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- June 9, 2017 at 5:04 am #392068
Hi Joseph
I am interested in your triangulation approach and would appreciate feedback on applying it.
Say I construct my survey with age group as a question.
I link this to other variables eg pay.
I interview subjects and further link their responses to a set of variables based on their age
I mention that the theories chosen do not cater for generational factors of motivation.
I cite a modern research article etc to show how generations do affect factors of motivation.
I conclude that generation may be a factor based on the study
Even though the theories might not support this is it still not a valid conclusion?
June 9, 2017 at 4:01 am #392061Thanks @trephena
I have some additional thoughts.
I plan to use an online questionnaire and selected interviews for primary research and available journals, articles etc for secondary data.
I’ve seen in the exemplars referencing to secondary research throughout the project eg. for definitions etc. so would it be correct to assume that even mentioning generational, cultural contexts will have to be supported by research or is there room for my opinions.
I ask also because I think I’ve seen on these forums that a literature review was involved and this somewhat limits the analysis to what is mentioned there.
June 7, 2017 at 5:57 pm #391489Hello guys
I have chosen topic 6 for my RAP and I am happy with the models, company and primary data that will be involved. However coming from a country with a lack of employment and industry statistics etc:
.
1. To what extent is secondary data used in the project? Based on the research questions for this topic can I control how much importance is given to secondary data as against applying the models in the project?2. Is a comparator organisation necessary for this topic?
3. Can research from similar studies in similar organisations outside my country be used as secondary data?
Grateful for your advice
December 1, 2013 at 7:06 pm #148928It all depends on the question and how you interpret it. A reasoned approach should always be given full credit. Perhaps, there is a constructive obligation, or it has already been made clear that the company will have to face sanctions.
December 1, 2013 at 12:47 am #148730With provisions it is always about spotting the ROT.
R- Reasonably reliable estimate of the future cost (the amount of the fine)
O- present legal/constructive Obligation at the year end (no law is enacted at year end so no liability exists)
T- cash is expected to transfer out as a result of the obligationIn this case I would not recognise a provision but it may warrant disclosure.
November 30, 2013 at 2:55 am #148562I think the current examiner has indicated that he would not be testing this topic through calculations. If that’s correct then John’s explanation is sufficient for any discussion element that could come up.
November 27, 2013 at 10:30 pm #148129The question will give you hints.
CAPM is used when beta given or when given the risk free rate and the equity risk premium. this may also involve the ungearing and the regearing of betas to adjust for financial risk.
If dividends or cash flows with growth are given DVM or free cash flow model can be used.
The M&M formula is used when the other methods cannot be used and you are given information about company gearing.
May 26, 2013 at 4:14 pm #127240Some other topics that could show up:
Revenue recognition( standard expected this year)
Clutter in F.S ( see article ” Bin the clutter” by examiner)
Recent suite of standards( IFRS 10,11,12,13)
Framework( revision underway)
Convergence
Integrated reporting/ environmental & socialI would advise you to have a basic understanding of
a wide range of issues and a little extra on the ones tipped.May 26, 2013 at 1:57 am #127190Yes BIG DIFFERENCE!
Procedures are actions carried out during the audit.
Evidence is what is obtained as a result of the procedures.The article below shows you how to deal with both in the exam:
https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012b/examiningEvidence.pdf
May 23, 2013 at 4:59 pm #126922If I may add:
FS level is gathering evidence to support the figures in the financial statements as a whole considering materiality, IFRS presentation, true and fair etc. as these concepts apply to the overall FS.“Which comes first?Which is of more importance than the other?What does each focus on?”
I can’t see why you would get excited about these as I hardly see any relevance to a P7 requirement.
Concentrate on those things that will give you a pass.Hope this helps
May 23, 2013 at 4:21 pm #126907@skokst
I can only give you some pointers as this area can get highly analytical and far from what you could expect in the exam:The overall purpose of the cash flow statement is to enable users to understand and assess the company’s ability to generate cash from its activities viz. operating, investing and financing. It must be analysed together with the SFP and IS
in order to get the full picture.Tips:
Consistent pattern of greater inflows than outflows indicates strong cash position and may signal that the company can increase its dividend payments, repurchase its shares, reduce its debt or acquire another firm.
The cash flow from operating activities should always be positive and greater than zero as this indicates whether the company is generating cash from its operations and is a positive sign of future growth.
If the company consistently reports growth on its income statement, but has negative cash flow, it may be lacking the ability to translate its growth into cash and are more likely to face liquidity problems, or even default on their short term liabilities.The cash flow from investing activities indicates a firm’s ability to invest in non-current assets. If the company generates enough cash to invest continually in property, plant and equipment as well as other fixed assets this is good for future prospects.
High deficits in investment may be normal especially when it is compensated for in a high operating surplus.The cash flow from financing activities should be carefully evaluated when interpreting cash flow statements. Investors should compare current debt financing with past periods to determine if the firm has reduced its debt over the years.
Cash flow statements disclose how a firm raises capital and how it spends funds during a given period. The current standard IAS 7 is flimsy and therefore preparation and classification rules are weak and open to manipulation. This adds to the problems of interpretation.
May 23, 2013 at 3:53 pm #126897@saajidh
Great Post!
Provisions used to be a favourite way to manipulate performance and smooth income because of the flimsy principles.
The new standard IAS 37 has solved many of these problems.
As you correctly mentioned all provisions are liabilities of uncertain timing or amount subject to a 3 point criteria. Provisions for bad debts and depreciation fail the criteria and are not the type of provisions mentioned in IAS 37.
They are contra accounts or adjustments to the carrying value of assets and are dealt with in other standards like
IAS 36, IAS 39 & IAS 16.May 23, 2013 at 3:22 pm #126889Here is an example to illustrate the method in leasing:
Company A has a lease contract given below:Machine cost -$500
Life of contract and machine- 5 years
Instalments – $130
Interest- 10%IF INSTALMENT PAID IN ADVANCE:
Opening $500
Instalment ($130)
Interest $37(10%*500-130)
Closing $407
Split into:
Current – $130
Non Current(balance) -$277
Total- $407IF INSTALMENT IN ARREARS DO TWO YEARS:
Opening $500
Interest $50 (10%*500)
Instalment ($130)
Closing $420
Opening $420
Interest $42 (10%*420)
Instalment ($130)
Closing $332
Split into:
Current(balance) – $88
Non Current -$332
Total- $420May 23, 2013 at 2:56 pm #126886Revenue received not earned should be treated as a liability(deferred income) and recognised over the period in a way which
reflects how its earned eg.straight line method. For a period of 3 yrs, time value would be material so discounting would apply.May 22, 2013 at 9:15 pm #126760@lewisbush
Because its equity FV is fixed at the grant date and never changes. There isn’t really any logic behind it
just what IASB says.May 22, 2013 at 8:40 pm #126754@saaninaani
The normal journal for a provision is DR expense CR liability.
But if we have an obligation(provision) tied to an asset eg. dismantling costs then we add the provision
onto the cost of the asset and depreciate entire amount.
The logic in this is that ALL costs incurred in bringing the asset into use must be capitalised.
The liability remains the same so we end up with:
DR asset CR liabilityMay 21, 2013 at 7:20 pm #126556Depreciation is forward-looking.
It is calculated by taking the new amount of the asset ( revalued or impaired)
and dividing by its remaining useful life.
With revaluation, we make an annual transfer
of the excess depreciation caused by revaluation
from the revaluation reserve to retained earnings.
This is done over the useful life and is calculated as follows:
Revaluation surplus/ rem useful lifeMay 21, 2013 at 7:01 pm #126553Okay, to answer your specific questions:
1. IAS 16 para. 41 states that the entire revaluation
surplus may be transferred in full to retained earnings on disposal( realisation by sale)
or a portion released over the period of use (realisation by use).
So this is actually a policy choice, however most companies do the annual
transfer for PPE because they intend to use not sell it.
They still have to recognize the gain so they do this by setting
off the excess depreciation( see calc. above) through Ret. Earnings.2. Since the company cannot distribute its revaluation reserve, and it
doesn’t intend to realize the full amount by sale, it releases an amount
into Ret Earnings which it CAN distribute and at the same time complies
with the accruals principle.
Quite frankly, as the IASB allows it, this is the method EVERY company
would choose, so it’s not really an option.Hope this clears things up.
May 21, 2013 at 4:34 pm #126520To understand this you need to understand realisation.
Assets are either realised by sale or use and therefore any related gains are also realised on sale or over use.
Unrealised gains go in OCI(reserves) and realised gains go into Ret.Earnings.
By sale:
Land is revalued upwards by $1m
Gain goes into Rev. Reserve(unrealised)
Land is subsequently sold
The $1m becomes realised and is moved from reserve(unrealised gains) to retained earnings(realised gains)By use:
PPE is revalued upwards by $80m
Remaining life is 8 yrs.
Gain goes into Rev. Reserve(unrealised)
Since PPE will depreciate over 8 years,
the Rev. Reserve should decrease at the same rate.
That rate = 80/8= $10m per year.
So $10m will be released over 8 years to the Ret. Earnings
until the entire gain is realised.Note that the revaluation reserve is indeed non-distributable when we recognise a surplus but over time
every asset will be realised and so will their gains.May 21, 2013 at 3:34 pm #126510Money laundering is regulated through specific laws eg POC Act
and suspicions must be reported through the proper channels
eg to MLRO then to SOCA.
So whistleblowing is generally precluded.The USA, I think, has implemented solid whistleblower
protection that also applies to money laundering.
But generally you have to comply with ML law
and the law puts Auditors in a difficult position.May 21, 2013 at 1:30 am #126389“Tipping off” occurs where an accountant informs a client of their money laundering suspicions thereby prejudicing any subsequent investigation as the client might then try to conceal evidence or simply run away.
The reason it’s such a complex area is because of the ethical/professional dilemma it presents. Consider this situation:Suppose you spot transactions you suspect are there to hide money laundering.
The transactions might obviously be material by nature causing the FS to be wrong.
You have to inform management about this giving them a reason to justify your view.
By telling them of your suspicion you might be TIPPING THEM OFF
But if you don’t tell them, you can’t give the audit report as the FS are wrong.
If you issue a modified report, they will be the first to see it and be TIPPED OFF.
Delaying the audit might make them suspicious and TIP THEM OFF.
If you resign you have to give a reason, telling them the truth would be TIPPING OFF, lying would be unethical.
What do you do?Somehow you have to report suspicions without them knowing which might be seen as an override of confidentiality.
This is no doubt a topical issue.Hope this helps
May 19, 2013 at 2:24 pm #126097You need to know basic standard costing but
Only to the extent that you might have to comment
On variances as part of a report etc.
So far, only basic variances have come up and not
as complex as in F5.May 17, 2013 at 11:27 pm #125851Quality control reviews are done firm-wide and for each engagement.
They usually involve an independent member checking the work done by another to see whether there was adequate supervision, documentation and review of evidence and procedures and that the conclusions drawn were appropriate.A typical form of review on an ongoing audit is called a “Hot Review” where another independent partner checks work done so far on the audit file for evidence of the above aspects. It is frequently carried out on work done by an auditor whose objectivity may be compromised.
Firm-wide reviews include “Cold reviews” ie. where a set of completed audit files are checked to ensure compliance with proper procedure.
Firm reviews are also popular where another audit firm is called in to review work done on an engagement.May 16, 2013 at 3:20 pm #125673The IASB has not made it compulsory to fit in
with their principles based approach and for practical reasons.
But I guess you can argue from a rules based approach with ideas
like:
Consistency and comparability across companies and jurisdictions
Compliance/Non compliance is measurable
Stakeholders need for such info
Easier to audit etc.May 15, 2013 at 10:13 pm #125609@zhela
There are three criteria to recognise a provision:
R- Reasonably reliable estimate
O- present obligation(legal or constructive)
T- cash expected to transfer outExample:
A company spills chemicals onto arable land, causing damage that will cost $10m
to clean. There is no environmental legislation but the company has stated that it uses “green policies” on
its website.(R) There is already an estimate available in the sum of $10m.
(O) There is a constructive obligation resultant from the green policy statement (because it was public)
(T) Obviously money will flow out when the land is cleaned.Therefore the costs must be provided for as follows:
Dr Cleaning costs (I/S) $10m
Cr Provision (B/S) $10mContingencies are cash flows that are uncertain for some reason.
They are accounted for based on the probabilty of the inflows(assets) or outflows(liabilities)Probable- Provide for liability, Disclose asset
Possible- Disclose for liability, Ignore asset
Remote – Ignore both asset and liabilityQuestion:
A newspaper accuses a public figure of being a drug dealer, even though they know this is
not true. The public figure sues and both sets of lawyers agree that it is likely that
the public figure will win the case and receive damages of $1m.
The case is unlikely to be resolved before the financial statements are issued.Answer:
Newspaper will provide for $1m liability and public figure will disclose a contingent asset of $1m. - AuthorPosts