*** ACCA P7 December 2017 Exam was.. Instant Poll and comments ***

@iadam said:

@tj200. Everything u have said like looks like me. I answered the questions in this same order and I’m a finalist too.

Wish us the best of luck.

Wishing you all the best too. Can’t wait till all the finalists go mad about trying the Link Theory in January

The loan mas material by nature due to it being a related party transaction

Guys, relax re Q2. I have not heard a single good word about it, which means everyone will be in the same boat. Hoping they will release this question in the Sep/Dec 2017 sample questions so I can take a look (from a tutor’s perspective), but in the mean time bear in mind that audit risk with a new acquisition and some audit tests is hardly an unpredictable Q1, and the ISA 450 article seems to have been tested a fair bit in Q5, both knowledge and then application.

Swings and roundabouts people.

However, I do worry when people say there were too many risks to write. What would you rather – not enough?

If it is worth 16 marks then find 8 risks, explain them the right way, and you should be pushing 12/16 at least. If you have more than 8 and time is ticking, stop writing after 8.

I worry even more when I read 1.8 mins a mark…

Yes I said they should of got permission to contact previous auditor to get professional clearance. Then went onto the ethical parts.

Well number 1 the exam is 195 mins, so it is 1.95 mins per mark.

And number 2, if a marker does not know that I would be tempted not to have a huge amount of assurance about when they last marked…we have been 3 hrs and 15 mins for quite a while now.

The comment re money laundering is ridiculous. The exam is marked in incremental half marks and you can leave out entire topics and still get 100%, because there are always a lot more than 100 marks worth of content available. If a student capable of 60 is getting 49, it will be for one of the following reasons:

– forgot to explain enough of the points they raised
– totally misread / misunderstood a large requirement (e.g. did business risks instead of audit risks)
– did an audit report question with out of date knowledge

If anything, too many students throw things like money laundering and going concern into as many answers as they can, without any justification, btw.

@arvind111 said:
Q4 – anybody do this? Within the second section, did you talk about professional appointments and how the new auditor needs to speak to the previous auditor before accepting the new engagement?

I remember this one . I think that the point was that if the previous auditor does not reply it means that the potential client is categorized as risky.

@machanga said:
i went to a revision course with a guy that is a marker for this exam in london and that is what he says…multiply each mark by 1.8 minutes and thats your time allocation for the question . I tried to do it but its too hard! .
Also he said that if you make a fundamental mistake like not mentioning money laundering anywhere in the exam your 60% can turn into a 49%..i

Who was the lecturer I heard the same thing aswell, surely cant be correct if its not warrabted in the question.

Hi Muhammad Husain
I attempt part 1 part first and wrote that the benefit of QC is help in planning ,ehicaly engagement,paper work each work and don’t lose information.i leave the second part as out of time.
Different materiality level used depends on risky balances ,also define materiality,touch a little bit performance materiality.not communicating to audit committee leading to scope limitation affect our work.and I think 2 or three professionals issues identified now I don’t no either I will secure 7/20 or not.

I think i have passed that one, thanks to open tuition!

NQ

@zaeemarif said:
Hi all,

This is what I can recall.

Q1 – Hawk & Co audit firm/Component auditor Bill & Co/Flamingo Group
a) Audit risk (Goodwill, inventories consignment, Paradise brand, consolidate profit/loss pro-portion basis 6 months, RPT, opening balance adjustment, interco balance/transaction elimination, etc.) (16 marks)
b) Inventories audit procedures (5 marks)
c) Extract component auditor audit strategy (analytical procedures based on management work, audit partner 15 years in charge without rotation) (10 marks?)
Format/professional writing – 4 marks

Q2 – Quality control (where most of us screw up)
a) QC importance (audit partner subject to litigation, important to maintain good name of the profession, management & public reliance on audited result for decision making)
b) Materiality (firm-wide change from 10% PBT to 15% PBT) – seriously not sure what the question want, it’s an open ended type of question.
I just talk about materiality usually based on Total Assets/Revenue/PBT and what’s the range, if low risk can use higher range scope, higher range will increase detection risk due to lesser substantive work
c) Could not recall on this question

Q3 – College & WCC
a) Audit procedures for PFI (graduate within average 3 years, retain first year student, employment/further study within 12 months for graduated student)
b) Matters to consider & audit evidence
i – Built property to be rent out. Issue identified is wrongly record as IAS16 PPE, should be IAS40 Investment Properties since no intention to use. Depreciation not yet charge since not yet rent out as at year end. By right, should depreciate upon available for use.
ii – Fund receive for 3 activities. Must be IAS20 Government Grant. Allow to recognise revenue provided meet all conditions. Must ensure revenue match with cost.
c) I skip this question and only return to it for the last 5 minute. The only answer that I have is, the opinion should be negative worded “Nothing has come to our attention…”

Q4 – Ethical
a) Asp Co – Small company receiving significance financing for growth. Currently provide non-assurance service (bookkeeping, payroll, tax) but client request to also perform audit. Self interest threat due to fee. Self review threat due to non-assurance work to be audited by same firm. Should use different team and also assign 2nd reviewer. I also include money laundering element due to “significance financing” from unknown party. Need to inquire on the source of funding to avoid being associated with money laundering. Possibility of over depending on client audit fee due to client potential growth. (7 marks)

b) Viper Co – Previous auditor did not response to our query. Client file litigation towards ex-auditor due to modified report (obvious intimidation threat). Client may have integrity issue. We may report to professional body on the previous auditor due to non-cooperation. Should consider weight of risk vs fee to be earn if to accept this client. (7 marks)

c) Could not recall on this question (6 marks)

I’m a finalist and really hope all of us will pass. We are in the same boat for Q2. Sigh.

What is Q3(c) about? I think I completely ignored it. I thought the examination procedures were 6 marks and IAS 40 and Gov. grant questions were 7 marks each giving it a total of 20 marks.

@machanga said:
I am a finalist, and i will be extremely lucky if i pass. to make it worse i am under the seven year rule..so they will be taking away my p1,p5 and p3 exams. Kind or regret taking a break from the acca now ! damn i was sooo close to finish!

Oh dear all three at once!

was this your last sitting before the 7 year period ends?

I like the idea of taking out 15 mins, but best to allocate this time around the questions and call it 1.95 mins per mark (of thinking and writing time).

Anyway…

The Sep/Dec 2017 question paper sample is out on accaglobal. They have not published Q2 from December (perhaps preferring to keep a nasty question out of sight!) but have published Q5.

Q5 is easy in some ways, but a brute in others:

– there will be marks for calcs in (b) … but I bet many students either have not done them at all, or have made a mess of them

– the depreciation error was based on a sample of only 3.6% of vehicles, so the error needs to be projected by dividing 350k by 0.036 … but even that turns out to be immaterial by miles. Might even say trivial … but seems to be a system problem and will therefore repeat in future if not fixed.

– the loan is trivial by size but is, as others have mentioned, a RPT and as such can look at whether it is material by nature. Thing is, it is still tiny in terms of the company … but a 75k loan is likely to be material to the person receiving it, so…

– the figures in the story allow you to work out how much the provision has fallen (3% x total revenue for year / 12) and that appears material to PBT at the very least

– in (a) it is the article … but only a small section of the article. I bet a lot of answers have gone rather beyond the requirement, which seems to just want an explanation of factual, judgmental and projected misstatements, and that factual are non-debatable, judgmental require a long discussion as it is a matter of opinion (e.g. the provision), and projected typically require more audit work because it would be odd to expect an adjustment to FS based on an educated guess of the error.

In short, Q5 is a good technical test, to put it mildly.

@johnoreilly said:
HAHAHA I had the same lecturer, Shaun B. Very good lecturer.Hopefully he helped get us over the line 🙂

hahha He is funny. In any case i was not able to follow the time allocation.That thing about stop writing in the middle of a sencence..not for me..