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@ash182 said:
I did find this hard in approaching the answer. I cant remember the specifics, something around not disclosing the payment after year end?I discussed various scenarios that would lead to various opinions, qualified, adverse, disclaimer. you?
Question was, directors don’t want to disclose anything related to payables although amount was material 490K. They were of the view that both Overdraft and Payables fall under current liabilities there is no issue.
It was a material misstatement but was not pervasive as it was only one figure related to payables.
I mentioned that it is a presentation issue as IFRS 1 states figures should be presented as per defined rules.
I then mentioned that it is not about broader terms but about treatment of various figures e.g. payables make part of working capital but overdraft doesn’t.
I also one mentioned that there might be additional reason that some of the suppliers threatened the company of legal action and now to hide it they did this window dressing by taking overdraft from bank and by extending payables period etc etc 🙂
I think there is a misunderstanding with the payroll question.
It had specifically said “ignoring redundancy cost”
@ash182 said:
I did find this hard in approaching the answer. I cant remember the specifics, something around not disclosing the payment after year end?I discussed various scenarios that would lead to various opinions, qualified, adverse, disclaimer. you?
I mentioned as well that info about profit or revenue is not given to calculate materiality
@rishi121211 said:
I think there is a misunderstanding with the payroll question.It had specifically said “ignoring redundancy cost”
redundancy cost means End of Service payments such as gratuity, indemnification due to contractual obligations etc.
@kanchandhankar said:
I mentioned as well that info about profit or revenue is not given to calculate materialityCurrent liabilities figure was given.
Yes but why calculate on a basis of 450 employees when the QUESTION asked you to exclude this within the calculation
Surely you would calculate the rates based on normal employees which were 500 . Why overcomplicate?
@tayyabom said:
Question was, directors don’t want to disclose anything related to payables although amount was material 490K. They were of the view that both Overdraft and Payables fall under current liabilities there is no issue.It was a material misstatement but was not pervasive as it was only one figure related to payables.
I mentioned that it is a presentation issue as IFRS 1 states figures should be presented as per defined rules.
I then mentioned that it is not about broader terms but about treatment of various figures e.g. payables make part of working capital but overdraft doesn’t.
I also one mentioned that there might be additional reason that some of the suppliers threatened the company of legal action and now to hide it they did this window dressing by taking overdraft from bank and by extending payables period etc etc 🙂
yes material and not prevasive was the choice. i felt they were looking for an explanation around how other opinions would form, hence my discussion around other potential scenarios related.
should have got a few marks regardless 🙂
@ash182 said:
yes material and not prevasive was the choice. i felt they were looking for an explanation around how other opinions would form, hence my discussion around other potential scenarios related.should have got a few marks regardless 🙂
of course you’ll get marks; ACCA markers are very generous.
Not sure how tough the marking is for ACCA but there is no way i could have wrote as much as the examiner has answered in the answers to past papers.
I think the most difficult bit in this exam was identifying THREE STRENGTHS in that dirty till control system 🙂
@tayyabom said:
I think the most difficult bit in this exam was identifying THREE STRENGTHS in that dirty till control system 🙂haha tell me about it! 🙂
@tayyabom said:
of course you’ll get marks; ACCA markers are very generous.I hope to get few marks as well
@rishi121211 said:
Not sure how tough the marking is for ACCA but there is no way i could have wrote as much as the examiner has answered in the answers to past papers.In past paper answers, examiners write all possible answers e.g. if 4 risks are to be identified they’ll write 8 just for teaching purpose.
In my opinion, idea about ACCA F8 exam is that, if they have asked you 4 audit risks try to write 6 audit risks (permitted you have time), markers will mark your best 4 answers out of 6 since there is no negative marking.
ACCA will get really tough if they started negative marking. it’ll get very difficult to pass.
E.g. 18 (d) I wrote 2,3 plausible answers as I was also not sure how to go about this; from my past experience with ACCA I know that they’ll cross the invalid answers but give marks to valid reasoning.
@ash182 said:
haha tell me about it! 🙂Haha true that 😀
@ash182 said:
haha tell me about it! 🙂what was your answer 🙂
@tayyabom said:
I think the most difficult bit in this exam was identifying THREE STRENGTHS in that dirty till control system 🙂What strengths were there? What did you identify?
1. Cash kept within a safe
2. Reconciling the cash, credit cards to the sales on tills, as a result identifying discrepancies.
3. Cant remember the third but think there were maybe 2 more which could be usedMonthly reconciliation and finance director authorizing it was a strength.
Cash was sent out to bankvery day morning that was a strength
Sales were matched with receipts at the end of day, that’s strength
all receipts and sales transactions are transferred to HO and a clerk matches them that’s a strength.
Test of controls?
Cash being sent to bank (observe)
Monthly reconciliation being signed off by FD (get a copy of recon and inspect)
Daily recon performed by clerk (again get a copy and inspect)@tayyabom said:
Current liabilities figure was given.How do u compare with liability
I didn’t know if that 490k was material or not
But I made assumptions
And also mentioned if it is material n not pervasive then modified with except for opinion@tayyabom said:
Monthly reconciliation and finance director authorizing it was a strength.Cash was sent out to bankvery day morning that was a strength
Sales were matched with receipts at the end of day, that’s strength
all receipts and sales transactions are transferred to HO and a clerk matches them that’s a strength.
Test of controls?
Cash being sent to bank (observe)
Monthly reconciliation being signed off by FD (get a copy of recon and inspect)
Daily recon performed by clerk (again get a copy and inspect)mohammed seems like we wrote exact answers to each other 🙂
@kanchandhankar said:
How do u compare with liability
I didn’t know if that 490k was material or not
But I made assumptions
And also mentioned if it is material n not pervasive then modified with except for opiniontake it this way; 1% of assets is material and you have been provided with total assets of the company and one material misstatement in assets, what you’ll do? compare with assets and try to establish materiality. it is exactly same thing, just replace assets with liabilities.
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