[kpmgkpmg]

Also, what did you say in Q1 (c), (d)?
How did you assess proposed measures in (b). Did you say what would be better?
I said financial gearing is good, as they don’t want to have high debt and than that another value (was it net profit?) should be replaced with roe to motivate innovation and rd.
For customer I said it should be market share and customer satisfaction with quality as brand awareness does not evaluate brand strength(CSF)

For internal I got lost. I said GPM is bad kpi. It should better connect customer perspective and learning. So I said time to marketing new product was good KPI and % of returns or % of rejects should be used.

For (c) I was trying to make some sense from those measures and recalculate as % of revenue from new products to total revenue. Not sure… which KPI did you select for this perspective ? It was stated max 2.

[kpmgkpmg]

Hey guys!
What did you answer in Q4?
For B I said that option two is better as shareholders are risk taker (I said option 3 first, but since profit is the almost the same but option 2 provides only one loss generating demand, it’s better to take it). -6m?
For C I just calculated expected value of net profit based on probabilities. What was the selling price and sales volume for? I really didn’t use them. -6m?
For A I put some general comments of how government regulations / ecological and social factors will influence demand / supply of ingredients. And that predicting and analyzing it will reduce level of uncertainty. What else to add there? -10m?

What were the marks allocation? I think I’m missing smth 🙂

[kpmgkpmg]

Business risks I mentioned:
– political risk
– restrictions to beaches => not following their strategy
– new locations might not be investigated properly -> might end up in the same way
– management is incompetent in choosing locations
– extra costs are required, that will be borrowed and will add up to gearing. Potential breach of covenants => financing problems
– reputation loss due to regulations
– also stated smth about hurricane, which migh lead to loos of clients and extra expenses required.

[kpmgkpmg]

BTW, did you write in Q1.c. that auditor must report to authorities? I only wrote modified report…

[kpmgkpmg]

@spud said:

Q4- I can barely remember
Part B was a listed co that requested we help them with a due diligence review on one of their material group subsidiaries, but I said as it was a PLC we can’t offer audit and non audit services if they are materials.

wasn’t it question 3b? 🙂

Q1.c. (Claim) I wrote smth from standard, like result of past event, probable, measurable, so must be recognized now. If not => qualified report. But ppl above were writing smth about NOCLAR. I don;t know whats that 😀 I used old book, probably smth new and hopefully I can fit with my answer with it…

[kpmgkpmg]

Questions as I remember:

Q1. a. business risk – 10m; romm – 10m
b. group audit planning – 5/6m
c. further procedures for claim – 5/6m

Q.2 – Matters to consider and expected audit evidence on the following:
a. Provision for decommissioning costs (change of implicit rate used from 6% to 8%) – ?m
b. Smth with change in depreciation policy and revue of useful life of assets and retrospective adjustment – ?m
c. There was smth on recievebles, ratio on rec days and alloawance. – ?m

Q3. a. – Why due dilligence performed was not enough and further actions
i. loss of customer that presents 5% of revenue – 6m
ii. smth with land that was granted by government and there were restrictions on usage / ownership (don’t really remember, didn’t get to this one) – 6m
b. smth that parent for which we perform group audit asked to perform advisory services for its sub (significant component) to advise on purchase price of another company – 8m

Q4. – what were the scenarios?

Q5 – part b – audit report (didn’t choose to answer)

Can you please remind me what was in q4? And what you answered shortly on the questions.

Thank you!

[kpmgkpmg]

Write to acca survey about factoring 🙂

[kpmgkpmg]

For q3, I completely agree…

Also didn’t like it.
for a) I said that it should be discontinued operation, as it was closure of the major line of the business. I said that roylties should be recognised as other income in the preiod they relate to.
I don’t remeber what was there with licensing… For other consideration I also don’t remember what I wrote. Anyone knows the answer? 🙂

for b) I said that considertion = FV of licence (given in the question) + legal cost (600k-100k which relate to previous year). I think i said diff bw Consideration and NCI should go to PL, which is incorrect (should go to OCE). Not sure how strict they will be about it…

c) DTA … this was a difficult one for me… I wrote that it can be recognized only up to 70% of taxable difference (3*tax rate*70%). The rest should not be recognized, as there are expected future losses in the following 4 years.

Any other ideas on these 3?

[kpmgkpmg]

I think it’s not about that they can’t because it’s in foreign currency.

The company should adopt cost model or revaluation for PPE. If revaluation, than PPE should be revalued every reporting period. => translated at ex.rate at the date of revaluation.

If cost model => ex.rate at the date of acquisition. + impairment indicators. I would probably translate it at the new rate if it was impaired(but not sure about it). As it was not revalued, I said that ex.rate at transaction date.

[kpmgkpmg]

I took the question that its FV was recalculated due to some impairment indicators. So, assumed that it was cost model, not revaluation model. So it shouldn’t be revalued. I slightly stated that in the question…

I also was thinking about hedge, but in the end didn’t write anything about it. Decided it’s too much for 6 points 🙂

So, interest on loan (charge for the year) should be calculated on average exchange rate? With interest to be paid recalculated at year end ex.rate and with difference to PL?

[kpmgkpmg]

Btw, translation of loan and retail. (Q2b)
Charge to PL of fixed interest should be based on average exchange rate, right?
Retail division I wrote that since it is valued at carrying value, should be at exchange rate at purchase date.

[kpmgkpmg]

I wrote that flood is a non-adjusting event for the warehouse that was damaged by flood.
But for other warehouses I wrote that it discovered conditions at the reporting date and hence FS should be adjusted.
For insurance I was also not sure. I think I also wrote that it cannot be recognized as asset as it is not probable that benefits will flow. But not sure about it…

[kpmgkpmg]

How did you dispose associate?
And anyone knows what was there with bonds?

[kpmgkpmg]

Hi, Instan pool is closed for comments. Maybe we can discuss here.

Can you please tell me what were your treatments for the questions? I found it pretty difficult.
In q1 -35
forgot to make investment revaluation to FV and to include it in RE for acquisition of control.
How did you transfer associate? Did you transfer on CV and then revalued or did you revalue first?

How did you treat bonds? Got completely confused there…

Q1 (b) – factoring… (9p). Really? Not a single word about it in my book….
Q2 (c) – depends on q2(b), obviously not that good. Unless they will enjoy my general comments….

[Author]

Posts