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Has anyone got BPP SBL notes, I have the textbook and revision kit, but I’m sure there must be some notes to summarise the texbook. If anyone knows of someone with the notes, please please let me know, happy to Purchase them.
Hello,
From memory this is what I remember about the whole paper:
3 scenarios, 5 MCQs per scenario – not in any particular order and I am also paraphrasing:– $45,000 material misstatement was the level, if there were $30,000 more what should be done?
– Question reference ACCA’s code of Ethics and Conducts, which is NOT one of them?
– Calculation of wages question from all the increase, temporary staff and bonuses?
– Question reference marketing costs, I believe it had reached $300,000 but it was also pre-paid for a certain period?
– Question reference wages accrual (cannot remember anymore).
– Director of a company joining the Audit of the same firm?
– First year’s fees had already amounted to 15%, next year should not also amount to 15%, I thought rotation occured after 7 years and not 5 (may be wrong).
– Audit of two companies who are competitors?
– Payable days, I put 41 days but probably the wrong option.Written questions (16, 17 & 18)
16 was for 30 marks, 17 and 18 were for 20 marks.
Q16 – 8 Audit risks and responses to these risks.
Q17 – 8 Seven deficifiencies, identify, explain and provide recommendations (this was to do with the Sales and Despatch System)
Q18 – Cannot really remember to be honest.Let’s smash this exam guys!
Any questions, please feel free to ask we all need to help each other ‘one love’!
I am not going to attempt the whole question for you, but I can go into a bit of discussion and this discussion can be backed up by calculations:
1. First of all, it can be seen that Kata is an Associate, as it has a holding of 45%, between 20-50% is considered as an Associate and the company (Bolo) is expected to exert significant influence over the Associate.
The percentage is not effectively a “be all and end all” even if less than the percentage bracket given but it can be established from the scenario that significant influence can be exerted it can be classified as an Associate.
IMPACT OF ASSOCIATE ON SOFP:
1. If Associate you first of all do not consolidate, as you do not CONTROL.
2. All you do is take a percentage (i.e. 45% of their Profits), which you need to do a working for, known as Investment in Associate.
3. Inter company trading will be allowed, no need to deduct intra-group balances.
4. No line in SOFP for NCI, as CONTROL is not acquired/gained.
5. No Goodwill in Non-Current Assets.The IMPACT OF SUB ON SOFP:
All the points that I have mentioned for Associate above, for the SUB they are the exact opposite, for example for Associate no consolidation, for Sub you have to consolidate etc etc.
This is how I would most probably attempt this question, backed up perfectly with calculations showing/comparing the differences between the two different accounting treatments.
Hope this helps.
Here are examples,
Substantive procedures dealing with testing transactions can include the following:
1. Examining documentation indicating that a procedure was performed
2. Making inquiries or actually observing a transactionExamples of such substantive procedures are:
Bank confirmation
Observe a physical inventory count
Examine accounts payable supporting documentsThere are examples of assurance services, but you have to first understand and possibly comprehend what do we mean by assurance?
Assurance basically describes the process whereby one party is trying to give some level of comfort to another party about a subject matter.
For example, an external audit is an example of an assurance engagement, this is where the external auditors audit the financial statements to provide some comfort/confidence to the shareholders that financial statements are basically OK.
The correct term would that auditors provide reasonable assurance to the shareholders that the financial statements are presented faithfully. When we say faithfully presented, it means:
Factual
Free from bias
Represents actual transactions that have taken place in the businessThe assurance engagement always has the following five elements:
1. Has to involve a subject matter
2. Has to have a criteria to test or adhere against
3. Needs to be prepared by someone (Responsible Party)
4. Needs to have an intended use (Users)
5. Where an expert expresses an conclusion (Practitioner)When an external auditor provides reasonable assurance on the financial statements, it means that a high level of assurance can be placed on the financial statements being materially misstated or not.
Auditors will never use the term guarantee or provide a 100% opinion, because if you think about it in reality this would be completed unrealistic, why?
1. Auditors do not have the time to test every single transaction that takes place
2. Auditors when conducting their audit use a lot of judgement.
3. The samples chosen to test could be incorrect or not appropriate.There are many reasons as to why a 100% guarantee can not be placed, hence why the term REASONABLE ASSURANCE is used – which says YES or NO that the financial statements have or have not been materially misstated.
External auditors are purely concerned with providing an opinion on the financial statements produced by the management of the company.
The purpose of an external audit being to report back to the shareholders (i.e. the owners) whether or not in their opinion the financial statements have been presented faithfully.
An external audit is a statutory requirement for incorporated entities, smaller entities are exempt from such.
In contrast, internal auditors do an internal audit for the company, an internal auditor can also be an employee of the company, but their duties are vast and wide ranging. There main objective is to consider a company’s risk management, governance and internal control processes are operating effectively.
There is no requirement for a company to have an internal audit function, but many listed companies in general do have one, and where you do no have one companies should annually review whether or not they should have one.
Hope this answers your question adequately. If you have any more questions, please do not hesitate to ask. Thank you.
The other instances where it can be classified as a qualifying loan interest:
Interest paid gross on any of the following types of loans qualify and thereby can be deducted from Total Income
1. Loan to buy plan and machinery for use in partnership
2. Loan to invest in a partnership
3. Loan to buy interest in an employee controlled company
4. Loan to invest in a co-operativeHere is the answer to your question you have written in your post, try and draw a timeline, it will really help.
First year of commencement of trade ALWAYS use ACTUAL BASIS (i.e. from date of commencement which in this case is 1st January 2012 to the end of the Tax Year which is in this case 5th April 2012.
First Tax Year (2011/2012) – it will be 3 months divided by 9 months multiplied by the amount of profit made in that period. This amount will be the trade profits assessed for the tax year 2011/2012.
I’ve used 3 months because there are 3 months from the date of commencement which is January till the end of the tax year April (ignore the first week for April). I’ve used 9 months as that’s how long the accounting period is (1st Jan 2012 – 30th Sept 2012)
I am not a tutor, but this is the answer to your question:
This is all you need to know for the exam, in an Income Tax Question, which will be the first question in ACCA F6 UK Taxation paper, it will involve either a trader or a normal individual.
They will say he/she has received dividends of a certain amount, and this amount will also be the NET amount, what you need to do is GROSS it up, you gross it up by simply multiplying the NET amount of dividends received by the individual (given to you) and times it by 100/90 and this will give you the gross amount, and you put this figure under the heading of Dividend Income (the three headings for INCOME TAX is Non-savings Income, Savings Income and Dividend Income).
Example,
Hamish received dividends of £4,500 from HSBC plc.
(This amount is NET amount, you multiply the £4,500 by 100/90 and you get £5,000 which is the gross amount and the amount you include to calculate your total income tax liability).
I am not a tutor, but I can help –
Class 2 NIC applies to self-employed individuals, for which they have to pay £2.70 per week of trading. For example, if they trade for 12 months, what you would do is see how many weeks in a year (I believe a calculation based on 48 – 54 weeks is acceptable) and then times £2.70 by the number of weeks they have traded.
Example, John is self-employed and he has traded for 49 weeks for the tax year 2013/2014, what is his Class 2 NIC for 2013/2014?
It will just simply be £2.70*48 weeks = £129.60
Hope this helps.
I strongly believe you should learn this chapter, as all it includes is dates, which you might get a very easy ONE mark for.
For example, they may ask you calculate someone’s income tax and ask when it is due, or corporation tax and when it is due, or capital gains tax and when it is due. This is typical of the examiner in most questions.
Here are the dates, please take note:
CAPITAL GAINS TAX – 31st Jan after the end of the tax year to which the capital gain relates.
CORPORATION TAX – 9 months and 1 day after the end of accounting period.
INHERITANCE TAX – 6 months after death or 30th April, whichever is later
VAT – Quarterly (monthly or yearly)
INCOME TAX – Consider for the tax year 2013/2014
First payment is due on 31st January during the year of assessment, which is the first payment on account, second payment is due on 31st July after the year of assessment which is the second payment on account and the final balancing payment is on the 31st January after the year of assessment.
Here are the rules:
OPENING YEAR RULES:
These rules apply to when an individual commences trading
1. First Tax Year – use the ACTUAL BASIS, what this means is that you tax trade profits from the date of when he commenced business to the end of the tax year i.e 5th April.
FOR EXAMPLE
XYZ commenced trading on 1st January 2012, and draw up his first set of accounts to June 2012 and made profits of £50,000. Over here, you would only tax profits from Jan till end of March (i.e 3 out the 6 months)2. Second Tax Year – you ask yourself the following set of questions
(Does an accounting period end in the 2nd tax year? By the way, an accounting period is the dates from which the individual makes his accounts to.)If the answer to the question is YES, you then look at whether the accounting period is:
– Less than 12 months (TAX PROFITS OF FIRST 12 MONTHS OF TRADE)
– 12 Months Exact (CURRENT YEAR – INCLUDE THE WHOLE AMOUNT)
– More than 12 months (TAX PROFITS TO 12 MONTHS OF ACCOUNTING PERIOD)If the answer is NO, you then tax profits for that period from April 6th to April 5th (i.e. 12 months)
CLOSING YEAR RULES:
These rules relate to when an individual ceases to trade.
Penultimate Tax Year (second to last tax year), use CURRENT YEAR BASIS, i.e. include all profits of the accounting period to which the tax year relates.
Final Tax Year – Tax any remaining profits which have not been taxed and also deduct at this point your overlap profits. This is the only time you can get a deduction for your overlap profits, when you cease trading.
TOP TIP: Use timelines for these types of questions, it makes plotting all years easier and easier to handle and calculate.
Narrow the exam down to just key topics and focus on what you need to just get those potential 50 marks!
By narrowing down the topics to as little as possible, you may actually want to try and learn a few topics knowing that there around 6/7 guaranteed topics to come up, and learning just 6/7 topics properly isn’t that much – hope that helps!
Nobody can make you focus, except yourself, spend 30 mins at a time with a 10 min break.
Hello,
What you have to remember is that a tax year, also known as a ‘fiscal year’ runs from the 6th April – 5th April.
Where as an accounting period is what the company has its accounts written from, this could be 6 months, 12 months or even 18 months.
What you need to do for these types of questions is understand the rules that apply and the scenario given (ie if a company has been trading for many years or whether it has just started – that will then allow you to determine what rule to use.
This can be confusing with all the dates etc, but personal the easiest and the clearest way to comprehend this type of question is to draw a timeline, which will minimise confusion.
In my next post, I will help you identify how to determine what rule to use and when. Hope this helps partly !