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Q1.
a) Audit risks,
b)Audit procedures relating to Group revenues,
c) cant recall
d) use of data analytics for audit workQ2.
Evaluation of issues (Sale of division after Year end and nit disclosing this information, First adoption of IFRS16 and not disclosung the information about the change in Accounting policy) on completion of Audit work and actuons to be taken;
Assuming the issues not corrected what is the impact on auditor’s reportQ3.
Comments on planning of audit, ethical And professional matters during quality control review and further actions if necessary
Evaluation of issues to be considered before accepting the Audit of the GroupQ1) a) audit risks 26 marks
b) 5 audit procedures relating to degment reporting
c) matters to consider before accepting to report on company’s environmental and social reporting
d) benefits to data analytics2) a) quality controls planning and performance evaluation and quality control ethical and professional issues evaluation
b) matters to consider before accepting engagement of a new audit client involved in bribery and foerign operations3) a) comment on matters and recommend firther actions of (i)selling of a CGU but not disclosing ifrs 5
ii) new adoption of ifrs 16 and not disclosing why the policy change
ii)Impact on audit report if not adjusted
b)i) auditors responsiblity regarding the other information and consistency of chairman’s statement and the actual performance
ii) impact on audit report if not adjustedI’d say overall this was a relatively easy paper.
By the way anyone attemped in Saudi Arabia?Familiarty and self interest for the engagement partner as audit fees was 250k and ither service he provided had a received 890k xD
Plus been 8 years since he’s the partner on this engagementThe last question on sales of division and change to IFRS16 and their impacts on opinions really threw me off.
I honestly felt ready but saw those and genuinely didn’t know what to write.
Also the audit risks question was like 28 marks that’s a lot! I wrote give or take 10 risks so can only hope thay were enough.
For me, it was definitely difficult.
What I can recall
3(a) 1. Listed client with same audit partner for 8 years, familiarity threat, should be rotated every 7 years.
2. Audit fee is $250,000, $890,000 so called “special procedures” fee unexplained by partner just stating no threat to objectivity, again listed client a lot of non-assurance services should be prohibited so nature of service to be identified. The non-assurance service fee is around 3 times the amount of audit fee, lucrative non-assurance service can create self-interest threat and the materiality of this service fee should be assessed and not just based on partner’s comment.
3. A newly promoted audit manager input 36 hours in the time sheet and signed off as final reviewer while a senior manager contributes 6 hours only. The audit manager being newly promoted is unfamiliar with her new role and will require direction and supervision/review which should be provided by the senior manager.
4. Audit of going concern is performed by audit associate who simply follow last year procedures and ask for management’s review.
An important part of quality control is assigning tasks based on competency and experienced. Associate is not likely to have the knowledge and experience to challenge management assumptions and audit of GC involves significant subjectivity so should not be assigned to associate.
Part a contains 15 marks so I believe I forgot some points.Q1
a) Audit risks( maintenance or upgrade,related party transaction,indicator of impairment of license,segment reporting of food and beverage, control risk cyber attack,borrowing cost ,etc)
b) audit procedure for the segment reporting
c) advise how to measure the social and environment information,which will report to regulation….etc
d)benefit of use of data analytic for audit workQ2
a)evaluation of 2 issues.and implication on completion and impact on audit report
(Sale of division after year end,IFRS5 ,discontinued operation,discloure,possible of smoothing profit)(change of IFRS 16 about not reference the change of accounting policies ,IFRS 1 ? not sure)
b)responsibility of auditor in other information& impact on auditor’s report
2 inconsistent (first is stating that the division which will sale next year will continue to grow better performance,second is statement about they claim that they all using recycled paper ,which is not in case)
also claim that auditor has confirm their view in something …….in chairman’s statementQ3
a)Comments on planning of audit, ethical And professional matters during quality control review and further actions
(going concern let junior do,partner involved only 2 hours in whole audit,manager claim her work is final review,partner become eighth year of the listed company,partner’s suspicious behaviour with clientb)Evaluation of issues to be considered before accepting the Audit of the Group
(low fee as possible, 60% is foreign subsidiaries which we won’t audit it, given one remote foreign business but not company not subject to audit,2 media claim that the integrity probably not good-incentive payment which maybe corruption,another forgotWhat answers did people put down for the following questions;
Q1b) Audit procedures on the operating segment revenue.
Q3b) What is auditors responsibility in regards to chairmans statement and auditors report.
Q3a) regarding the change in Ifrs 16 policy, did people say that because no disclosure then must qualify opinion.
3(b) The other is protest against the Group’s operation polluted the forest I think.
What answers did people put down for the following questions;
Q1b) Audit procedures on the operating segment revenue.
blank,no time to go backQ3b) What is auditors responsibility in regards to chairmans statement and auditors report.
identify material inconsistent of other information with audited financial statementQ3a) regarding the change in Ifrs 16 policy, did people say that because no disclosure then must qualify opinion.
the lease is material in paragraph, not reference is mistatement, material mistatement ,qualified opinion.Who else could not complete their remote based computer exam? I feel terrible. The software would not navigate to the next question and the proctors had to revoke the exam
Well idk if what i wrote is right or wrong but for procedures i just stated to analyze the break up segments and asses their completeness and all that
B)statement that management is responsible for other info and that the audit opinion does not cover the other informationC)i stated because of the nature of the disclosure not stating in notes would make it a material misstatement so a qualifed except for opinion
10 marks
I just wrote it’s gonna be a managment role issue and self review issueHey Binc ,my remote exam didn’t start itself and I don’t even know the reason , because all the verification process was complete, and stable internet connection too , but the exam didn’t launch ,I waited for 1hr from my appointment time and xam didn’t even launch ?
I wrote these:
1.Since it is new regulations and management have no understanding of it may be reluctant to make any decision on their own and may rely on auditor’s advice, so we must be careful not to assume management role.
2. Again it is new regulations and we must review whether we have the expertise and up to date knowledge in this area.
3. The reporting has tight deadline so we must ensure we have the resource to complete it on time for example through temporarily transferring staff from other assignments.
4. The management is willing to pay high fee due to the tight deadline, we must consider possible self-interest threat.I just attempted first part of q1 and there was unexpected technical issue exam was revoked dont know what will happen will they reschedule exam
Hey my exam didn’t even launch due to some technical issue , let’s hope they’ll possibly reschedule in next week because many ppl faced technical issues or else we should wait till December I guess..
4th time I sit this exam, it is the most difficult exam I have seen due to its length and requests.
It is a nightmare ! The more we move forward in time, the more this paper is difficult.
Time management was critical although the expected answers were not difficult, it was too much time consuming to properly plan and write the answer even when limiting to the marks !
I did all the past papers, none are as difficult as the two of 2020. This one makes no sense at all in terms of expectations from ACCA. It is disappointing…1)audit procedures : totals of segment must be cast.. Threshold recalculate… Review whether codm reviews the perfoemance of them… Etc etc
2)auditor has responsibility to read other information and look out for inconsistencies. Should establish what is wrong- the financials or the directors statement. If the statement not changes, no impact on the audit opinion but auditor should mention the inconsistencies in the ‘other information’ section.
3)new policy-disclosure requirement, and the financials to be restated for the previous year to allow comparability. Leases are material (was told in the question) and if not adjusted would have to qualify the opinion
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