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

@mjibola said:
Did anybody notice that the first case of the subsidiary in Q1 literally had little or NO information on RoMM?? Everything written about the subsidiary was just about a single line on their principal activity and nothing much of importance, I think.

The other two subsidiary actually had More details and more points to talk about!!

I think the matter there was that the year end was different from that of the group. It had November year end whereas group had a December year end.

Guys, I wrote a song RoMM that the loan should be capitalised for the part attributable to the capitalised development cost, since it will take 2 years to complete this.

I also wrote that the non recognition of the internal brand name might be inappropriate if the fair value had been reliable determined. I said that although IAS38 says internally brands should not be recognised, that this is only the case if the fairvalue cannot me reliable measured. And if it was correctly not recognised, the disclosure in the notes might not be complete if it doesn’t include the nature of the estimate and basis for the estimate.

I don’t know if this makes any sense.? ?????

Risks that the family members are all members of the board and not independency

Also any e-commerce risk?
The systems are under pressure with growing on the online sales? Control risk?

What do you think? These are risks well to mention?

Thanks.

@Opeyemi, I too think the questions were weird especially the Q2a….then the Q1 answers had nothing to do with Agriculture because the risk, procedures had nothing to do wt the standard. then this is the first diet i havnt seen Ethics pronounced as a question. the Q1d was a little bit of ethics but more of NONCLAR. I pray we wrote enough to pass. Cheer up Bro

@kireeti said:
yup, board struccture gives rise to inherent risk as there ‘ s management bias(iherent risk).This is noticed in dividend declaration, which is 1200.

online sales- wrote about ias 21, recording in incorrect year, commented on offers and risks associated with them, as online sales improved by 90%, but operating margin by only 3%.There could be authorisation not provided for offers.
Also, there was requirement for ifrs 8(operating segments).Rest were directly related to ias 36, 37 and 38.

It is non listing company? How come IFRS 8 opening segment ?

For everyone’s benefit, I will try to pull together what people have said so we have an accurate (ish) representation of what the questions asked. Please comment if you think this is wrong in any way:

Q1

20 marks on ROMM
5 marks audit tests on Development Costs
5 marks audit tests on an impaired building (damaged by weather)
6 marks on use of auditor’s expert (need for one, or reliance on their work, unclear?)
10 marks on impact on audit caused by illegal ingredients, and a bribe
4 Prof Marks

Q2

? marks on Matters + Evidence (??) re a Sub 80% owned, parent bought remaining 20%
? marks on Matters + Evidence (??) re Sub in GC trouble, supported by parent
? marks on Matters + Evidence (??) re sub with different y/e and interco balances??
? marks on criticising a given audit report (client being investigated for some legal thing)

Q3

? marks on pre-tender issues for a DD, where audit also up for grabs for winning firm
? marks on matters to consider / info needed, and procedures to do in the DD

If someone could remember marks breakdown for Q2 and Q3, that would be helpful.

@opeyemiogunjimi said:
Lol. Everyone saying this exam was fair. I am not too sure if we too the exam. I prefer Dec and the older exams 10times to this one. It was sooo time demanding, I was writing asif my life depended on it. The questions were so wierd, like zero information in the case and they were requesting us to identify matters and risks with nearly no information. I was seriously confused by the way they asked questions, nothing like before. And then again, they bring up reallly technical and complicated accounting standards. I just pray I wrote enough nonsense to scare me a pass

Could not have said it better myself!!!

the words you use are not that important, as long as you are specific and explain WHY you need each piece of information (it is the WHY that most students leave out, and which is one of the main reasons the pass rate on this paper is so low every time).

As a marker I would want to see something that included the words “supplier contracts” and “to see how tied in the target company is, whether terms would vary on a change of ownership” etc.

@seishirou said:
If the factory is damaged and ceases its operation, should it be de-recognized from the Company’s fixed assets? Does anyone have similar points?

If the factory has no lasting use then yes, derecognise. If it is very damaged it may have zero value at all.

in q3 1) did we have to consider pre-tender issues like fee and pre-conditions of audit?

Guys when they asked us to evaluate in question three of as it necessary to talk about safeguards? Also for the email in relation to the bribe I put that the auditor would need to take legal advice since the email not be credible also the confidentiality issue. I was confused about speaking directly to management since it may not be true and also if it weren’t true and we spoke to client could they potentially sue us for inserting. Any thoughts guys? I don’t feel very confident about my answers.

Regarding the impairment calculation, as per IAS 36, Cash flow projections should relate to the asset in its current condition – future restructurings to which the entity is not committed and expenditures to improve or enhance the asset’s performance should not be anticipated. So, the value in use in the question was based on these contingent considerations. Therefore, the real impairment -in my opinion-was bigger, due to the real value in use which was lower than the value given in the question.

@loredanafeodor said:
Regarding the impairment calculation, as per IAS 36, Cash flow projections should relate to the asset in its current condition – future restructurings to which the entity is not committed and expenditures to improve or enhance the asset’s performance should not be anticipated. So, the value in use in the question was based on these contingent considerations. Therefore, the real impairment -in my opinion-was bigger, due to the real value in use which was lower than the value given in the question.

impairment was claculated based on value in use (which was based on assumptions, plus costs to bring factory to working conditions were just estimates). this part i figured out, but messed up a lot with calculations. +2 points for risk, -4 for presentation 😀