September 7, 2020 at 11:03 am #583772opentuition_teamKeymaster
September 7, 2020 at 12:00 pm #583779MohammedParticipant
What topics came up in the exam
September 7, 2020 at 12:04 pm #583780francois988Participant
Anybody finished ?
September 7, 2020 at 12:08 pm #583783francois988Participant
I mean finished the paper
September 8, 2020 at 2:12 pm #584104
No. I was annoyed with myself because I messed my timing up. I thought the content was ok but difficult to get through in the time available.
September 7, 2020 at 12:17 pm #583787bigmanJJParticipant
What came up in Question 2 and question 3 for you guys?
September 7, 2020 at 12:20 pm #583788PaulinaParticipant
a) Audit risks,
b)Audit procedures relating to Group revenues,
c) cant recall
d) use of data analytics for audit work
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 report
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 Group
September 7, 2020 at 1:07 pm #583801bigmanJJParticipant
What were the ethical and professional matters which came up?
September 7, 2020 at 2:09 pm #583813
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 engagement
September 7, 2020 at 8:46 pm #583932
What version did you do, int or UK? I don’t see or remember this point at all
September 7, 2020 at 2:10 pm #583815
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.
September 7, 2020 at 2:07 pm #583812
Q1) 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 analytics
2) 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 operations
3) 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 adjusted
I’d say overall this was a relatively easy paper.
By the way anyone attemped in Saudi Arabia?
September 7, 2020 at 2:34 pm #583830alikashif1994Participant
What were the marks for q1 part 3 and any suggestion About ansr?
September 7, 2020 at 2:37 pm #583832
I just wrote it’s gonna be a managment role issue and self review issue
September 7, 2020 at 2:54 pm #583835
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.
September 7, 2020 at 3:44 pm #583849waqavelliParticipant
Hope you and everyone else passed the exam. What advice would you give for sitting the AAA exam? I am looking to sit AAA in December alongside possibly SBR so any advice/tips would be much appreciated. Thanks in advance
September 7, 2020 at 8:35 pm #583927kulorexParticipant
AAA is 90% technique and 10% new knowledge. the other knowledge you must have got via AA. AAA is about technique in answering questions. There is a pattern in answering AAA. By just reading the text, you will not get this. So please please don’t waste your time like I have. I am confident I will pass this time.
September 7, 2020 at 2:09 pm #583814
The 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.
September 7, 2020 at 2:12 pm #583816
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 work
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 statement
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 client
b)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 forgot
September 7, 2020 at 2:17 pm #583820
3(b) The other is protest against the Group’s operation polluted the forest I think.
September 8, 2020 at 1:28 am #583984
Can we approach Q1. (c) in the form of Audit of Performance Information? Social and Environmental Information?
September 8, 2020 at 6:41 am #583997
Q1 c Whether to accept the engagement, which is how to measure that information , just ethic issue, competence, deadline is one month… Etc
September 7, 2020 at 2:15 pm #583818
What 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.
September 7, 2020 at 2:34 pm #583831
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 information
C)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
September 7, 2020 at 3:23 pm #583844
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
September 8, 2020 at 1:29 am #583985
Yes they have to qualify their opinion as they are not making appropriate disclosure according to IFRS 16.
September 7, 2020 at 2:18 pm #583821
What answers did people put down for the following questions;
Q1b) Audit procedures on the operating segment revenue.
blank,no time to go back
Q3b) What is auditors responsibility in regards to chairmans statement and auditors report.
identify material inconsistent of other information with audited financial statement
Q3a) 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.
September 7, 2020 at 4:04 pm #583859
Q1b) I wrote inspect a sample of revenues back to customer bookings to confirm dates of bookings and that the revenue was recognised in correct period.
Confirm bookings to the cruises logbook to confirm the customers did go on cruise
Q3b) auditor is responsible for checking the other information is in line with FS and is factually correct. They need to required the report to be changed if not report to tcwg.
The report should not be promoting how well the division has done without mentioning it is being sold. They are misleading the user
September 7, 2020 at 2:33 pm #583829bincParticipant
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
September 7, 2020 at 2:47 pm #583833
Hey 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 ?
September 7, 2020 at 3:47 pm #583850joanaliParticipant
What procedure are there for remote exam ? I will be sitting in AFM plz help me what will be the starting procedure wwhat will Invigilator ask and alll?
September 7, 2020 at 4:06 pm #583860bincParticipant
Please report to ACCA Connect. No clue what other options we have.
September 7, 2020 at 4:31 pm #583865
Yaa ,I have done the same ,let’s hope for the best .
September 8, 2020 at 1:08 pm #584084geniuz999Participant
you cannot navigate to next question unless you scrolled through the whole page.
September 8, 2020 at 2:15 pm #584105
This happened to me in March and then missed out because of Covid in June. Finally able to sit it yesterday, best of luck, we’ll all get there eventually 🙂
September 7, 2020 at 3:07 pm #583841tanzeel11Participant
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
September 7, 2020 at 3:12 pm #583842
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..
September 7, 2020 at 3:19 pm #583843marsouParticipant
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…
September 8, 2020 at 2:18 pm #584108
Agreed, really struggled with the time. I knew time was getting away from me, even though I planned and I couldn’t pull it back. I wonder about answering these type of exams under such time pressure. I think it’s a poor precedent. Surely in the profession we should promote diligence over haste, and the exams should try to reflect real like as far as they can. I’m not saying no time limit, but a reasonable one?
September 7, 2020 at 3:55 pm #583851
What did people write for auditors report implications
Sale of division
( I wrote unmodified emphasis of matter as sale doesn’t effect this years statements)
(Unmodified emphasis of matter para)
( unmodified other information para)
Feel I did something wrong as all couldn’t have been unmodified
September 7, 2020 at 4:23 pm #583863
Sale of division – discontinued operation. Held for sale criteria met. Disposal group assets and liabilities will now be classified as current. No more depreciation after held for sale. The profit or loss from discontinued operation also shown on face of SOPL.
Leases – new policy. Disclosure requirements and the previous years figures to be restated. Leases material hence modify opinion
Chairman – report in other information, opinion unmodfied in this respect
September 7, 2020 at 4:46 pm #583867englandParticipant
It’s so true marsou this paper is something else I been fed up with it to don’t know what they want n examiner wants out of this paper lol I been struggling with it to
There always something comes up in this exam which stop me to pass ?I guess this time was question 3 !
September 7, 2020 at 3:57 pm #583853StamatinaParticipant
international&paper. version was ok .
You had to write too quickly to catch it all. Data analytics I was expecting that to appear and was glad to see it.I struggled.with the procedures on segmental information and the quality control seemed bit odd but ok,maybe because it was the last one I was tired.
a travel group company ,new client with 3 segments.Part a required for 25marks. Audit risks, b. audit procedures. for segmental information around 8 marks I think…. c. matters to consider for acceptance on advice for social&environmental 8 marks. d. 5 marks for data analysis benefits
a. it had a sale on division.
at carrying value of 45m, value in. use. 41m and value to sell less. costs of distribution 42m. Management had made a write down on 41. Division was about to sell August and year end is March. Management does not want to disclose, or has made any other changes. i. consider the matter. ii implications on auditor report.
IFR16 the company has used the ifrs for the very fisrt time and has not make changes on last years figures nor disclosures i. consider the matter ii. implications in auditors report if no changes made. 15 marks
b.Matters to consider on acceptance of a new group client 10 marks.
quality control question
a.given the hrs per partner 2, manager. 8, senior 10 and assistants 130 hours .Comment that assistants had made the most of the work. Partner has spent another 40 hours on specific non-audit. Audit fee 280.000 and specific non-audit 890.000. Unmodified opinion the last 8 years. The last 8 yeas same audit partner.Going concern matter approached by the assistant , who reviewed the 5 major contracts that Management defined and gave her, and reached to conclusion that like past years there is no uncertainty. 15 marks maybe
b.on other matter social & environmental, what are the auditors responsibilities what implication it has if no amendment made and sth else. That’s all I remember. Whoever. remembers more. please share among with answers.
September 7, 2020 at 8:00 pm #583911
Questions 2 for me was about provision for legal claim and leases. I don’t remember anything about held for sale and chairman report etc.. I did the international version.
Does that mean you did the UK one and I am assuming other people did the UK one as the question are slightly different?
September 8, 2020 at 1:33 am #583986
Matters to consider for new group client – Is it going to be the following factors?
Professional Competency and Due care
Or Audit Risk in Group – FX Translation issues, Consistent A/C Policy to be adopted, etc..
September 7, 2020 at 5:43 pm #583877
Hmmm. I sat the international variant but for me Q2 was quality control in relation the group and subsidiary audits and then Q3 was a matters to consider and evidence for a provision and a lease, evaluation of when written representations should be used m, and an audit report appraisal. Anyone else get this? My Q1 was also the travel company with segmental reporting and data analytics in part d
September 7, 2020 at 8:01 pm #583913
Yeh I am wondering the same.. As some of the questions people have put on these comments I don’t recognize at all!!
September 7, 2020 at 8:19 pm #583921
Your Q2 sounds like my Q3. Matters to consider for a provision and lease? And then audit reports appraisal?
September 7, 2020 at 8:45 pm #583931
Yeh that’s right audit appraisal report after. So did the rest did the UK version then? I don’t recognize held for sale discontinued ops unless I completely missed it!!
September 7, 2020 at 9:43 pm #583945
Hey what did you put in your audit appraisal? Their disclaimer was incorrect right? Because 40% of group assets would be Material but not pervasive? Also the other mistakes weren’t so obvious I struggled to drum up marks for this part hopefully I got enough
September 8, 2020 at 12:17 pm #584072carolineParticipant
If you don’t mind me asking where are you located? definitely different uestions
September 8, 2020 at 12:39 pm #584077
@caroline no bother at all. I sat my exam in Dublin as a CBE on the INT variant.
a – Audit risks (travel company) 26 marks
b – Audit procedures – Operating Segment 5 marks
c – Acceptance decision on Social Environmental assurance engagement (Ethics) 10 marks
d – Data Analytics 5 marks
Quality Control issues in an audit of Group and it’s subsidiaries
a – Sub located in Foreign country and outsourced IA 7 marks
b – mind has gone blank 🙂 5 marks
c – Internal control testing not carried out 5 marks
d – Sub failed to account for related party transactions 8 marks
a – Matters to consider + Evidence
(i) Provision 6 marks
(ii) Lease 7 marks
b – Reliance on Written representations 6 marks
c- Audit Report Appraisal 6 marks
September 7, 2020 at 5:54 pm #583884
How strict was the invigilation? Were you asked to rotate camera in between exam as it can lead to wastage of time?
I have exam tomorrow. Please reply ASAP
Thanks in advance.
September 7, 2020 at 6:38 pm #583892umaimaahmerParticipant
which time is your exam ?
do share the topics that came question wise.
September 7, 2020 at 8:44 pm #583930kulorexParticipant
The invigilator doesn’t bother you. You pretty much will not notice him/her there. They only come up when you summon them via chat and if need be they will give you a call to the number provided. You are recorded for the entire examination. Before the start of the exam, you are required to take a picture of your front, back, left and right. The only thing is you need to be in a quiet room with not movement. You are allowed a 10min break. Always communicate to your examiner before and after any break. Go only when approved and take less than 10mins. My experience was great and no pressure from examiner.
September 7, 2020 at 6:08 pm #583887kaiyoongParticipant
Long paper, which requires good time management.
September 7, 2020 at 6:35 pm #583891subalingaParticipant
when will results be out?
September 7, 2020 at 6:51 pm #583895
September 7, 2020 at 6:49 pm #583894
I don’t even know where to begin with this exam. I commend those who can remember every question because I haven’t got a clue the second I leave the exam hall haha! I thought the audit risk question seemed harder than the practice past papers. The trickiest bit I think is reading through all of the information given because the examiner tends to put information relating to the same issue in different part of the scenario.
I think it’s hard to know exactly what the examiner wants – the question on data analytics threw me a bit because I wanted to write all I knew about DA but the response was to the audit engagement partner, so they would already know what DA’s is. I did find myself second guessing my answers through the exam and whether I was answering the requirement properly or going off piste.
It’s one of those exams where you can study study study until you have no studying left in you, and it’s still difficult because the amount of reading to do in the exam and the time pressure just makes your mind go blank and LOADS of stuff you learnt barely comes up.
Not too confident I have passed now looking back, but who knows!!
September 7, 2020 at 7:15 pm #5839024321outstandingParticipant
I admire your optimism. I hope you pass. Good luck. I have AFM on Friday. Trying not to panic.
September 7, 2020 at 9:46 pm #583946areissajParticipant
I’m thinking the same thing hope I write what the examiner is looking at least enough to pass
September 7, 2020 at 7:03 pm #583899AnonymousInactive
I am so over Audit. Which is a shame because I can definitely see me being at the resit in December…
I haven’t struggled with time management in the previous professional level exams but it was rough this time around.
First time sitting CBE, didn’t enjoy that aspect of it, think I honestly would have preferred the paper version. Far easier to navigate than trying to look at, remember and respond to several different things at once, on one computer screen. But that’s maybe just me.
Found the exam quite trying to be honest, really didn’t enjoy it at all.
Ah well, all in all, learning experience.
September 7, 2020 at 7:22 pm #583903PaulParticipant
Anybody sit this paper in the UK as computer based? Just wondering how the surroundings were with Covid precautions etc….
I’m sitting APM this Bristol, just looking for anyones experience today?
September 7, 2020 at 8:25 pm #583922
We were asked to wear masks and majority of us wore them, I did remove mine at my desk but put it back on when I moved away to go toilet and when I left.
Otherwise things as per normal.
I would advise organising the screens into different sizes for each question. Put the information in the top half of your screen with the requirement in one bottom corner and your answer page in the other corner.
This helped me to see all screens. I rotated the information screen to whatever info I needed.
It does take a few minutes to set up but definitely saved time swapping between screens.
All the best
September 7, 2020 at 7:24 pm #583904amysnowyParticipant
Anybody take CBE for AAA? I wonder what is the question for CBE exam.
September 7, 2020 at 7:32 pm #583906
For the revenue recognition in Q1 audit risks. What was the audit risk here?
September 7, 2020 at 9:05 pm #583938
Not sure if my answer was right but I said there were deposit and I think another set of payment 6 weeks before cruise takes off. There is risk revenue recognise earlier than when performance obligation is met.
September 7, 2020 at 7:52 pm #583910
Revenue recognition – revenue should be recognized as performance obligations are satisfied. The Company had too simplistic approach recognizing all revenue at the start of the cruise. It should be recognized over time (duration of the cruise) giving that it takes 2 to 6 weeks. Recognition at the beginning may result in cut-off issue.
September 7, 2020 at 8:01 pm #583912
This is what I said too. Phew! There was also something along the lines of employees being asked to sell goods on cruise as that stream of the business accounted for high margins. Any audit risk in that respect?
September 7, 2020 at 8:18 pm #583920lizzyzingelParticipant
Question.1 26 marks
A-Audit risk(Detection risk as is a new client,segment reporting,related parties,revenue, hacked system-control risk,Depreciation ,impairment, consolidation issue regarding acquisitions during the year,license amortization)
B- audit procedures on segment revenues (was not very confident here but fluffed through it)
C-Matters auditor should consider before engagement to provide management advise on social & environmental (I out competence and skills,Ethics,possibility of using expert due to unfamiliar territory,considering if adequate resources) can’t remember what else I wrote.
D-Benefits of data analytics (quality audit,fraud detection,manipulation of data,information that management can use )
September 7, 2020 at 8:32 pm #583925
Was there a subsidary acquired in the year? Missed this risk!! I hate how they said “do not include exchange rate risks” ?
September 7, 2020 at 8:30 pm #583923subalingaParticipant
nobody is talking about analytical review, afterall the draft fs was for a reason, and materiality calculations all the way…. i am hoping to secure marks in these areas, to make up for potential pitfalls from this exam…
September 7, 2020 at 8:32 pm #583924
There was not that many figures given to calculate materiality? The only materiality figure i calculated was for the expenditure of £75m on the ships…
September 7, 2020 at 9:08 pm #583940
I think I did 3 analytical reviews just comparing yoy revenue, operating profit and PBIT. Did use them to identify one risk…
September 7, 2020 at 9:33 pm #583942
Yep I did same and my risk was that increase in operating margin wasn’t correlated with increase in revenue so there may be incorrectly classified expenses. I talked about depreciation too. Wasn’t smart enough to link it to the 6 month acquisition but I said the increase in depreciation wasn’t in line with increase in assets. Hopefully got the materiality marks
September 7, 2020 at 8:33 pm #583926tdiddyParticipant
The audit risk question was very challenging, there wasn’t a lot of background on the question to justify 26 marks and from what I remember there were only 3 flagged issues from the financial information. Although I must say that the rest of the paper was fair but time pressure was the biggest issue.
September 7, 2020 at 9:04 pm #583937
a) Audit risks ( interest repayable on both loan amounts are material and should be capitalised up until ships are ready for use. Risk they will still be capitalised after asset is ready, Licence issue with sub material to revenue, will impact cash flow and revenue projections so risk revenue overstated, related party inadequate disclosure risk, Indicator of impairment for the older ships so assets may be understated and PBT overstated, Assets held for sale/disposal (ships and gym equipment) risk not presented seperately (?), Intangible assets should be also be presented seperately, not as part of PPE, Non-Compliance and weak Internal controls re cyber attack, so possible litigations and revocation of licenses but have to quantify how material this will be, etc)
b) audit procedure for the Group’s revenue (Correspondences to confirm govt intention for the loss of licence to be temporary and any further plans or terms that may indicate when to permit use, Enquire with mgmt re the impact on group’s revenue of licence loss, note down issues that it may raise and how it will impact revenue, Analytical procedure on revenue figure, does it make sense? compare to past years and industry avgs, are mgmt assumptions plausible? (Can’t remember anything else I put now).
c) Matters to consider before take up offer on the social and environment information,which will report to regulation ( Self review if will be audited later, Whether use of the report is appropriate e.g on the website?, Will carrying out the work affect independence and objectivity, possible exposure to legal proceedings as will be perceived as advocating for company as other users may rely on this, reporting on Social and environmental issues may inadvertently lead to Auditors assuming mgmt responsibilities which is prohibited under standards). Was this the time pressured one? I also put did they even have enough staff with the expertise?
d)benefit of use of data analytic for audit work ( No time! forced myself to leave this one to move on).
a) Evaluation of 2 issues.and implication on completion and impact on audit report
(Sale of division after year end,IFRS5 ,discontinued (major) operation, disclosure required as division accounts for over 10% revenue and 10% profits reported and is material. Also, event according to standards is an adjusting event as even though the sale will happen shortly after year end, conditions indicating this already exist right now and therefore mgmt point re next year’s results is incorrect and not compliant. Negotiations are at an advanced stage and already found a buyer so will likely have to derecognise the division shortly as sale is likely now. As will have material impact that will eventually become pervasive to the presentation of the reports, I put the opinion would be adverse if they won’t disclose the sale? because then the rest of the division’s results won’t mean much. Not sure if “except for” though.
(change of IFRS 16 Lease. Lease was material and also change of accounting policies in standards means a change must be made retrospectively for all the leases held in the same class. If mgmt won’t make the change, definitely a qualified ‘except for’ opinion in auditor’s report.
b) Responsibility of auditor in other information& impact on auditor’s report
Chairman’s statement had contradictory info. Auditors should address inconsistency by putting a statement/clause in Audit report that their responsibility is solely to provide an opinion on the financial statements and are not responsible for opinion and nor does their opinion extend to the chairman’s statement. Also the chairman claimed all printing moved to recyled paper but auditors have evidence otherwise. They will need to evaluate whether this claim throws into doubt any other evidence obtained during the Audit. Lastly, can address this inconsistency in the ‘Other information’ heading in the Audit report.
a)Comments on planning of audit, ethical And professional matters during quality control review and further actions (Engagement partner responsible for direction supervision and planning of audit. Bob spent just 2 hours so obvs throws into doubt quality of audit. Also familiarity threat, self review threat by accepting non-audit service whilst also serving as engagement partner, The Audit manager isn’t at the level of expertise to be able to sign off the final review, nor does she have the authority to do so. Should be responsibility of engagement partner. Also Junior accountant – should also be engagement partner’s responsibility to ensure the team are well experienced and qualified which our lovely Bob has evidently failed to do. So I put that substantive procedures would need to be done on Junior’s work as she may have been susceptible to threats of intimidation and therefore objectivity.
b)Evaluation of issues to be considered before accepting the Audit of the Group ( With a lot of the subs being foreign, will framework apply to all/most? expertise and experience of staff, resources available for the work, Due dilligence ID checks for fraud and money laundering legal requirement, possible litigation going on, how material is this? think they can’t accept engagement if it’s a big’un but correct me if I’m wrong. Wildfire going on..how would that affect reputation? and then going concern if fines, penalties? also have to rely on other auditors for the components..would they be able to trust their work?
Time management has always been an issue for me but I’m hoping to have at least given myself a fair shot! fingers crossed!!!!!
September 7, 2020 at 9:05 pm #583939
*Assets may be overstated
September 7, 2020 at 9:14 pm #583941dolphinsloverParticipant
I could not do my paper, technical issues – my exam never launched – the internet kept disconnecting jus before the launch of exam. Ah ! Dont kno whta next
September 7, 2020 at 9:37 pm #583943
Hello did anyone get the quality control question where all the subsidiaries were named oasis, Liam and Noel and Jarvis and we are doing a post issuance review on the blur group? This was my Q2 but I left until last. Really ran out of Ideas and found this harder than the audit risks?
September 7, 2020 at 10:00 pm #583952ginetta86Participant
Yes I got it as Q3 and done it last. Done it in 38 mins I had left as I did Q1 second and Q2 first.. Put Q1 in the middle as I knew a would over run a bit.
Completed the paper at least.. Which should increase chances of passing.
September 7, 2020 at 10:09 pm #583956
The Questions weren’t hard, but as expected time management was issue.
Although, I tried to complete all the paper within the time, still some questions left at end were vaguely answered.
The key in completing this paper in given time is to be concise, and answer your paper within 3-4 factors – Materiality, Treatment, Risk and Impact (especially for Q1 a part) – which should be answered within 3 lines to manage time.
If you spend time in unnecessary building on your points, apart from above, you are definitely planning to waste time and failure.
September 7, 2020 at 10:31 pm #583965
I’ll definitely take this point on board going forward!! because I do tend to build up my answers (lolz). Also the marks they were giving for what I wrote felt like it was too much?? or maybe I wrote too little..this is what makes me write more and hence the cycle continues…
September 7, 2020 at 10:38 pm #583968
The examiner only gives you point on whether you have answered your points by providing sufficient details, MTRI – for risk questions, it can be answered in 3 lines, and extra time spend will not obtain any extra marks, only consume time.
Same is applicable for audit procedures questions, were, if you have answered you points addressing – Action, Source and Reason, you will get maximum marks, which can be answered within one line.
Example: Obtain and reconcile fixed asset register to confirm with figures report.
Here, Obtain and Reconcile is Action, Fixed Asset Register is Source, and to Confirm is Reason.
As you can see, the shouldn’t even take a minute to write.
September 7, 2020 at 10:43 pm #583970
I’ve got you now. The audit procedures aren’t so much the issue for me – just the ROMM and Ethical issues and having to explain how something is a risk. Either way, I could aim to cut down next time if there is one..hoping there won’t be 🙁
September 7, 2020 at 10:49 pm #583976
If you follow some kind of technique, like MTRI, you will be able to close your point within 3 lines.
Same of for Ethical issues, which have different technique.
September 8, 2020 at 6:48 am #583999
Agree, question is almost same as past year, but time management is the critical point to pass
I believe computer based will better to manage the time
September 7, 2020 at 10:44 pm #583971
This is exactly how I learnt, we use MARE (materiality, accounting standard, risk and evidence) and for most questions it worked well. But in the exam the time pressure just makes your mind go blank and I’m trying to write answers so so quickly to ensure I get it all done so have very little time to properly make notes or plan answers. It’s almost like I panic type and don’t think deep enough into the requirement. I suppose that’s why exams are difficult though, they aren’t meant to be easy.
September 7, 2020 at 10:48 pm #583975
You should firstly, spend enough time in planning the questions. If you have planned properly, and points highlighted, you would be effectively able to write the answer within time.
I know in exams, it is not easy, but I believe this is what exams are, to be able to compose your self and management.
We all have enough knowledge to pass and ace this paper, if time restriction was not there.
September 8, 2020 at 1:32 pm #583824dolphinsloverParticipant
Couldnt do it due to technical problems… wondering what next !?
September 8, 2020 at 1:32 pm #584094mtsatsiParticipant
My time management was a mess, on question 1, I 1st made some analytical procedures, made reference to materiality PRA(PBT,revenue, TA), on internally generated Intangibles, IAS 38 requires a split between research &Dev, expense the former, capitalise the latter provided PIRATE criteria is met.
on the procedures, and matters to consider, I share the same as above
on Q2, I made reference to LEAHEM acronym on QC, and made reference to the scenario.
I also made reference to IFRS 15 with 5 steps/stage for revenue recognition
Q3- I ran out of time and just attempted section b for 10marks… Only God knows,
September 8, 2020 at 3:56 pm #584135naini008Participant
i could not even started the exam waited for almost 3 hours but there was so so many issues and at the end they simply revoked the exam
September 8, 2020 at 10:18 pm #584242chrisi04Participant
Re related parties
I cannot remeber the scenario by heart, maybe one of you does.
The finance director/CFO I cannot remember his position was an owner of another company where his son was the director of this company.
I said that it was not a related party transaction.
Am I right please?
September 8, 2020 at 10:31 pm #584248
Key Member represented on another Company in a significant position is a related party.
September 9, 2020 at 8:58 am #584308
Yes, that’s correct. I also remember adding that although he was chairman for the board and technically isn’t able to solely execute decisions for the company (It is advised chairman and CEO can’t/shouldn’t be the same person for this reason), his son is CEO and he would at least be able to exert significant influence because of the close relationship..so either way it needs to be disclosed.
September 9, 2020 at 12:34 pm #584364
I believe being Chairman is key management position, and does have rights to drive the board.
September 9, 2020 at 9:54 am #584323
What Audit opinion did people put for the sale of division? curious about that one.
September 9, 2020 at 10:20 am #584332
Qualified opinion as matter is significant but not pervasive. It should be classified as held for sale and discontinued operations.
September 9, 2020 at 12:00 pm #584354
OK – I put adverse opinion as didn’t value it correctly as HFS nor disclosed the sale at all. In any case as long as we justify the basis of our opinions should be fine as in practice not every auditor will have the same opinion
September 9, 2020 at 12:31 pm #584360
I also added adverse, as it was the significant division. Furthermore, maybe, the operations were discontinued during the year, with no such disclosure, the user of the of the financials are significantly mislead, i believe. But at the end, it is auditor Judgement.
September 9, 2020 at 5:04 pm #584425
Well, we had revenues with significant growth for this division year over year so it’s hard to assume it was discontinued during the year. It was also clearly stated they are going to do this next year.
Division was indeed significant and disclosure is needed in this case as well as reclassification of assets to current and proper presentation of discontinued operations in P&L. For adverse opinion it needs to be pervasive though which in my opinion is not the case here. But probably if you explain somehow why this is pervasive to financial statement then adverse opinion is also an option.
September 9, 2020 at 5:50 pm #584464
Hmm…any HFS asset still needs to be reported on until it’s actually sold. It’s the disclosure part that it’s HFS and separate line classification is very important in SFP to show a true and fair view and they didn’t do either of those. They actually valued the division using VIU and not lower of CV vs FV-CTS.
We are told the sale will be shortly after yr end as they had already found a buyer. It would be an adjusting event as it is due to happen shortly after the year end and the conditions this is very likely currently exist. The auditor would be responsible for detecting this and making sure the statement reflects what will shortly happen, everything disclosed, etc.
The sale would mean all that division’s assets and liabilities and all those figures reported on will cease to exist. Kind of like knowing the division will not be a going concern but not saying anything about it I thought??
It’s an interesting one though – I thought to pick the brains of others on here about this one so thank you for also giving the other side of it!
September 9, 2020 at 6:41 pm #584493
Yep, and that’s exactly why it is significant matter therefore modificated opinion is needed. On the other hand qualified opinion seems to be the most appropriate. In balance sheet it’s all about reclass (plus 1m diff on valuation) and in P&L it’s separate line but no impact to overall result. It’s therefore unlikely to assume it’s pervasive which is needed for adverse opinion. Once qualified it can be easily explained in basis for qualification and users will have all needed information to properly ready financial statement.
September 9, 2020 at 8:18 pm #584522
It is not only matter of classification on balance sheet, i assume the assets and liabilities will also be included in Non-Current category also, meeting IFRS 5 they should be shown as current which is very significant in its nature, and can distort many ratios and decisions.
Audit report wont provide detailed analysis.
September 9, 2020 at 8:23 pm #584524
And as the division is going to be sold soon after it means that division has already reduced significantly in its operations, the Chairman statement was clearly in contradiction with actual facts, and misleading to the users. If assets are sold, there is no way they can produce or operate. Again, it is matter of judgement in an exam as not all facts and details are provided, assumptions can be made.
September 13, 2020 at 8:32 am #585411atuldeepgupta0806Participant
In the question of asset held for sale, it is said that promoter has no plan for selling of division before the reporting date. Therefore, ifrs 5 not applied here. It is to be considered as non adjusted event as per ias10 and proper disclosure s to be provided.
Ifrs 5 applications not desirable in this question as Management was not committed for salebegore reporting date
September 26, 2020 at 2:35 pm #586780
IFRS 5, require intentions for next 12 months, and the management had the plan and intention to sell within next 12 months.
If i remember correctly it was in August?
September 13, 2020 at 9:59 pm #585488egbuleParticipant
Didn’t think I did particularly well. But let’s see how it goes.
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