AAAACCA Paper AAA exam was - June 2021 Exam - Instant Poll and comments

The same paper I had. But mostly question (company named) Dolphin seemingly was given to other students. In general was not an OK paper but not very hard either. The tricky parts were that some of the questions already beforehand indicated that for instance in audit risk, the group has the same currency, the same reporting period and etc. by this way limiting your choices to write about IAS 21, and or requirement for consolidation. Again in other questions the same approach was applied i.e. they know that students already accustomed to some sort of answers during past papers revision and in the beginning they start indicating and eliminating those items by saying all of them already checked by auditors and are ok, so regular parts where students could get some easy marks based on their experience with past papers were tried to be eliminated by examiner and trying to focus on more difficult items.

Exactly, I thought there had to be missing information- certainly was not worth 24marks!

I got 9 but I could have added related party risk and potentially fraud risk even the integrity of the client. I noted down the following risks: - Revenue recognition - Associate/Investment - Impairment - Loan - intragroup trading - control risk - foreign exchange - Intangible asset (broadcasting licensing) - and one more , forgot which one

Agreed, but was tricky I guess, the examiner should just write audit risk and thats it, Anyone did ROMM - risk of management bias? Since company was listed, and was not doing well I think , no amortization and impairment was taken, so I suppose there is this general risk? Also non disclosure of related party transactions, would that be a risk?

*amortised :)

Lola wrote:Exactly, I thought there had to be missing information- certainly was not worth 24marks!

emwitton wrote:thirthy wrote:I think that the approach in this paper was different than the past exam papers, for example in audit risk question there was a disposal and not much else, what does the examiner expect, a different phrase on every possible aspect of a disposal? This seems to be milking 1 issue for 20 marks which felt to me the unethical thing to do as i felt that in previous attempts such an approach would have been frowned upon (at least based on my understanding). I am looking forward to examiner report. From the start 3 possible risks were crossed out by the examiner (all companies in the group have the same year end, same currency and report according to IFRS) so you would have to go ahead and make up something else for some marks I guess.<br>Although I am pretty good with the computer, I found myself struggling in question 2 going back and forth trough 3-4 exibits to calculate materiality and at some point i knew i saw more info somewhere but no time to go trough 3 exibits again (which would again make me struggle to return to the more relevant ones while time is running out) so nevermind…<br>I would also like to add that many of us do not work on small screens or only with 1 screen anymore in the REAL WORLD (i have not worked on a screen this size since 2010) so if ACCA knows we will be sitting exams on 1 small screen to cut cost, then reduce exibit number. If you do not want to reduce the number of exibits, then less questions would be fine as well.

The scenario and the exhibit hints you what the risks are. Generally every single line of the exhibit could reveal a ROMM however the question asked for significant risks. So the first thing is to calculate materiality. However the period covered was for 10 months so this needed to be extrapolated. Control risk would be Sig as it is a 1st year audit. And so on

Chris777 wrote:

Lola wrote:Exactly, I thought there had to be missing information- certainly was not worth 24marks!

From your previous comments, it seems you had a different exam to us. Was yours about Home Co, Near Co and Far Co? Or was it the Dolphin Co question?

emwitton wrote:

Chris777 wrote:

Lola wrote:Exactly, I thought there had to be missing information- certainly was not worth 24marks!

yes i got the Dolphin question. Sorry, I should have mentioned it.

Was the procedures/matters to consider on investment property correct? It was 8 marks and changed from cost to Fv. Should this go to p&l or oci?

Also anyone remember procedures on due diligence for the employee redundancy provision and reduction in production costs - Q3?

TazSK54 wrote:Also anyone remember procedures on due diligence for the employee redundancy provision and reduction in production costs – Q3?

I have also asked the same question here.

Omg yes!! I was stressing out about this on the way home that I didn’t put enough materiality calcs in my answer ? but it was so hard to do because also the revenue and assets given were for 10months?! Literally hadn’t come across this in any past papers! ?

It is really length and difficult. It is harder when attempt by CBE :(

Nadia wrote:I also got the Dolphins Group Q1 From what I remember I included the following RoMM:<br>-new client – opening balances and comparatives<br>-revenue might be overstated due to risk that client might be overcharging customers<br>-related party disclosures might be missing<br>-licence accounting – does it need to be depreciated over its 5-year life? It does not seem to have an indefinite life as there are conditions to be satisfied<br>-accounting for the investment – if significant influence can be proven, then it is an associate even if only 18% is owned<br>-control risk with the payroll system – tax deductions might be incorrect<br>-investigation started by the government – does it give rise to contingent liability?<br>-trend analysis – EBITDA 25% decrease vs operating margin – 8% decrease – possibility for understatement of expenses

New client is audit risk, not RoMM

Hi all, Had the Lion Group for audit risks for 24 marks! Honestly, struggled to get those marks. Other than disposal of a subsidiary and restructuring provision it was hard to pick up marks. Most of the marks were for impairment in part B and component auditor in part D. Impairment was not impaired as NBV was lower than recoverable amount and even this was given in the question! :-( Q2 was on management and TCWG and a matters to consider type question but referring to what info would need to relayed to TCWG, strangely worded in my opinion! Q3 19 marks on client due diligence and investigative procedures and 6 marks on ethics and professional issues. There was no audit report at all on my paper which is strange as I was under the impression that this was examined in every sitting! Anyway, don’t feel hopeful, September repeat for me

I would say the potential missing provision for NoClar from government investigation estimated at $240 million at $100 per customer Possible overstated revenue as there was a claim of overcharge of customers and increase year over year for this revenue stream despite trend showings decline in market share and also inherent risk associated with subscriptions as they are recognized over time could be overstated revenue in the reporting period Also extrapolated analytical procedure figures for 20x5 so that it is appropriately comparable to 20x4 as initial 20x5 info was for 10 months only Risk of misstatement in consolidation if fail to eliminate intercompany balances as Oval Co and Coral Co engage in intercompany transactions and risk also inadequate disclosures for related party Possible understated operating expenses if further evidence indicate assessment of indefinite useful life incorrect so they would failed to account for amortization however if assessment of indefinite life correct then risk that impairment review was not done and operating expenses would also be understated There is a risk that the 18% interest together with guarantor relationship and secondment of directors conveys significant influence and therefore the investment on Bronte Co was accounted for incorrectly should have been done under equity accounting as an associate. Further procedures should be done on payroll example increasing sample size due to inconsistencies in tax calculations the individual misstatements should be aggregated to see whether exceed materiality also by nature payroll tends to be material as opportunity for fraud is high

Anyone of u facing photo check in issue? Any technical issue for remote sitting?

@emwitton If you are still around :)) It crossed my mind that what we could have done was to identify a couple of audit risks from the limited financial info available. Just something stupid like revenue has increased/decreased but it could have earned marks Next sitting I'll ignore the scenario for 15 minutes or so and mine the Financial Info for 2-3 risks. If this is the new examiner approach, instead of providing enough points to identify audit risks to just give 2 paragraphs and have you hunt for points around the case scenario so we need to adapt

@thirthy Completely agree with you! Do you feel like you’re going to be resitting? I definitely do after that exam. I feel a little better though knowing it wasn’t just me that couldn’t really pick much out of the exam and it seems it was overly difficult compared to previous papers I’ve reviewed. Does that make sense?

It was the same with me. Had a long queue to get through the checkin process and that processed for an hour and half. It had just flushed the brains by then. They really need to understand the mental stress of the examinee sitting for exams.

Part 1 about audit risk at the Lion Group, I think a big one that I haven't seen anyone mention was to do with stock. Multiple locations across different countries so it may not be possible to do stocktakes at all locations. So you may need to consider alternate ways to audit the stock figures. The cyber security attack meant that provisions were understated by up to 2% of revenue, meaning it was a material misstatement. The cyber attack and could've also affected the sales data, meaning sales could also be wrong so additional audit tests will need to be devised to test completeness. Doesn't seem like the component was doing intercompany reconciliations which could mean the group accounts are wrong once you take out intercompany balances and unrealised profit. Part 2, about what to include in the report to governance really threw me as I didn't really understand what was being asked. From what I understood, the audit adjustments had been agreed by you as the manager and you had to justify these to the Director. I possibly went way off on a tangent but for the switch was historical cost to fair value, I spoke about how the revaluation should've gone to the statement of comprehensive income, rather than the P/L. In addition, the size of the revaluation seemed too much given it was on an old disused warehouse. It brought into question the objectivity of the independent experts valuation. It may have been useful to inspect the warehouse yourself or use your own expert. It was also a material adjustment so could've resulted in a qualified 'except for' in the audit report. Interested to see what people think

Seems like you had the same paper as me! I agree with the investment property gain to SOCI. What did you put for the DD report procedures for employee redundancy provision and the claims of reducing production costs in Q3?

Comforted to know that a large majority found it hard as well. Really challenging paper- exam kept freezing for us all in the exam hall and jumping 15 seconds at a time. We lost maybe 1.5 Minutes - that's a lot of time with this paper! At least I managed to attempt all the question this time -second time lucky I hope- finger crossed There was four 4/5 markers which were testing assertions of valuation, completeness and then substantive procedure around payroll and accruals. the last risk and response article I found hard to identify risks

@emwitton Well i spent 1.5 hours on Q2 and Q3 but somehow I found them quite confusing as well so having lost 30% of marks in Q1 I would have to get a very good result in Q2-3 to pass. I want to say that I passed SBL in first attempt without ever touching an exam revision kit, so I am not someone that cannot interpret case scenario requirements. But the way the questions/requirements were worded confused me a lot. I agree that the paper was not like the previous exams, as an example I got nothing on impact on audit report despite being in an audit exam as others mentioned :)) Seems like the exam questions were specifically designed to fail as many students as possible, I'm thinking that if ACCA would increase exam fee to £450 it would be an outrage. However if you are forced to resit a few times because you were not prepared, the effective fee increases for you.

I put - seek legal advice about possible compensation claims -enquire with management regarding claims being successful -unfair dismissal of those employees -written representation -board minutes For the production costs -analytical review -machine set up times -average labour cost -prior months and trends comparison -reviewing budgets and forecasts I am not sure if any of these are even correct as I repeated some of them as well with analytical review What did u write for part a) 9 marks question about benefits for due diligence? I was scratching my head on that one as I was doing for most of this exam :/

I put most of these as well so I'm glad I'm not the only one. For production costs I thought as well it would be worth looking into the new sales director and what their background is, i.e are sufficiently qualified, do they understanding costing's, overhead absorption etc. Due diligence is useful when looking to make an acquisition/merger as it is basically investigative work. Allows you to find out what assets/liabilities the company has, the regulatory environment, identifying key risks etc. Ideal when looking to make an acquisition like the person in question was.

What exam did you sit? im confused were there two papers for AAA or one?

Umer00007777 wrote:What exam did you sit? im confused were there two papers for AAA or one?

I think there are more questions for the same sitting that get assigned randomly. So you might not have the same question as the person at the next desk, even if you are sitting the same paper and variant.

Hi there Just want to know how can I rebook the exam? which has been closed by proctor 1 1/2 hour before finishing the time. I don't know the reason as I had a word with him and he said he can't see me in video but later he closed the session

kamdarvivek wrote:I put

These look alright to me