AAA*** ACCA P7 March 2017 Exam was.. Instant Poll and comments ***

paper was ok.... not much difficult.. hope to get pass!

Hope to get a pass! Paper was not difficult had a lot to write

what were the risks identified in question 1

i identified 12 risks.

i have chosen question 4 and 5. question 5 was very hard.

i did the whole risk assesment on financial position , profit and loss and some general risks. question 2 was quite difficult for me.

@qazimarsalan said: what were the risks identified in question 1

1- misclassification of subsidiaries 2- capital exp 3- inconsistency in revenue nd operating exp 4- tax exp 5- finance cost 6- goodwill impairment 7- indefinite life of brand names 8- bank loan 9- DTL 10- research exp

mine are almost the same as yours, what threats did you identify in q3

@mschembri said: i identified 12 risks.

i found more than this but available marks do not allow me to write more than 10.. There were too many calculations invovled and according to examiner's comments she give 1 mark per relevant calculation.

i made a massive blunder of not giving conclusion in q1 i totally forgot about that and moved on

@qazimarsalan said: mine are almost the same as yours, what threats did you identify in q3

self review, self interst, intimidation and advocacy.. 2 clients were listed, 2nd client was listed but immaterial..

i didnt take into account of listed status but identified the same risks

@qazimarsalan said: i made a massive blunder of not giving conclusion in q1 i totally forgot about that and moved on

Hahaha I also forgot but in the last 2 minutes when i was rechecking i found this nd gave conclusion. when i finshed this announcement made to stop writing :P

@qazimarsalan said: i didnt take into account of listed status but identified the same risks

IESBA code states that firm can only provide non audit services when the client is not listed and for listed clients services shouldnt be material... that's why in 2nd client we were given figures to calculate materiality.

@qazimarsalan said: what were the risks identified in question 1

1 - Brand impairment wrong 2 - capital expenditure increase 3 - stock impairment required? Current assets materially increased 4 - Research costs may be capitalised 5 - associate and subs treated wrong 6 - wrong exchange rates 7 - on stock exchange so management pressure may cause management of earnings 8 - Revenue material increase - not in line with other information provided 9 - Changing useless lives of assets wrong so depreciation understated 10 - Goodwill stayed the same - looks like no impairment 11 - health hazards - no provision in place Couple of others I can't remember Anything similar?

I write in bullet point form in section b questions carelessly, am I surely failed? Or only deducts some marks?so worry~?

Anyone else pick up in 4(c) that the accounting system would change half way through the year during the next audit? February 2017 consultancy finished and year end September 2017 so likely overlap of systems. Mentioned here that this would require a meeting with the client as fee will increade due to increased substantive and controls testing.

@cynthialiu said: I write in bullet point form in section b questions carelessly, am I surely failed? Or only deducts some marks?so worry~?

Bullet points are fine for the procedures required and other information questions

Please tell me what the question q2(b)and q2(c) thanks.

In Quest 1 for the analytical procedures is it ok to do the variances and explain them through risk assessment? What other calculations have to be done? Please share. Does any one remember on the answers to quest 2 and 5. Quest 5 was it a going concern problem?

Was question 5 on listed entity?

What did you write about q5?

question 2 was impossible did not write anything. so worried 25 marks gone.

Risk Of Material Misstatements 1) IAS 38 indefinite life 2) IAS 36 impairment of Product 3) IAS #7 penality against hazards 4)Goodwill impairment and derecognition of goodwill against Product withdraw sales 5) No indication of Investment in Associate 6) Listed Company inherent risk 7)Loan treatment 8) Analytical Procedure as specified in question

Q no 2(1) inadequate disclosure due to PURP adjustment in consolidated Financial Statement (2) New subsidary lack of knowledge,Detail planning is requried only analytical procedures are not sufficient (3) Banned on international Trade Means restate receivable payable balances by using appropriate exchange rates

I have restart my ACCA after a gap and it was my second attempt of P7. I found this paper difficult as compare to the Dec 2016 in which i was failed by 1 mark Q1 was easy: Risk of MM: - Forex exchange risk (company operates in 100 countries) - Subsideries and associates (complex group structure) - Continous research (risk of capitalization - PPE was increased (Risk of overstatement) - PPE (useful life estimation can be wrong) - Good will (not immpaired) - Brand (risk of understatement) - Development (Risk of overstatement, they may not be qualify for capitilization) - Finance cost (no change) - Tax rate (Same tax in both year with different profit) - Revenue (overstate because it was not consistent with OPM) - Loan (no interest was charged, disclosure missing etc) b) additional information: - additional information elated brand impairment test - useful life of PPE change, more information about estimates - finance and Tax not change, more information - details about loan taken from bank, interest rate and other term etc - impairment test of all brands, why not impairing? - information about revenue growth - information about GW whether impairment test has conduct or not - previous year FS to verify the impairment test of brands and are they content etc. I dont know if these are right or wrong by LSBF lecturer said to ask for information regarding to everything. C) Subsidiary audit procedure and impairment audit procedure. I think it was easy. I have written about 10 audit test in each.. lolz Q2 was a tricky question A) we was auditing group and subsidiary, the sub has made mistake but it was corrected. I did not found any professional issue here so i have written about self review threat as we will not check it again because we have done its audit B) new subsidiary, audit partner rely on local audit working paper. I have written about lack of quality control. Assets were material, risk of FV not calculated, wrong Good will etc C) audit manager rely on audit firm and did not perform audit. Later there was going concern issue. So, i have written about quality control. Fine the manager, lack of training, he dont know his duty etc in the end i have written that can rely on audit firm work but still need to perform sample work on their work etc Q4) I found it easy but did read correctly that first two companies were listed so my actions is not going to get any marks I think as i said we can provide services by putting safeguard there. Third company was fine as it was no public but still need to have safeguard etc. Q5) It was going concern. a) not enough audit evidence was collected and out firm mostly rely on client's generate evidence b) i have suggested some audit procedures and conclude that company is not going concern c) client mentioned materiality uncertainty. So i said i will still mention this issue in KAM and give adverse opinion. I know my answer was wrong. I think emphasis paragraph would be better option/

I wrote on the quality of evidences gathered. Then wrote additional procedures to further verify going concern implications. Lastly I wrote about the report implications in which I stated that KAM should be given due to the "close call"

It said there was a material uncertainty that was adequately disclosed in the notes..therefore I think we were supposed to say we shall add a 'material uncertainty relating to G.C' paragraph immediately after the basis of opinion paragraph.

Q1 was fair Q2 was terrible especially part c had no idea what was going on lol. although part a and b their were easy points on quality control such as: auditing standards not being properly applied, not reported to cwg internal control deficiencies etc. Q4: Had run out of time but wrote some points on threats and whether its prohibited or not Q5: Was similar to December exam. however,was not sure on part a what was exactly required. anyone any ideas? Last part i also mentioned material uncertainty para to be added as management disclosed in the notes.

Can anyone tell me whether q5 was based on a listed company?