too literal view of your lectures that adverts as a rule were invitations except in certain circumstances like Carlill or for rewards.
A Happy New Year to you and yours and to all the contributors at Open Tuition.Hi Mike, sorry to quote Wiki again.
“Generally, advertisements are invitations to treat, so the person advertising is not compelled to sell to every customer. In Partridge v Crittenden [1968] 1 WLR 1204, it was held that where the appellant advertised to sell wild birds, was not offering to sell them. Lord Parker CJ commented that it did not make “business sense” for advertisements to be offers, as the person making the advertisement may find himself in a situation where he would be contractually obliged to sell more goods than he actually owned. In certain circumstances however, an advertisement can be an offer, a well known example being the case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256, where it was held that the defendants, who advertised that they would pay anyone who used their product in the prescribed manner and caught influenza £100 and said that they had deposited £1,000 in the bank to show their good faith, has made an offer to the whole world and were contractually obliged to pay £100 to whoever accepted it by performing the requested acts.”
I would argue the advert was a lure to attract customers to the shop and as the advert doesn’t describe a particular rug then the rugs on display would be invitations as per Boots case.@mikelittle
Question 8? If the advert had been, “Handmade antique Persian rug – £1500!” How would the reality of the invitation be any different to the offer?
The first person to offer/agree £1500 cash would have bought the rug, if someone made a lower offer Ali would have been free to accept or reject it. To distinguish it as an offer the only difference I can see is that if someone agreed to pay £1500 and Ali refused which defeats the purpose of the advert.
It then begs another question:
If I offered £1400 for the rug and it was rejected would I then be able to accept his offer and pay the £1500?
And finally, if an item is on display in a shop with a sign, “Special offer today!” Would that be an invitation to treat or an offer?I have just reread the paper and think it wasn’t as bad as I thought yesterday so maybe third time lucky. I will head to Stonehenge for the Winter Solstice and prepare a Pagan sacrifice and hopefully the gods will shine on me.
Sorry Mike, I was not trying to open up a legal dispute relating to a particular case or the rights and wrongs of the legal decisions made, nor was I questioning the ethics and competence of accountants in general. Having reread your answer it is appreciated and more than acceptable and my reservations relating to the audit report are in the overwhelming majority cases unfair.
Thanks again.Thank you for your reply.
I was thinking of Caparo v Dickman, Caparo Industries plc being the individual shareholder.
Quoting from Smith and Keenan, “Auditors do not owe a duty of care to potential investors even if they already hold shares in the company since, although they are shareholders and the auditors are under a statutory duty to report to shareholders, the duty of the auditor is to the shareholders as a whole and not to shareholders as individuals.”
Ultramares Corporation v. Touche is a US case if Wikipedia is to be believed and if that makes a difference. As a student with limited knowledge of their Lordship’s greater knowledge and experiences I fail to see their argument. The cost of the general public bringing a claim for negligence against an auditor for an incorrect opinion in comparison to the losses Joe Public has suffered would restrict the number of claimants to those who have suffered substantial losses. On that basis the indeterminate number would be very few, the amount finite to the losses suffered and the period would be from the initial investment until the actions of the investors had time to affect the company.
By including a disclaimer in the audit opinion, the auditor is saying the FS show a true and fair view but don’t take our word for it because there may be a fraud or error that we have missed and the company accounts may be completely false and meaningless. Hence my original statement of not being worth the paper they are written on.
I have read the ACCA’s code of ethics and the majority of accountants show great skill, care and diligence and no doubt most audits are performed with due care and professional scepticism but how are the users of financial statements to know the difference between a competent audit report and a negligent report?
If the FS are a deliberate work of fraud created by the directors then they should be personally liable for the losses of the investors but if there are genuine errors which have escaped the attention of the auditor who has then given an incorrect opinion they should be accountable.
Harm must be reasonably foreseeable as a result of the defendant’s conduct.
Would an incorrect opinion cause harm?
The parties must be in a relationship of proximity.
For an individual to invest in a company based on the audited FS, then the duty of care is owed to investors thus creating a relationship.
It must be fair, just and reasonable to impose liability.
Speaks for itself.I have law and audit exams in the next two weeks, which is why I am looking too deeply into this question.
Thanks again.
Count me out of the genius hunt, but it says pass on the form. Many thanks Open Tuition for your many resources and lectures.
Thank you Opentuition and good luck to everyone receiving their results today. No genius but a pass.
Good luck to all that suffered. I think I managed 45-55%, it’s going to be a long wait for results. It has made me feel better reading the comments from fellow strugglers, I do find it amazing that someone who cannot type English can feel confident in their performance.
The VAT payment part of Q1 was 2/3 marks so limited thought required. The business rates I have treated the same as Council Tax and included it as an allowable expense and deducted from the rent received to calculate wear and tear allowance.
A tough but fair paper, there were enough marks available for basic questions for an average student to pass and for those of us who have not done the work, we will get what we deserve…a second go in Decemeber.