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

Regarding legal case in Q1 (at the end) I did not have time to write it, but here contingent assets, that should be only disclosed, not recognised, unless there is a confidence that the inflow will be.

@aynat said:
Q1 audit risk- there is no discontinued operation, since there is only plan to transfer the activity? Or I read wrong the task? So far I understood, there is machinery held for sale if the criteria are met. My English in not perfect and when I am nervous- it is even worser than I can. Kindly reply my- there was plan to relocate , or the relocation have been done in the reporting year?

There was a plan to relocate hence provision due under IAS37. I called it as asset held for sale as it referred to the machinery only. However I mentioned discontinued operation as a possible disclosure requirement in the procedures

But there is yet NO announcements have been made to employee, so the criteria are not met for such provision.

Machinery is held for sale if the criteria are met, it is different point. It is likely that they met. But still there is lack of information.

@kbourne said:
You are making me feel better about my script, phew ?

I put about 5 business risks down and only managed 6 audit risks even know probably needed 10 to get the full 20 marks. Hopefully got at least 15/30 plus the 3 professional marks. Procedures were easy enough for sure pretty confident about IFRS5

3 marks for audit risk if it had materiality. Although this is limited to 4 marks for materiality. So I calculated you need about 8 risks so you may have only missed out on 4 marks hopefully.

I think I wrote to recognise contingent asset you need to be able to measure reliably and has to be virtually certain. If it’s probable it’s a disclosure. But am wondering if it still needed to be measured reliably.

Oh well. Might have picked up one or 2 marks

@aynat said:
But there is yet NO announcements have been made to employee, so the criteria are not met for such provision.

Indeed. But we weren’t given the financials either, so I just stated what the requirements of IAS37 were, and that of met, a provision should be recorded. It also wasn’t clear if this had been provided for.

The Ethic was rather tricky. In Q2 I remember it was a listed audit client, and the issue with Tax Computation was. The Code prohibited to do Tax for Listed Audit client.
And there are lots times Auditors were assuming management responsibility. In Q2 and Q3 also ( when where “on behalf of client” and meeting with customers. Although in Q3 non-listed client, to Act “on behalf of client” prohibited – such significant threat to assume management responsibility.

Kindly comment this, who write the same? Or why it is wrong?

@sal2222 said:
I divided by 3 years but after I worked out full cost of scheme.

Yes, of course. (1000*1.7*(1000-150))/3 Yes?

@aynat said:
Yes, of course. (1000*1.7*(1000-150))/3 Yes?

Was it 2.5 FV at grant date or 1.7?and no of employees to taken were 1000.

Overall fair exam, no nasty surprises although after reading some answers in here I didn’t pick up the assets held for sale and discontinued operations, ran out of time, took too long reading Q1, a lot of marks on ethics which I was happy about!
Had a feeling intangible assets would come in and impairment!
Surprised to see audit risk especially as they were tested in Sept sitting.
But overall good exam could have wrote for another 3 hours to be honest!

Here’s the risk I identified

Foreign Subsidiary
Opening balance
Restructuring cost
Held for sale
Share based payment
Capitalization of construction

Which other one did you identify?

@syeduzairnaqvi said:
Was it 2.5 FV at grant date or 1.7?and no of employees to taken were 1000.

at granting date 1.7.

@ezehrobinson said:
Here’s the risk I identified

Foreign Subsidiary
Opening balance
Restructuring cost
Held for sale
Share based payment
Capitalization of construction

Which other one did you identify?

I missed capitatization of construction and was hazy on held for sale! I did also have:
Business strategy – not well thought out, move away from traditional luxury customers to mass market
Raw material prices – likely to go up, pressure on margins and do need to ship out to new factory
Employees – being skilled are a key resource, would new employees have the same level of expertise

But I found it difficult to quantify things for Audit risk – can anyone remember how many marks were for Audit Risk?
I can’t make up the 50 marks breakdown for Q1.

Also for audit risks I did :

– new client
– assets held for sale/disc. operation
– development and research capex
– inventory – possible impairment due to flood
– share based payments
– listed client : possibility of earnings management/ additional disclosures
– FX (this one was a long shot…)
– revenue and operating expenses poss. misstatement
– possible impairment of investment due to drop in revenue
– possible provision for redundancies – it wasn’t clear if they will be announced in that year so just said if announced then provision should be booked

anyone had anything else?