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They are also points to enter, anything that can be consider a matter to consider for that area is markable. I had covered this heavily with my lecturer who advised that this way was how the examiner liked to see it answered (and he is one of the markers of the paper) so I’m pretty happy with that approach! But any matters relevant should get points no doubt
Best of luck to all on the results ?
For matters I put down materiality, was it material etc! Then the accounting standards to be adhered to for that area and what they have to do. Also if there was a risk of material misstatement.
I used the same 3 of those for all 3 parts of the Q for the matters to be considered and tried to add one or 2 more where I could to get as many marks as possible ?With regard to question 2 and 4 where there were matters to consider, how detrimental is not stating Materiality as one of the factors to consider. I totally forgot to put that. And about the evidence that you expect to find for the file review, I simply put the evidence but not the audit work on that evidence. Would that be detrimental too?
I think if you can state other matters other than materiality you would still pick up the marks as long as they’re valid matters.
For evidence I did the same, stayed pieces of evidence but not the audit work as procedure was not asked, only evidence! Hopefully that’s right! ?Re 10 million claim in q1, I said something like:
Analyse documents pertaining to the claim.
Confirm 10million is accurate estimate.
Discuss with management their reasoning for not including in financial statements.
Confirm details with Ocean protect company to confirm accuracy.
Discuss with mgmt ‘re potential need for expert valuation.
Confirm plans to ensure no further claims will be made against co.
If mgmt refuse to amend Financial statements, advise them of the implications to the audit report.I also found this exam very difficult in time.
Q3 – I advised for 1 that there was risk of reputational damage, cheaper competitors to consider for acquisition, drop in revenues ans possibly most customer may be lost. Material customer lost etcQ4- I can barely remember
Part B was a listed co that requested we help them with a due diligence review on one of their material group subsidiaries, but I said as it was a PLC we can’t offer audit and non audit services if they are materials.
Part C- we had audit partner that needed rotation was had been partner for the client for 7 years, audit client said he would put audit out to tender if we changed audit partner as he was only staying with the auditors due to close relationship.
I said not possible , partner rotation necessary and if intimidation threat so may lose client but may have stepped down from audit anyway if relationship soured and threats in place , too big to safeguard.I did Q2 second, not too bad I think, then Q1 which half way through i realised i was 15 mins over time on….so had to totally squeeze Q4 cause had only 20 mins left ?
What were the implications to be assessed from the Ocean protection case against the co in Question 1?
Was it just that the integrity of co was in Question and that kinda thing….or how did people answer this part?Hope I did enough to pass, preferred the paper to the June one which I got 41% in so fingers crossed!!! ??
For matters i said the materiality of the items, their accounting standards being handled correctly as per IAS 2 etc and the risk of them being materially misstated.
For the evidence, that there should be a Q& A with management, copy of the records etc or where their assertions came from and re-calculations of them to confirm accuracy
I did the same format for all 3 points, just amended for each situation.
I think that was Q2 as they said the report was unmodified but with an EOM paragraph, which means that its was unqualified but not unmodified , so maybe she was looking for that to be pointed out! If causing going concern issue it should be disclosed in EOM paragraph and KAM if listed co.
It’s so hard to know, but i think it was ok to mention ROMM caused by audit risk if it was material but just not talk about the element of whether to disclose it or not.
There’s so little time to even be able to contemplate whether or not to mention these things!This is my 3rd time sitting this paper and i hope it was the last!!!
Re: “What IS the difference between ‘performance audit’ and ‘audit of performance information?”
Is described the difference between limited and reasonable assurance.
negative v positive opinion and level of assurance provided.Q1 i found tough but assumed it was materialtiy of component auditors, the Year end consolidated dates not being co-terminus, accounting standards, ISA600, minority interest of acquisitions and their materiality, reliance on component auditors and assess them for their reliance, experience, qualifications and independence etc. Hopefully will get some marks anyway!
Usually like audit report Q’s but was unsure about the recognition of the revenue under IFRS 15 re the terms of the contract, was that terms spicifically re those 2 businesses contract or did it effect the revenue recognition! SO i skipped it and did Q3 instead!
Q3 was easier to answer than it looks i think!
Its always the same, matters to consider for any of them are their materiality to fin st’s , the accounting standards, their risk of material misstatement and effect on audit report, then evidence is Q&A’s , recalculations…..just did the same points for each part a,b and c but re-jigged to relate to each part!Here’s hoping i passed this time!