AA*** December 2021 ACCA AA exam – Instant Poll and comments ***

The payable issues!? with 2 different companies (GFS and FS2)!! or maybe not....

The lease question, leasing from the client is a self-interest, but it says on the question that the lease will be at market value, then is the conflict of interest significant?

Is comply with ACCA Professional ethics a legal requirement

I wrote it as not significant and then can accept the agreement, feel free to let me know if its wrong. I have no idea how I did in the exam, felt confident coming out of it but second guessing myself when I got home.

Same!! I'm doubting all my mcqs answers, at the time of the exam I was feeling all was easy, but now I'm kind of rethinking the answers and getting paranoid haha I answered the same as you! Hope we are right.

I did the same with lease - self intrest, not significat, they can accept, although it was a bit tricky as I thought this is not threat at all.

I probably had around 60 marks just on substantive testing... bit ridiculous. Hopefully I answered them sufficiently.

Does anybody remember the answer for the MCQ question where proof of total was to be calculated for the commission that would have to be paid to the credit control agency?

projected expense for credit control agency - i calculated 225k

I calculated the projected expense to be $225k

What did people put for the audit opinion question where the irrecoverable receivable had been accounted for correctly but then the audit team discovered the amount should have been 200k more?

I think that 200k wasn't material so unmodified opinion with EoM

I think i did put unmodified, cant remember what which unmodified i selected. What did you put for the auditor opinion for the inventory lost in fire after the year end - was this part of the same requirement?

Ugh i don't remember if it was part of the same requirement, but i recall little of that particular question. It was non-adjusting event

There was an MCQ question where you had to select two people to take over was it for engagement partner? Can anyone remember what the answers for these ones were? Think there were 4 different people to select from - think one had a family member involved & one had previous employment with the client if i remember right.

Yes, one had wife working as a financial accountant for client, one was engagement manager before current one, so 7 years ago (cool off period is 5 so i chose him) and there was quality engagement manager and one was director at client 2 years ago. I cannot remember my second option

i think i blew MCQ, but i hope for section B to save me :)

Yes- same for me. 6 weeks is just too long to wait.

lets discuss mcq of AA if anyone remembers! i am really confused regrding ias 10 question adjusting and non adjusting events.

Legolas17 wrote:I think that 200k wasn’t material so unmodified opinion with EoM

I am interested to know - what MATERIAL matter does the EoM refer to?

The irrecoverable receivable was 2m and this amount was disclosed in notes, but according to auditors it was 2.2m, so in my conclusion this 200k was immaterial and that's basis for unqualified opinion and included in EoM due to importance and that it is fundamental to users’ understanding of the financial statements

@Legolas - I may not be understanding your meaning, but I should clarify for the benefit of readers of this post that an auditor's report refers only to MATERIAL matters - no one is interested in a matter that is not material/immaterial,. To draw attention to something immaterial "as a matter of importance" is a contradiction that would confuse any reader. The nature and purpose of the EoM are correctly explained and illustrated in our notes.

The difference of 200k is immaterial, so no basis for qualified opinion. The irrecoverable receivables should be disclosed in EoM because total amount of 2m is significant for users of financial statements.

Obviously I am not yet privy to the question but auditor's reports would be very cluttered indeed if they were to draw attention to everything that is material in the notes in an EoM. If the irrecoverability of a receivable has been correctly accounted for - i.e. trade receivables have been written down for the expected credit loss allowance in the SoFP - the accounting treatment is correct and there is no material misstatement. There is nothing more for the reader to understand than is presented in the SoFP. Compare that with, for example, the disclosure of a non-adjusting event after the reporting date - if this informs the reader that a material amount of inventory or a material asset that is included in the SoFP no longer exists - e.g. due to fire/flood then that IS fundamental to users understanding of the SoFP. Was this an OT question or a Section C question?

Have you calculated materiality for 200k receivable difference? It was above the threshold for PBIT and revenue hence material misstatement and modified- qualified opinion should be issued - material but not pervasive with wording "except for"

I got 170k the money was the same for the first 7 months but June to Sep was at 1% and Oct to May was 2% and the 2% was two different figures and then the extra 5k

Multiple choice questions for this paper were super tricky if I get above 15 will be super lucky, also the substantive procedures for me had always been a problem, Audit risk questions was super happy to see ratios, easy calculation marks, also making it easy to comfortably identify risk (I just hope my answers were sufficient) The last bit about adjusting events ( I calculated materiality on what the auditors were suggesting not the difference, though it was an immaterial adjusting event, my questions are were the management refusing to make an adjustment and disclosure??, The last one writing a letter on deficiencies of payroll and recommendations,

Kim Smith wrote:Obviously I am not yet privy to the question but auditor’s reports would be very cluttered indeed if they were to draw attention to everything that is material in the notes in an EoM. If the irrecoverability of a receivable has been correctly accounted for – i.e. trade receivables have been written down for the expected credit loss allowance in the SoFP – the accounting treatment is correct and there is no material misstatement. There is nothing more for the reader to understand than is presented in the SoFP.

This was an OT question - it was an irrecoverable debt of £2million and the client had accounted for it correctly however the auditor had realised that it should have been £2.2million so the £200k was not material. The question asked you if the auditor report should be modified for the difference between what was accounted for by the client and what the auditor believed to be recorded.

can anyone please guide me which topics will cover the CR portion of exam?

@zainikhan - welcome to OT! To get the most out of our forums please see HERE for guidance how to use them https://opentuition.com/forums/forum-rules - e.g. you should make a post with a suitable subject line (polls such as this are for comments - not for asking questions that you need an answer to). See here for answer to your question https://opentuition.com/topic/audit-assurance-cbe