AAA*** ACCA Paper AAA December 2019 Exam was.. Instant Poll and comments ***

Guys, management discussion on misstatement what you stated?

Nothing unexpected. A lot of marks for ethics. Bus risks and audit risks.

I struggled with time, and Q2 part A which I wrote utter nonsense. Way More marks for ethics than I expected which is usually easy to score well in. Fingers crossed for a pass!!

Was pleasantly surprised with that exam! wasn't expecting it to be as straight forward a few tiddly bits but hopefully a good pass - answered everything in full with 10 mins to spare :) Good Luck everyone!

Had a feeling business risks were going to come up. 2nd sitting and I feel more confident. A lot of marks for ethics which had me worried, apart from the bog standard knowledge, threats, safeguards, acca code of conduct, don't know what else I should have expanded upon. Can't complain about the paper, felt relatively comfortable throughout. No nasty surprises.

would say I struggled majorly with time on this one, and not sure I wrote enough for the audit and business risks. Found question 2 quite tough and not convinced I wrote enough for q3! Overall not too great!

Anyone able to advise what they did with the Exhibit that was a graphical representation of preliminary analytical procedures? All I was able muster up was that the jump up in revenues and profits was abnormally large in 20X4 and that additional substantive procedures should be performed?

Any problem with poll....is it working?

Umm not quite sure what to make of that! It wasn’t particularly difficult, but not sure I really ‘got it’, so left wondering again! Q1 lack of data threw me a bit and definitely didn’t write enough for audit risks. I used graph to emphasise must check opening balances and get working papers from previous audit. Q2 I left to last and had to do v quick notes, I think this was probably the easiest qu. Q3 was ok from what I remember! Client integrity lacking, preconditions All a blur now, anyone remember qua? Good luck all. This is my last exam and annoyed can’t celebrate as just don’t know!

@kbourne said: Anyone able to advise what they did with the Exhibit that was a graphical representation of preliminary analytical procedures? All I was able muster up was that the jump up in revenues and profits was abnormally large in 20X4 and that additional substantive procedures should be performed?

Didn't do much with it asides note that revenue and profit growth were going in opposite directions.

Thought exam was fair, but an awful lot of text to absorb, left about 20% undone and would be sure of passing had I had another 45mins. I must be a very slow writer, or thinker ;-)

@ezehrobinson said: Can anyone remember the ethics question for question 2?

I think that was about the discovery that the firm had done some work for the client, plus the audit senior suggesting that the firm could word the presentation of the sugary drinks issue in the annual report to say it in a positive way, and then suggesting that the tech dept could do the narrative for the annual report. I think I took from it all that there was threats re self review, self interest, advocacy, assuming management responsibilities and a quality control issue at the firm since the audit team didn't know about the other work.

@ezehrobinson said: Many thanks for this I wrote same thing as you.

Here's hoping that we get points for it! What did you write for your opinion on the audit report? I ruled out disclaimer because it wasn't about being unable to get enough evidence, and so that left qualified or adverse because it was about the financial statements, and concluded that the opinion should be qualified except for... rather than adverse.

I managed to answer 90. But I am not sure whether my answer makes the marker hsppy to award me only 50 marks that's is what i want... My past ACCA exam trend, If i answer less than 80, My passing rate/ frequency goes up. But If I answer 80+ marks in the exam i never passed. Surprisingly sad but true.

Which Qu was this, the one asking what extra info would be needed?

Q3a was about the matters to query with manager about intangible assets And part 2 what additional information needed on their financing

Overall good paper, however, if you did not have time pressure then you should be worried about the quality of your answers. I managed to cover about 85% of the paper and am confident of a pass

@ezehrobinson said: Mind sharing how you answered it?

I struggled with the intangibles part. The requirement asked for 'specific' questions to ask management and there wasn't much to glean from the info (unless I totally missed it), so I said inquire about any known or suspected breaches of the licensing regulations and for the patent - was there any new technological advances or processes that management was aware of that might affect the value of the patent.

Did anyone one write on assets held for sell on the machinery held by the West mill in question 1?

@lizzyzingel said: Did anyone one write on assets held for sell on the machinery held by the West mill in question 1?

Yep i did. It was an audit risk but also the procedures in part c(i) related to that. Stated it was material and possibly overstated if fair value estimation not accurate

@ezehrobinson said: I struggled too on that question. How about the second part on Financing?

For financing I added; Venture Capital - are there are any terms or bonus targets which may impact funding or result in additional costs Loan - are there are covenants which could be breached risking PPE D/E ratio compare to prior year, has Gearing deteriorated?

Anyone say that the hedging misstatement was not material? I calculated it at 0.1% of Revenue/assets, so not material, but I concluded audit opinion was still qualified in aggregate. Anyone else?

@kbourne said: Yep i did. It was an audit risk but also the procedures in part c(i) related to that. Stated it was material and possibly overstated if fair value estimation not accurate

Yes, I did too under IFRS5 reporting as a discontinued operation.

@ezehrobinson said: I struggled too on that question. How about the second part on Financing?

I thought that was easier. * Equity Shares: get the detail to confirm the T&Cs of them to rule out any buy-back etc * Loan secured on PPE: Get loan agreement to see what the conditions are and find out which assets it's actually secured on. * Venture Capital: Get the agreement to gauge what risks are involved. That was my general gist of them.

Business Risks-dependence on local farmers,international trading risks,Brand power threats,legal case, Redundancy...???

@lizzyzingel said: Business Risks-dependence on local farmers,international trading risks,Brand power threats,legal case, Redundancy...???

What did you make of the legal case? It was the company taking others to court. It's usually the other way round, so it kinda threw me a bit.

I had Modified (material misstatement), not modified (immaterial misstatement) and Modified (for luck of disclosure of contingent per IFRS requirement).. In that order :)

What was the treatment for share based payment plan in Q1? Mine was 1000/2/1.7 = 294 * 850 employees ( 1000-150 ) = $250,000 expense (material to profit and loss) should be recognised over the vesting period and calculation should be based on the fair value of share options at grant date so there might be a material misstatement that management does not take at grant date resulting in misstatement.

I calculated 1000 options * 1.7 FV * 1000 employees=1700000/1000000 to convert it into millions so got 1.7 and it was material so recognise the expense over the vesting period.

Oh no. After reading all these comments I don’t feel as though I have written professionally enough or covered enough area to obtain a pass. Everything I commented on was pretty obvious and basic and definitely didn’t write enough about the audit risks. I really struggled to find them. Ethics was fairly straightforward but now I’m questioning whether I did that well enough!