[MichaelMans]

Okay.
I get it now. Thank you so much!

[MichaelMans]

So this means currently (as at 1 july) the payroll expense, in particular, is overstated;
but as a result of the fact that more fraud may arise after investigations, it means the other expenses are understated, so profit is also overstated, presently (as at 1 July).

I hope it makes sense.

[MichaelMans]

My doubt is about the profit: if payroll expense is overstated as a result of the fraud, then profit should decrease and therefore be understated.
But the risk says profit is overstated.

[MichaelMans]

Thank you so much for your kind response, Kim.
And, yes, I will do as advised.

I hope you do enjoy your holidays. 🙂

[MichaelMans]

Thanks also for sharing the link for the SD25 examiner’s report.

I will check it out ASAP.

[MichaelMans]

“…so a “response” has to summarise the approach…”

That’s the key point.

Thank you so much!

[MichaelMans]

Thank you, Kim.

Indeed, I have also understood that (via your lectures), the best application of the adverse and disclaimer opinions is on the GC basis.

Thanks once more.

[MichaelMans]

Yes, Kim; indeed it has no bearing on the answer to the question but I just wanted to understand the concepts fully.

Thank you so much for making the clarification. 🙂

[MichaelMans]

I guess that was where I mixed it up because I practised the purchase cycle prior to practising the sales cycle.

The example you provided is very practical.

Thanks for the clarification.

[MichaelMans]

I do understand it now. 🙂
Thanks so much for taking your time to respond.

That procedure which Kaplan says tests existence kind of confused me; but thanks for the clarification.

[MichaelMans]

Thanks for the response, Kim;

Q1:
But if the trick was around the word “additions”, why does the sample come from the “NCA register” (as stated in the question)?
Are we not testing for the purchases that relates to the PPE?

Q2:
Also, Kim, how would this be different if we’re selecting a sample from the detailed purchase listing and agree the details (e.g. description, amount and date) to the purchase invoice?

Q3:
And please, please, explain the procedure so I can understand it better, because there is a procedure under NCA-PPE in the Kaplan text which also has the word “additions” but the assertion is “existence”—which means eventhough the word “additions” is present doesn’t necessarily mean the procedure relates to transactions and events.

This is the procedure from the Kaplan text (Page 381; Chpt 10; 2025-26) which also starts with sampling additions but tests the existence assertion:

“Select a sample from the list of additions and review the description on the invoice to confirm that they relate to asset expenditure items rather than repairs and maintenance: existence”

P.S.: sorry I don’t get it yet

[MichaelMans]

Thanks for the clarification, Kim. I think I get it now.
Thanks for also sharing the examiner’s report. I’ll check it out ASAP.

[MichaelMans]

My pleasure, and thanks for the advice.
I would definitely need the good luck, as it could catapult me into the 90s, or even higher, in SBR and the rest. 🙂

P.S.: I’m proud to be here as an OpenTuition student.

[MichaelMans]

Dear, Tutor @P2-D2.

Please, kindly answer these questions regarding the proposed changes to the FR Syllabus for the Sept 25 – June 26 exams.

QUESTIONS
1. Is the introduction of IFRS 18 the only change in the new syllabus?

2. Will it have any major impact on the current course content?

3. Will the supporting OpenTuition lecture videos on the change(s) be uploaded in time ahead of the Sept 25 exams?

[MichaelMans]

Thank you so much, Lisa!
This means a lot to me.

I will do my best, by God’s grace. 🙂

[MichaelMans]

As a tutor, what advice would you give to your FM students in the final week before exams?

I know this is not related to the topic I created on M&M, but based on your response (about time mgt) to the question I initially asked about M&M, I’m asking.

[MichaelMans]

I was just worried because it could potentially be asked in the live exam
I’ve experienced that before

Thanks for simplifying it.
I do appreciate…

[MichaelMans]

This would do.
Thank you. 🙂

[MichaelMans]

Okay. 🙂
Thank you, Lisa.

[MichaelMans]

Wow!
I’m only realising that now.

Lastly, Lisa: does this mean we should expect more than 15 questions in SEC A, for FM, in the live exam?
Please excuse my ignorance. As you’ve already said, “Section A consists of 15 short questions.” I don’t want any surprises regarding the exam structure, and additional marks (over 100) mean additional questions to me.

[MichaelMans]

That’s an invaluable piece of advice.
Thanks a lot, Lisa.
The concept is fully understood. 🙂

[MichaelMans]

Ok, Lisa.
Thank you.

But just for certainty: If the forward rate is quoted at a premium, the SECOND currency is quoted against that appreciates?

Example 1:
Spot $/£ 1.5326 – 1.5385
3m forward 0.62 – 0.51 c pm
Here, the pounds (£) appreciates

Example 2:
Spot $/€ 1.5326 – 1.5385
3m forward 0.62 – 0.51 c pm
Here, the euro (€) appreciates.

[MichaelMans]

Please also note that the £ is assumed to be the LOCAL currency throughout.

[MichaelMans]

Thank you.
I’ve got it now.

[MichaelMans]

Oh!
Sorry for the misinterpretation of the question.

And the interest yield is 8.7% (8/92)
So 9.5% > 8.7%

Thanks.

[Author]

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