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vnetochukwu wrote:I only hope I wrote enough to score 50 as this is my first attempt
The question was , what are the audit risk in the planning stage.
Underneath it had a not that specified only audit risk peculiar to the KPI figures in exhibit 4. I didn’t see the additional note until 10 minutes to the end of the exam by then it was already late and the question carries 20 marks
Weird. Usually all exhibits are used when answering. Sorry for you. What was the scenario of the question?
I picked up
-IFRS 5 Non current assets held for sale and discon operations(depreciation was supposed to seize,assets recognized separately under current assets
-IFRS 15 revenue from contract (risk of early recognition)
-IAS 20 forex translation
-I think there was an event after reporting period
-IAS 36 wrong calculation of value in use
-New audit client
-Management biaslizzyzingel wrote:I picked up
-IFRS 5 Non current assets held for sale and discon operations(depreciation was supposed to seize,assets recognized separately under current assets<br>-IFRS 15 revenue from contract (risk of early recognition)<br>-IAS 20 forex translation<br>-I think there was an event after reporting period<br>-IAS 36 wrong calculation of value in use<br>-New audit client<br>-Management biasAdditional to you except some of them :
Going concern issues
Compliance-ias 37
Bank loan amortised cost
Inventory count
Receivables allowanceAAA INT VARIANT – Okay so does anyone remember anything about the operating License to Matty and the going concern issue what was that all about, the license was to be amortized over 5 years but what about the going concern, was the report to be modified to adverse or just a material uncertainty of going-concern because i remember the revenue of railway was about 60% of matty and the government had revoked the license but the financial statements were not prepared on breakup basis…..
For the going concern issue, it’s a major disclosure that had to be made hence hence the audit assistance was wrong by saying that the statement will not have to be modified.
ATHAR97 wrote:AAA INT VARIANT – Okay so does anyone remember anything about the operating License to Matty and the going concern issue what was that all about, the license was to be amortized over 5 years but what about the going concern, was the report to be modified to adverse or just a material uncertainty of going-concern because i remember the revenue of railway was about 60% of matty and the government had revoked the license but the financial statements were not prepared on breakup basis…..
For the extra hours employees had to work I wrote something in line with NONCLAR ..don’t know if it is right
Also remember writing something relating to IAS37 don’t remember where I placed itThen later I think in question 2 we got ISA402 service organization
For question 1. Audit risk… remember 20m government grants.. half being expensed, new client (detection risk), impairment, related party, new acquisition of 25m??
Business risk, lack on independence from internal audit and no audit committee.Q2) all on audit quality (4 scenarios)
Q3) Rail operating license and customer list and opinion. Think i said adverse opinion should be given due to uncertainty of going concern paragraph not adequately disclosed by management. Think the railway operating license was revoked.
Customer list would be classified as a intangible asset and should have an impairment review annually due to loss of 2 major customersI’m not sure what you are talking about.. maybe you had a different paper but as far I’m aware the audit risk was based on the whole scenario? Was your paper based on Timber?
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The case study was showing a bit change in exam scope but had accounting issues e.g IFRS 5, Revenue, Impairment, Going Concern and provision aspects for the audit risk. There a lot to discuss I believing addressing all would have not allowed to cover other parts of the paper so I relied on 10-12 parts 1.5-3 markers. It’s the second session they include business risk as well
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There were loads of marks for IAS19-10marks and IFRS2-7 marks in question 2 I think
I answered same but then I realized that there was a not below specifying that the audit risk should only consider KPI in exhibit 4. Am I the only one that say it? It was the timber question too
lizzyzingel wrote:For those who got a question on the Luxury canal boats..what business risks did you identify?
cash problems(a few type of)
Fx
Inv ?n transit
Compliance(2 type)
No diversification of productsOk I got ;
Luxury product, New regulations,Going concern, Foreign market problems(forex,political,boarder sunctions,fuel prices)NOO. you must have understood it wrong, the note stated to include some kpi’s as audit risk not the whole thing from that exhibit, rest every exhibit needed to be used. So chill, you’re safe. 🙂
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I had client in international restaurant industry in Q1, needed audit risks. Did anyone else feel like they missed the main points? I did mention around 6 risks but they didn’t feel ‘significant’ so doubt I’ll get the marks.
vnetochukwu wrote:I answered same but then I realized that there was a not below specifying that the audit risk should only consider KPI in exhibit 4. Am I the only one that say it? It was the timber question too
I did the timber question as well but I don’t think the audit risk would relate to only KPI in the exhibit 4, because a) that 3 KPI will not carry enough marks for a 20 mark questions; b) the main body of the entire question is exhibit 3, which carries some of the most commonly seen audit risks: new client, ongoing legal case, the reduction in the value of the timber plantation (which the audit risk question specifically ask you to consider this risk), revenue trends, proposed acquisition right after the year-end that should be accounted for under IAS 10…if these commonly seen audit risk are not discussed it is literally impossible to find out enough audit risks out of the KPIs in exhibit 4.
vnetochukwu wrote:I answered same but then I realized that there was a not below specifying that the audit risk should only consider KPI in exhibit 4. Am I the only one that say it? It was the timber question too
From what I gathered from others who also did this question the meaning of that note was to remind you that the audit risks in relation to the timber plantation should be considered only regarding fair value change related to exhibit 4
I could come up with 7 risks. But i am not sure whether i covered significant ones also i am not sure how many risks we have to identify for 25 marks
in timber anyone wrote about the revenue trend? that it increased by 5%, operating margin increase and that the profit increased by 30% this meant the finance costs could be understated?
NCC21382 wrote:vnetochukwu wrote:I answered same but then I realized that there was a not below specifying that the audit risk should only consider KPI in exhibit 4. Am I the only one that say it? It was the timber question too
thats true.
u had to take risks from all over the exhibits.I felt there was also an issue with total assets value in KPIs, there was a discrepancy in the break up given.
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