[tanlihtyng]

@Fidget said:
What did you come up with for the Capital Expenditure Review? Worth 8 marks that was, but I wasn’t really sure what it was asking me to do.

I didn’t have much time for it but I wrote about checking arithmetic accuracy of the forecast, getting info / working papers on how the 1mil (sold of an old building) being derived and how sure are they it won’t turn out to be lower than 1mil, WR from management that they will be responsible for the forecast.

I think that’s all I put down, I got no time for it. :C

[tanlihtyng]

@sbeeharry said:
For me all were not material, even when aggregated together. So I said an unmodified report should be issued. I think we has 6 marks to comment on impact of audit opinion and report. With an unmodified opinion, i really did not know what to comment in order to achieved the marks.
Any other comments regarding this?

The 4 items were: impairment, borrowing costs (75K), irrecoverable receivables (65K) and FVTPL equity. Did you remember the PBT?

I can’t remember how much was the error. $400K? It sort of started with “4”. Did you divide it over the PBT? It should be above 5%.

I’m not sure what’s the % if you divide the asset value over TA, if you do this way maybe you will get an ‘immaterial’ materiality.

But since the impact of impairment would be debited to SOCI, I chose PBT, because with a lower amount compared to TA, I’ll definitely get a higher materiality figure.

And yes, I find the 6% rather unreasonable.

[tanlihtyng]

@demashi said:
Q2 was crazy while Q3 & Q5 were fair enough. I learnt from the last exam to start with the optionals first – time is a factor.

What’s your materiality for each item in Q5?

[tanlihtyng]

@bayigga said:
On Deferred tax asset, I also concluded that the Asset should be recognised. It was a change in supply not change in the way the business in carried out.
They sold(build) to themselves instead of using someone else.

I didn’t think a change of supplier providing exactly the same product you’ve been dealing in is a significant change in business.

That’s how I discussed it.

I first discussed the normal IAS12 treatment then brought in the local jurisdiction and wrote about understanding should have been obtained that such changes didn’t constitute a ‘significant change’, else risk of DTA being overstated. I didn’t conclude anything.

[tanlihtyng]

@Fidget said:
i) ..I thought “significant” had to be clarified to see whether the deferred tax asset still qualified.

…

iii) The operating lease should be accounted for evenly over the period of it. So it was $270 that should’ve been recognised and not $150. Also, copy of lease agreement needed to verify that it was indeed an operating lease.

For (i), yes I did write the same thing.

For (iii), I focused on audit evidences such as lease contract has been inspected to verify leasing terms and payment arrangements, payments agreed to bank statement n invoices, and one more which I forgot.

that time was just trying to get some marks, did think of matching concept but forgot about it after that. When I see ‘lease’, I was like what’s is it inside IAS17 related to this, couldn’t think of any

[tanlihtyng]

I was struggling with business risks too. I simply put down : compliance risk coz some unusual animals might be prihibited to be sold + reputation risk if unsold animal dead bodies not being managed correctly and being found out + purchase of 20 stores w/o proper plan + fully trained staffs can easily leave coz client no control on them + AR increased by 90% problem of handling them thus cash flow problem.

My risk of MM quite different : IFRS15, IAS41 (I was thinking about yearly remeasurement of consumable animals but I guess that’s not correct..), IAS 38 (Risk of recognising internal generated brand as intangible assets, do u think this is reasonable?)

[tanlihtyng]

Regprentice,

Maybe 5 business risks 2m each. What u guys putting down for the 20m risks?

Mine INT variant.

Thought Q2(a) was about utilised loss as DTA (only to the extend there’s future taxable profit) + Leases (but didn’t look like IAS 17, what’s it about?) + Convertible bonds wholly recognised as liability (should split accounting).

Q2(b) 8m on audit CAPEX forecast.

As for Q5, although all scenarios containing misstatements, but only the first one will get a qualified opinion isn’t it? If I remember correctly, all the rest didn’t meet the materiality level. But I quite rush with my last Q so I’m not sure whether I see figures correctly. I wasn’t confident when doing this Q ‘coz most of them unmodified. Sad.

[tanlihtyng]

Q1 is crazy.

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