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

Yeah i’d say youre right , i just said theres a risk that it should be treated as an associate but its not. didnt develop the point further as you did.

@dennis98 said:
Any thoughts on the cash settled share based payment one?

IFRS 2 Share based payment. I f*** up! As as left the exam I started to have a foggy memory or treating part of it as liability and part as equity. I really don’t know!
I think that was the hardest one!

@danyjethwani said:
18 mark question left.. time was so less and requirements were so much

It worries me that there is the same response after every sitting of this paper.

Your aim at every sitting is to write 100 marks worth of content.

Too many AAA students see 6 pages of scenario and panic. You probably need to read less than half of it to get full marks.

@dennis98 said:
no worries. is it true to say for a groups question (question 1) there was almost nothing to say that was groups related ? except to confirm that Bronte is not an associate, to confirm that they have 18% but dont have significant influence

Bronte was not an associate and was measured at cost, however as per IFRS9 it should be valued at FV at the reporting date. Any one has any disagreement please discuss?

For the ethics part i think they cant provide the non audit service as they are listed company, besidea design and implementation of the system is the presuming management responsibility

Why the related party transactions are hard to discover?

Becoz they are not self evident, always conceal by the employee and they are always not under arms length transaction, meaning lower price than at normal cause of business

@eneltonsatria said:
I thought the paper was relatively easy. I self-studied for AAA. I spent about 2 months studying this paper and I bought second-hand notes from Carousell. I rewrote the entire textbook in bullet points (my technique to understand the concepts), used it to review nearer to my exams. I also printed ALL technical articles and read all of them briefly (wrote small notes). I also reviewed some of the exam papers and I paid more attention to the latest papers with the new syllabus (Sep 2018/Dec 2018 Q1 especially) (which is of significant help).

[Below are my thoughts on the different questions. They may not be correct!!]

Q1.
Business Risk and RMM (30marks). This was very similar to Dec 2018. If you take a brief look at the answer key, you could actually use some of the points and structure there. There was a trick to the financial figures given I believe. The 20X9 figures are 10 months prior to the YE, thus when looking at SOPL items, you may need to be more careful.

Ethical issues (6 marks). The audit committee wanted the old auditor to develop the new payroll system AND also help out with the audit for payroll -> obvious self-review threat. I stated that they can help with the development but the current auditor (given that they have the resources) should still complete the audit for payroll. Then, the low-fee could also pose another ethical threat.

Related-party transaction (10ish marks). Why is it hard to identify such transactions?
– Complex group structures
– Poor disclosure
– Poor internal system at identifying new related party transactions
– Poor authorisation process for significant items
There is a CPD article on this: https://www.accaglobal.com/an/en/member/discover/cpd-articles/audit-assurance/related-parties15.html

Q2.
(a) Critique the report. Some points i came out with:

-Missing title, addressee, signature, date of auditors report
-Order of opinion and basis for opinion
-Opinion paragraph: did not state what opinion was given?
-Material uncertainty for GC: shouldnt this be a KAM instead? Does failure to get loan financing cause a company to have GC problem? No alternatives of financing? What did auditors do to confirm this? These details are not explicit in the paragraph.
-Missing KAM which is compulsory for listed company
-Basis for opinion paragraph referred to responsibility of auditors paragraph, which is missing

(b) Communicating with those charged with governance
There is a technical article that explains about this. But for all 3 matters that are shown in the exam, I reasoned to communicate those matters to those charged with governmance.
https://www.accaglobal.com/sg/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/auditors-reports-governance.html

Q3.
(a)
If you read the technical article, this 8 marks could be easily gained.
Link:
https://www.accaglobal.com/sg/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/iaasb-ed.html

(b)
The remaining 17 marks.
This is a useful technical article to guide you.
https://www.accaglobal.com/sg/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/audit-of-estimates.html

To answer RMM questions, there was also a technical article to guide you how marks are given.
https://www.accaglobal.com/sg/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/exam-tech2.html

Please let me know on your thoughts and whether you agree/disagree with my answers.

Cheers!!

I think missing addressee and title ar e irrelevant point as the question already stated that the report is from extracts….

Q1. Was tricky i guess, business risks I included Foreign subsidiary hence exchange risk, lost customers 200k of them, reputation risk, penalty risk ongoing investigation, revenue per month drop relatively, i computed market share to market leader which showed improvement ?…… AUDIT RISKS included 1.investment propert to be accounted for under IAS 28 Investment property due to significant influence presence of seconded Exec director, loan financing..then income to be separately disclosed…. 2. Elimination of transactions on consolidation of the two subs 3. Subidiary valued at 5.7m but recognised at 4m in our books????!! Impairment review needed……. 4. Another point on 4m minus 3.06 i forgot contents….. 5. Provision for ongoing investigation could be material

ED 540 requires an auditor to classify risk depending on whether high risk or low risk depending on materiality….. Then for low risk follow presious standard approach and for high risk a more rigourous approach is required…. and performance of the audit with high professional scepticism. i read this the night before the exam ? Hoping it scores me a few marks out of 8

Ethical issues self review threat may be use an independent partner review or separate team, management responsibility decline to accept engagement as risk cannot be reduced to an acceptable level, intimidation by client to reduce fee and timing of audit. For listed entity restricted to perfom othe services so may need to decline.I may right or wrong but hoping for a Pass, only paper remaining

@pamelaissangya said:
Ethical issues self review threat may be use an independent partner review or separate team, management responsibility decline to accept engagement as risk cannot be reduced to an acceptable level, intimidation by client to reduce fee and timing of audit. For listed entity restricted to perfom othe services so may need to decline.I may right or wrong but hoping for a Pass, only paper remaining

i agreed with u i just want a 50……. 🙁 this is my last paper and i dont want to resit but i start revision already in case anythg happens…. >_<

but i m not agreed on the new client, as it is not. i remember the firm had an audit partner with the group 7 years already and the rotation should be taken place but the new comer was ill, so ensure the quality of work the existing auditor can extend for one year to maintain the quality of work.

@dennis98 said:
no worries. is it true to say for a groups question (question 1) there was almost nothing to say that was groups related ? except to confirm that Bronte is not an associate, to confirm that they have 18% but dont have significant influence

Im pretty sure that was put in to show that Bronte wasnt part of the group. As for Bronte, i think substance over form would mean they are an associate and should be equity accounted.

@walldlao said:
For the ethics part i think they cant provide the non audit service as they are listed company, besidea design and implementation of the system is the presuming management responsibility

Why the related party transactions are hard to discover?

Becoz they are not self evident, always conceal by the employee and they are always not under arms length transaction, meaning lower price than at normal cause of business

I wrote same.

Do you mean bonte was an associate?