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Audit Risk
Risk that auditor expresses and inappropriate opinion when FS are infact MM.
Audit Risk = Risk of MM + Detection RiskRisk of MM
Risk that FS are MM prior to the audit.
Risk of MM has 2 components1.Inherent Risk
2.Control Riskhttps://www.accaglobal.com/content/dam/acca/global/pdf/BScEnglishLanguage.pdf
I am not sure if its an up to date list thoughIf you are planning to go for OBU – ACCA degree programme visit this page
https://www.accaglobal.com/gb/en/help/oxford-brookes.htmlThey are going to pay for the machinery in year 0, start production in year 1, pay tax 1 year in arrears which means in year 2 and of course tax allowance is for the period you pay tax in.
It has been discussed before, here is the link
https://opentuition.com/topic/working-capital-june-2013-exam-question-1/Oh well ! I suppose we don’t know whose answer is right or wrong but ll find out in 8 weeks.
ThanksNo worries
You think that my answer was wrong about shares ? You know the correct answer ?SRP is Special Rate Pool where integral assets would have gone if they weren’t covered by AIA.
Q3 a – I only vaguely remember what I did with part a(i) so i don’t wanna say it, I ll know once I see the question paper but the chances are I did it wrong.
In (ii) I said it would have been beneficial if the father had dispose off the shares himself and then give cash proceedings to his because he met all the condition of the Entrpreneurs Relief and would have paid tax at 10%. Can someone confirm ?
Q5- I think there was no AE left for the transfer to the trust.(Could be wrong as there was no time to think)
Gift to niece was like £400 so remaining £2600 was transferred to the next transfer.@Grace – Yes there was 30% business use
@feroz – About IHT question, I did what you did and I am pretty sure we are both right
@Morag Gilles – SRP balance was NIL (Fully covered by AIA), part of the Main pool total was covered by remaining AIA and WDA of 18% was available on the balance. (me thinks)They have saving of £25,000 in their BSI Account, received £1200 in interest.
To calculate the rate of return we ll have to gross up the £1200 figure first as its a actual amount received..
So £1200×100/80 =£1,500
£1500 / £25000 = 6% (return on their investment)
If they opt for ISA’s they can keep a maximum of £5,640 in cash.
Total tax savings therefore ll be £5,640 x 6% = £338 eachCould it be that the question where you saw balancing allowance on general pool was company’s final year of trading with no AIA and WDA’s just balancing charges and allowances ?
The gross amount of personal pension contribution not only extend the basic rate but also the higher rate band.
Now that the new extended higher rate band is £170000, £6000 of the SI ll be taxed at 40% (£164000 + £6000 = £170000)
and the rest at 50%.1-You don’t pay any tax on a PET during lifetime, and if the donor lives for next 7 years after making the transfer there is no tax on death either. (Hence the name – Potentially Exempt Transfer).
2-If the donor dies within 7 years rate of 40% applies.
3-If the donor survives for atleast 3 years after making the transfer, the IHT on death is reduced by Taper Relief.(Go through the notes to see what that is)
For answer to your first question read the first reply by @aimaraljafriIts
Gain x Deemed/Actual Occupation ÷ Period of Ownership
Can you tell us of an example where cost has been usedNO – But you can enrol onto a top-up degree course and you will be able to get a Bachelors degree within one year.
(It ll cost you slightly more)Number of shares disposed off on the 10th of October = 2500
divided by
Total number of share (3000)
multiply by £17,000
this will give you the cost of 2500 shares (£14,167)
For indexed cost
£14,167 divided by £17,000 x £29,754 = £24,759Well there were rumours that F5 tutor dated Ms Ann Irons back in the day so Id say 100%.
Now you can either believe me or believe the tutor himself who mentioned this right underneath the exam tips
“Tips are only intelligent guesses.
Their only purpose is to give you suggestions for topics to concentrate on in your last few days of preparation. Do not exclude other topics from your overall preparation.”It is assumed that the calenders are carrying a conspicuous advertisement for the business. (they almost always do)
Pay attention the next time you visit some office, even the one your Doc got in his office will have some pharmaceutical company name on it.We ll wait for the tutor’s expert reply but I ll give it a go
As the customers are struggling to pay there is a chance that Murray Co might never receive payment from them. Now well aware of the fact Murray Co can still put the whole receivable figure in their balance sheet, may be Mr Murray is an optimist, may be he wants the company accounts to look good, and if they do(put the whole figure) that would be an overstatement of receivables as Murray Co is not sure if they ll ever receive payment from their financially struggling customers. (it could be that they are nearly bankrupt or they are not bothered and want to spend this money on their next trip of Paris Disneyland ).
Obviously if Murray Co overstate their receivables their irrecoverable debt ll be understated which they have to make provisions for.
Its an audit risk because its an auditor’s job to make sure the FS show a true and fair view and if receivables are overstated and allowance for bad debt understated the FS arent exactly showing true and fair view
Testing of post year end cash receipts ll be used as our Audit Procedure because most companies overstate their balances at the end of the year to show good performance, an auditor has to make sure that they performs extended post year end cash receipt checks to make sure if the the entity actually received the payment they claimed they would in their FS.
Your qualification only entitles you to 4 exemptions from FIA, you can check it here
https://portal.accaglobal.com/accrweb/faces/page/public/accreditations/enquiry/main/EnqInstitutionsTable.jspx
