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Hello Sir

the question is from the BPP F4 Global revision kit for exams from 1 Sep 2017 to 31 Aug 2018. Question number is 4.7.

[mini]

thank very much for your very helpful answer 🙂

[mini]

Thank you very much for your prompt reply. I guess i should pay attention on the chapter 6 from OT Notes 🙂

[mini]

Hi,

I just saw on https://www.accaexamtips.net tips form LSBF:

Selection of KPIs.
Technology & performance management.
Budgeting impact.
Building block model.
Divisional issues & selection of KPI.

Does anyone has BPP or Kaplan exam tips to share?

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Hi Mike,

There were examples of matters that may be KAM

e.g. impairment testing on goodwill – if i understand well, impairment tests are complex and judgmental and therefore may be KAM

Could you please tell me why the matters listed below may be KAM?

Significant operational loses
Debt refinancing
Non – compliance with loan agreement

Many thanks

[mini]

Dear Tutor,

Thank you for your explanation. It is much appreciated.

In addition could you please tell me, in case that we have KAM and EOM paragraph what would be the order of those paragraphs in the auditor’s report?

Opinion
Basis of opinion
Material uncertainties related to going concern
KAM
EOM

or

Opinion
Basis of opinion
Material uncertainties related to going concern
EOM
KAM

[mini]

Thank you very much 🙂

[mini]

thank you 🙂

[mini]

please send to me: marjanovicmira85@gmail.com

[mini]

HI Mike,

I took it from the technical article, please see the last sentence:

REPORTING IN LINE WITH ISA 570, GOING CONCERN
Exam questions might ask the candidate to recognise indicators that an entity may not be a going concern, or require candidates to arrive at an appropriate audit opinion depending on the circumstances presented in the scenario. It may be the case that candidates are presented with a situation where the auditor has concluded that there are material uncertainties relating to going concern and the directors have made appropriate disclosures in relation to going concern and candidates must understand the new auditor reporting requirements in this respect.

The auditor’s work in relation to going concern has been enhanced in ISA 570 (Revised), Going Concern and the revised ISA includes additional guidance relating to the appropriateness of disclosures when a material uncertainty exists. Under the previous version of ISA 570, if the auditor concluded that the going concern basis of accounting is appropriate, but a material uncertainty exists and this material uncertainty had been adequately disclosed in the financial statements, the auditor would include an Emphasis of Matter paragraph immediately after the Opinion paragraph which would be cross-referenced to the relevant disclosure note in the financial statements. The auditor would also emphasise that their opinion is not modified in respect of the material uncertainty. This requirement has changed in the revised ISA 570 and the use of an Emphasis of Matter paragraph is no longer appropriate.

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Please ignore my question, I have just seen that you have already answer it 🙂

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Thank you Mike 🙂

I read that is highly important to have updated study materials due to changes in ISA and therefore i bought the exam kit applicable from September 2016 although i have already had one that was applicable before September 2016 🙁

in addition, in the technical article the new auditor’s report is stated “…in the revised ISA 570 and the use of an Emphasis of Matter paragraph is no longer appropriate. ”

Does it mean that although we think that there should be Emphasis of Matter paragraph we don’t write it in our answer because it is no longer appropriate and we use KAM instead?

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Please send me to me too: marjanovicmira85@gmail.com

Thanks

[mini]

many thanks

[mini]

Thank you very much for taking the time to share your approach 🙂

[mini]

Many thanks Kakataj 🙂

[mini]

Many thanks, the solution seems more understandable now 🙂

[mini]

Thank you for your reply.

The information above is copied from the question 46 ” The Ace Bicycle Company” from BPP revision kit, and according to the solution the BCG approach is useful for approaching this question.

However, i am totally confused with the solution and not sure how to link the information from the income statement to BCG matrix.

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In regard to my question above, could you please explain how we can determine if the product is problematic child, star, cash cow or dog based on the information from income statements below?

year 1 year 2 year 3 % in total
Volume
product 1 18,000.00 17,500.00 16,500.00 29% 8%
product 2 27,000.00 26,200.00 25,000.00 45% 7%
product 3 11,000.00 11,500.00 11,750.00 21% -7%
product 4 2,800.00 2,800.00 2,700.00 5% 4%
Total 58,800.00 58,000.00 55,950.00

Direct cost
product 1 2,070.00 2,187.00 2,145.00 20% -4%
product 2 2,160.00 2,096.00 2,075.00 19% 4%
product 3 4,950.00 5,750.00 6,227.00 57% -26%
product 4 756.00 840.00 837.00 8% -11%
Total 9,936.00 10,873.00 11,284.00

Revenue
product 1 2,610.00 2,625.00 2,475.00 18% 5%
product 2 2,430.00 2,227.00 2,125.00 16% 13%
product 3 6,875.00 7,475.00 7,931.00 59% -15%
product 4 910.00 980.00 945.00 7% -4%
12,825.00 13,307.00 13,476.00

indirect cost
Distribution 175.00 200.00 250.00 17% -43%
Promotion 300.00 280.00 240.00 16% 20%
Amin cost 750.00 850.00 1,000.00 67%-33%
1,225.00 1,330.00 1,490.00 -22%

[mini]

Thank you so much for your reply Dan :). You give me hope that it is possible. Currently i am stuck with P1 and still cannot start with preparation of P3, sometimes my head hurts when i read the answers in a revision kit due to difficult words that they use there 🙁

[mini]

many thanks for your very useful explanations 🙂

[mini]

Hey Gromit,

Thank you so much for your prompt reply and your explanation.

The terminology is taken from the acca wesite, section “past exam papers” and then pdf file: Answers.

just to confirm if i understood you well: The purchases day book is just a list of invoices receive and it does not mean that these invoices are recorded. Once they are in the payables ledger, means that they are recorded.

what is the difference between the payables ledger control account and nominal ledger accounts.

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Thank you so much 🙂

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Hi Sir,

If I understood well your explanation above, I should look at the date of the improvements cost and if the improvements cost was before the employee moved in, the OMV has already accounted for the earlier improvements cost.

Could you please explain why improvements cost of 14,000 in the example below is added to the purchase price of the property, since the improvement cost occurred before the employee moved in?

Vigorous plc has provided Andrea with living accommodation since 1 November 2011. The property was purchased on 1 January 2009 for 130,000. The company spent 14,000 improving the property during March 2010, and a further 8,000 was spent on improvements cost during May 2013.

The value of property on 1 November 2011 was 170,000 and it has annual value of 7,000.

Solution: ((130,000 + 14,000) – 75,000) * 4%

[mini]

Many thanks for your quick and helpful response :). It is much appreciated!

[Author]

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