[omensa]

Passed alhamdulillah! 63%

Link theory was spot on for my. Could access the white and grey page since friday when i wasn’t able to do so a week before. Had all the signs in my favor. The eBusiness link was also showing support email of member@acca….

All in all, i believe the link theory is without a doubt, spot on!

So happy to be a member now!!!!

[omensa]

@scared123 said:
Q5(i)

– Materiality calculation – material.
– IFRS 15 revenue shall be recognised only when the performance obligation has satisfied. Explain to the scenario that the risk and rewards of the goods have not arrived at the customers, no revenue shall be recognised, only deferred the income until the performance obligation has been satisfied with.
– This might be the accounting policy for several years, comparative figures might also be misstated, shall discuss with those charged with governance should the adjustment being made in the opening retained earnings figures (IAS 8 retrospective adjustments for error)
– Auditors shall also obtain the contract between the company and the customers to ensure the revised terms in the contract has been signed by the customers.
-Discuss with those charged with governance the qualification of the auditor’s report and also the wordings to be included.

Some points I have included in my answer in Q5(ii) impact of the auditor’s report if no adjustments would made will be:-

– If material, but not pervasive, qualified ‘except for’ opinion.
– If material and pervasive, adverse opinion.
– Modification reasons and effect of the quantification effects to the FS in basis paragraphs
– Immediately after Opinion paragraph
– Finally, the client is a listed client, KAM paragraph shall be included as it is a requirement for all listed companies. If there is a significant matter which the auditor needs to communicate, then include the explanations in this paragraph. If no significant matters have found in the performing of the audit, shall included in the KAM paragraph stated that nothing have been found to be significant in performing the audit.

I don’t think KAM was worth mentioning here. If the issue has formed a basis for qualification, it will be discussed in Basis for Qualified Opinion para, not in KAM

Same goes for EoM. Any matter discussed in EoM does not become part of KAM

[omensa]

@ameera85 said:
What procedures did you answer for the performance indicators?

Check nurse personnel files, obtain floor plan to identify rooms, check from billing ledger the average occupancy, check patient files/case files to identify revisits within 28 days

Dont remember the rest

[omensa]

Q3 was again about professional matters and some KPIs.
Part a was about an on going audit of a hospital where the audit staff had identified expired medicines in the inventory and saw the same medicines marked in a worksheet in possession of the Finance Controller. Upon request to see the worksheet, the Finance Controller refused to show it saying that you must have mistaken something else to the list of expired medicines. The next day the staff was threatened by the Finance Director to stop investigating something that does not concern them otherwise he will remove the staff from the premises. The next day, the expired inventories were physically gone (talk about misappropriation of asset)
Part b had 2 parts, 1st one asked the difference between ‘performance audit’ and ‘audit of performance information’, whereas 2nd one asked for audit procedures required for the verification of 3 KPIs given in respect to the hospital

I didn’t attempt Q4 but as far as i remember, it required discussion upon valuation of inventories, impairment and warranty provision

[omensa]

I do believe that the paper was fair, I’ve seen tougher questions lately and this one really went relatively easy on the students.

Q1 was about audit risk in acquisition of 3 subsidiaries during the year. I find business risks harder because they relate INDIRECTLY to the financial statements and I was hoping to see business risk in this attempt, since we had risk of material misstatement in the March 2017 attempt. Anyway, the question asked about audit risk for a group which acquired 3 subsidiaries during the year.
Part a) One was Lilac and was a significant competent. Was present overseas but had same currency, so no translation risk. Adopted IFRS for the 1st time and had an internally generated brand name called ‘Green Gadgets’ valued at $10m by the management of Lilac themselves. As per IAS-38. internally generated brand names can not be capitalized but I believe from a group’s perspective, it was purchased with acquisition of the subsidiary so its fine to recognize it.
In 2nd subsidiary, shareholding was 58% but representation on Board was only 40% since the group was allowed only 2 directors out of 5. So for me, not enough voting rights, therefore this subsidiary was not to be consolidated.
Third was a Software company. The only threat I could think of was Research and Development costs the subsidiary was said to be focused on.Rest related to part c.
Part b) This part asked for audit procedures required for Brand Name in Lilac to be communicated to the component auditor
Part c) This focused on ethical and professional matters since 3rd subsidiary wanted advice on merger and acquisition planning and selecting appropriate targets. There was also a support letter given by Cactus group for the acquisition to the subsidiary and the engagement partner of the component auditor required Going Concern working papers from group auditor but honestly, i don’t believe that there was any going concern issue because the support letter was not in result of some operational or financial difficulty of the subsidiary.

Q2 was about quality control and ethical matters where we were performing a post-issuance quality control review.
Part a dealt with a scenario where test of controls were not performed at final audit and audit procedures ‘limited’ as a result, placing greater reliance on internal control. There was no record for meeting with audit committee to discuss the audit findings and the amendments were discussed orally with the Finance Director over the phone who then made the adjustments. Audit report was signed prior to receiving Chairman’s Statement for review. There was a matter discussed in Emphasis of Matter para regarding a significant contingent liability, regarding which sufficient audit evidence was present in the file. I believe the treatment was correct, wonder what we were supposed to say about this?
Part b was about ethical dilemma concerning 3 audit assistant. One sold training service to the client as all the assistants were encouraged by the audit manager to do so, with a cash reward promised in return. 2nd assistant had helped the Finance Director in designing inventory count controls with audit manager’s approval and 3rd was re-engaged in the audit of the client, despite of the fact that she had just returned from a forensic audit assignment carried at the same client and the assistant worked closely with the internal audit team for 4 months

[omensa]

Got only one question.

What IS the difference between ‘performance audit’ and ‘audit of performance information’?

[omensa]

I would pay special attention to Business Risks, Tendering and advertisement, Sustainability reporting and use of experts in the last minute. Fingers crossed

[omensa]

@hrimfaxi said:
71

OMG SERIOUSLY?!? Passed by 59% although I didn’t complete my paper and had to leave 23 marks worth of questions in the end. But so thankfull to Allah!

[Author]

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