[vorkath]

I had only done 75% of the paper due to bad time management and I was so worried that I might not be able to pass on my first attempt. I got the shock of my life when I saw my results.. 65%!!! I’m sooooo glad the markers are in good mood!

[vorkath]

@sujawahab said:
Question 4 – matter to consider evidence expect to find question

Ohhh I didn’t answer that question. Had a heart attack for a moment there, thought I misread other questions

[vorkath]

@sujawahab said:
provision made for customer rebate, i wrote that the provision can not be made. since this is similar to early payment discount etc for which provision is never recognized … is this correct

On second thought, I think you’re right… we don’t have to pay rebate until they actually buy the specified amount .. Which question was this again?

[vorkath]

@gnom71 said:
Colleagues,

There was no grants. It was tenders. Government gives no money but give the orders/work to do.

I knew it!! I thought I was blind to not spot the grant… Now that I can recall, it’s just normal construction contracts with the government therefore falls under IFRS15, not IAS20. Question did not talk about any conditions attached to the funding anyway.

[vorkath]

@anastassiya777 said:
i agree with you…it shouldnt be classified as investment property.not meets criteria.

Wow I didn’t realise that too.. However to my understanding it did say he purchased the land on speculation.. which means there is undetermined use for the land therefore meets the criteria of IAS40. Construction for customers was his ordinary course of business, not selling land.

Correct me if I’m wrong.

[vorkath]

For the error in calculation of impairment that the director only adjusted half of it until it became inmaterial in Q2 can I say that even though the remaining error is immaterial it could be a system error which will effect subsequent periods therefore will have an impact on the audit report in the following years. Therefore the audit team should have confirmed that the source of the error was corrected.

[vorkath]

@lesbella said:
For the sale of boxer rail which have asset. The asset should have perform impairment review as there is indicator of poor sale. And asset held for sale. Fair value is subjective and complex right. One buyer for the sale is too simplistic right. Should get market value to identify correct valuation. .

Not sure is this stand for the sale of railway

I did not include those in my RoMM but your points seem justified and well explained.

And yes I remember writing something about IFRS15.. I wasnt sure of the exact requirements but I said that the construction contract should be recognised based on its stage of completion. Since work will only begin August 2018 he should not recognise profits. Need confirmation on this though

[vorkath]

@lesbella said:
I remember if correct that there is sale of division . But the restructuring provision no announcement made right. And the restructuring is likely signed on august 2018 with is 1 month after year end .

Correct me if i am wrong

Question said that it is likely signed on June 2018 which is in the current year. As for the announcement I think that’s a valid point which I missed

[vorkath]

@bhonegger said:
Q1
Business risk:

Liquidity: 0.3m in cash with acquisition planned and already 0.7 gearing
Gearing: 70% liability, potential high interest cost and covenants
Continuity of funding on Residential: Government reducing funding on grants, it’s 25% of their Revenue, any going concern risk?
Exposure to Property market: On their commercial undevelopped land held at FVTPL, in case of market crash (2008), very large SOPL charge and risque of insolvency
Reputational: Disposal of the sub with redundancies, negative media coverage and strike with costs

Audit risks:

Grants: Are they recognised in line with IAS20? Risk they are deferring when not allowed
Land: Investment property, requirement to FVTPL, incorrect 10K gain when it should be 1m loss, risk the rest of portfolio is misstated
Disposal of rail: Risk that the disposal of asset is incorrectly recorded, very material figure. Disclosure risk: Should be showing as Discontinued operation
Disposal of agriculture: Risk provision is overstated as training costs not allowed. Same risk as above, shoud show as discontinued operations. Risk of litigation if any redudancy deemed unfair dismissal

Audit of restructuring provision:
*Recalculate employer calculations, agree to employee salary per GTN
*Obtain letter from ER to EEs, verify date
*Obtain copy of media coverage for audit file
*Ensure in line with employment law and taxation law for any taxable/non taxable lump sum

Anyone with theirs? I feel like I could have missed loads

Another point you could add for the provision is the sale agreement. In order to recognise a restructuring provision which relates to the sale of an operation, there must be a binding sale agreement. I explained that there must be evidence to support the claim that it is highly likely to sign the sale agreement. For the procedures: Review any correspondence between co. and potential buyer for evidence that he will sign the agreement

[vorkath]

@thomasperry123 said:
I done the UK variant. Can anyone tell me what the mark scheme was for Q1?

a) Business risk 8 marks
b) RMM 12 marks
c) procedures 5 marks
d) ethical issue 6 marks

[vorkath]

Wait what there was a grant? Damn how I could I miss that.. must be me panicking to read everything

[vorkath]

@mumbaikar said:
And for question 2 the answers i felt mine were pure reptition example the auditors lacked some competence and required training!
What abt others? acca examiner dislikes repetition i guess

Same for me haha.. I suggested training quite a few times

[vorkath]

@mumbaikar said:
So i wrote for each division its fine ya?

Yes, in fact there is a business risk in each of the division.. as long ask it is a business risk you should get the mark

[vorkath]

@mumbaikar said:
When writing business risk and material misstatements for boxer, did we have to write for risks for each division??

Not necessarily.. business risk concerns the company as a whole.. as for RMM anything that may cause the FS to be materially misstated is fine

[vorkath]

@lesbella said:
Can u remember what error?

I state the sequence of basis of qualified report should be place after the opinion paragraph. The kam should be after the basis of opinion. Should remove the emphasis of matter and replace material uncertainty related to going concern. No accounting standard mention in valuation of financial instrument . Unprofessional language saying finance director is inexperience. The pharse we believe state not uncertainty by auditor. And never mention which customer

I think all of your points are valid..ill add on: KAM did not state how the matter was addressed during the audit and make reference to the related disclosure, the qualified opinion title should not include the misstatement, no quantification of the effects of misstatement in the basis of opinion, IFRS should be stated in full, EOM did not make reference to how the matter can be found in the notes (assuming EOM is appropriate).. the rest should be same like yours

[vorkath]

Did anyone else use the lack of diversification as a business risk? Also the gearing was 70% which seemed high but I wasnt sure whether its high for a construction company.. regardless I went on about breaching loan covenants and going concern risk..

[vorkath]

@tangibleasset said:
Guys

What was in question 3?

I have completely forgotton what was in it

I know question 4 was about matters and evidence

Can someone please help?

Regards

Tahir

Question 3(a) was about implications on the completion of the audit & further actions.

3 (b) was about difficulty in providing assurance for CSR reporting & examination procedures

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The report appraisal was worth 12 marks. You get 1.5 marks per identified&explained point

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Yup.. caught me off guard there haha.. but I only had time to appraise the report so I skipped the benefits and disadvantages.. although all I’ve ever learned from the study guide was how to determine whether a matter is KAM and what should be addressed in KAM.. Kinda disappointed they asked benefits & disadvantages instead

[vorkath]

Damn I had 15 minutes to finish Q5.. thank god the errors were quite obvious

[vorkath]

Hi! Thanks for your advice..

As for P2, I got 58 for that sitting. Frankly speaking, I expected myself to do better because I have revised each standard thoroughly.. The problem for me was time management. I was too busy perfecting my consolidation I ended up spending almost 2 hours on it. I had to skip the ethics question which was 9 marks and part a) and b) of Q2 worth up to 15 marks..

Here’s my advice for you, set a strict time limit for the consol question. Im not sure which statement will be tested next but my sitting was CSOFP. Revise these standards thoroughly : IFRS15, IFRS16, IFRS2, IFRS13, IFRS9. The examiner has a preference to test on these areas (all of these were tested in my sitting).

I wish you all the best in P2! And good luck too in P7!!

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