AA*** ACCA F8 December 2017 Exam was.. Instant Poll and comments ***

I didnt write the, down :/ do you remember what was asked in the questions for 20 marks about sales and the question for 30 marks?....btw there was one question from multiple choice about what was supposed to do one of the first if the get list next year...what was the correct answer? chnge the engagement partner or this answer abot the 15% of the recurring fees?

I chose the 'reduce recurring fee' alternative. What was your answer for salary increase? A?

Exam seemed okay.. The questions weren't unnecessarily long. Very Hopeful for a pass.. Thanks to Open Tuition I got used to tackling the application questions during revision and forgot some knowledge questions like the processes of the post and pre issuance review.. That will be costing me 4 marks..

I chose immediately reducing the recurring fee to less than 15% too..

me too however once I left the room I thought about the option of changing the partner...was it mentioned that the 15% will be in 2 consecutive years or something similar?

I chose rotate the partner as he's been an audit partner for over 5 years.

It said it is reducing non audit service fees to less than 15%. I picked C - stop providing additional non audit services, as once company is listed that would be a self review threat. Only in small companies audit firm can provide both services, and any if two separates teams prepare it... Perhaps I'm wrong?

But you can still provide tax services. It's only financial statement you must not do for plc's

@dipatil said: I didnt write the, down :/ do you remember what was asked in the questions for 20 marks about sales and the question for 30 marks?....btw there was one question from multiple choice about what was supposed to do one of the first if the get list next year...what was the correct answer? chnge the engagement partner or this answer abot the 15% of the recurring fees?

About substantive test for Sales and returns?

I think change the engagement partner because in order to be listed you cannot do more than 5 years. and you can have more than 15% as long as you change it on the second year

Multiple Choice Questions Please note the questions below may not be in order 1. Which of the following are NOT part of ACCA's code of ethics Confidentialty Professional Competence Prossional Behaviour Are in ACCA's code of ethics 2. Which of the following are threats to your resulting from the audit of Hasting Options Familiarity Self review Advocacy Self interest Answer Self review since we prepared the financial statements and we audited them which is wrong and self interest threat 3. Jo Smith the finance director of Cho Cho joined the audit firm as a audit partner what should the firm do to safeguard itself Options Dont audit Cho Cho for two years Carefully determine the composition of the audit team Jo Smith should not be involved in the audit for two years (correct answer) Jo Smith will be allowed in a supervisory role 4. Which assertions relate to salaries choose four Options Existance (no) Valuation (no) Cut off (yes) Accuracy (yes) Presentation (yes) Classification (yes) 5. Useing the information provided by the entity develop an expectation of salaries Prior year 1,100,000 4% increase 1.1 mil ÷ 2 × 4% 22,000 Bonus for permenent staff 25,000 50 × $500 Temp staff 240,000 Total 1,387,000 6. What was payables ratio The payables ratio was 41 days which was admittedly difficult to calculate U needed to determine the cost of sales by subtracting revenue from gross profit which would give you 6002 i believe Now there were two options with 41 days One stateing that credit was loosened was wrong One stateing that there might be a misstatement is correct

I agree with those answers :))) do you have the rest of them?

@damian23 said: I think change the engagement partner because in order to be listed you cannot do more than 5 years. and you can have more than 15% as long as you change it on the second year

... you are rght that is why I asked if there was nothing mentioned about the consecutiveness of the fees? If there was not then you are absolutely right

@damian23 said: I think change the engagement partner because in order to be listed you cannot do more than 5 years. and you can have more than 15% as long as you change it on the second year

I thought it was more than 7years?

what about this question/answer? 5. Useing the information provided by the entity develop an expectation of salaries Prior year 1,100,000 4% increase 1.1 mil ÷ 2 × 4% 22,000 Bonus for permenent staff 25,000 50 × $500 Temp staff 240,000 Total 1,387,000 why does we divide into the 1.1m?

We divide the 1.1 mil by two because the salary increase occured in May 2017 and the year end is October 2017

What kind of deficiencies and recommendations did everyone come up with on question 18

@laughingcoffin said: We divide the 1.1 mil by two because the salary increase occured in May 2017 and the year end is October 2017

oki make sense what about the rest of the MCQ do you have them by Chance?

Hey Dipatil no i cant remember anymore MCQ but i might be able to recreate some more if ppl provided information to refresh my memory

What about the wages and salaries expense anyone remember

@laughingcoffin said: Hey Dipatil no i cant remember anymore MCQ but i might be able to recreate some more if ppl provided information to refresh my memory

OMG you have fantastic memory :) ...

The MCQ about misstatements, materiality level was around 40,000 I think and the total of uncorrected misstatements was less than the materiality level. The two choices I can remember were : To extend substantive testing to see if more misstatements would be found; or to get written representation that directors believe aggregate of misstatements to be immaterial. I chose the latter because the question said it was in the final review stage. Also, the question where the Auditors were considering tendering for a client's competitor's audit. I was stuck between two options: Have the quality control reviewer review both audit files; Have the quality control reviewer review controls over both audits; I chose the latter because it was just at tender stage, so there'd be no audit files to review yet. Don't remember the other choices Payables question I chose reduced to 41 days because payables were understated

MCQ 7. Materiality is 40,000 and Uncorrected Misstatements are 32,000 what should the auditor do Options Do nothing because its immaterial Perform substantive provedures to identify more misstatements (answer) Obtain written representation from management on why they believe its immaterial

@lolabun said: The MCQ about misstatements, materiality level was around 40,000 I think and the total of uncorrected misstatements was less than the materiality level. The two choices I can remember were : To extend substantive testing to see if more misstatements would be found; or to get written representation that directors believe aggregate of misstatements to be immaterial. I chose the latter because the question said it was in the final review stage. Also, the question where the Auditors were considering tendering for a client's competitor's audit. I was stuck between two options: Have the quality control reviewer review both audit files; Have the quality control reviewer review controls over both audits; I chose the latter because it was just at tender stage, so there'd be no audit files to review yet. Don't remember the other choices Payables question I chose reduced to 41 days because payables were understated

regarding the second question I picked the option related with the receiving the approval from both companies...I'm not native I didnt fully understand this about "tending" I think if the options that you are mentioning are once job is done...

@laughingcoffin said: MCQ 7. Materiality is 40,000 and Uncorrected Misstatements are 32,000 what should the auditor do Options Do nothing because its immaterial Perform substantive provedures to identify more misstatements (answer) Obtain written representation from management on why they believe its immaterial

Here the correct answer is done nothing? I picked that one because its inmaterial and was the final review...

If misstatements are approaching the level of materiality there is a strong possibilty that even more misstatements exist that werent picked up because of sampling risk as a result more testing is done

What about last question - control deficiencies?

Some parts Im able to recall... Question no 16 - - 7 audit risks - what should an auditor do before and during inventory count - assertions occurence and existence (inventory) - pre and post issuance (i think this was part d) Question no 17 - what is the impact on auditor report

There was question about things to consider before setting up an internal auditing department, for 4 marks I think. Also, how internal auditors would help deter against fraud aside from fraud investigations, for 2 marks. That was a pretty nice question. Another question was about substantive procedures on sale or returns. I haven't see anything about this in the book so I had a guess. I said to ensure they are accounted for separately, not included in revenue til past the 60 days, ask the director why he believes only 15% will be returned and review supporting documentation, and that it should be in liabilities til the sale is finalised - but I believe that is wrong! So I don't have too much hope for marks here. Another one was objectives of the sales and despatch system, I think they were looking for 4 objectives.

deficiencies: 1. sales clerk is decision maker re credit limits for new customers / must be credit controller 2. ordering by phone / no trace, must be by e-mail or via internet site 3. no customers' approval re placed by phone orders 4. no responsible for sales price data ( monitoring, changing, etc) 5. discount manually typing by sales clerks / must be automatic calculation for certain period 6. no reconcliation sales ledger to accounting books one more point don't remember :)