AA*** December 2022 ACCA AA exam – Instant Poll and comments ***

What did you put for the substantive procedures for bank loan and recievables?

@jayhelena I think.. 1. Obtain the loan agreement and agree the loan amount agreed to the Trial balance amounts (assuming this is a new loan, the current and non current amts would give the total loan balance. 2. Recalculate the non current and current amounts to confirm accuracy & compare to the FS balances 3. Recalculate the interest paid and compare to finance costs paid on the income statement 4. Review the bank agreement to identify any other possible covenants on the loan and confirm that they are in compliance. 5. Increase substantive testing on the FSLI that make up the current ratio ( current assets & Liabilities) to ensure they are reasonably stated. (They needed to maintain a current ratio of 1.3 or they would face penalties and they may overstate the balances to avoid those penalties) For receivables. 1. Cast the receivables amounts to confirm accuracy & completeness and compare to the trial balance 2. Obtain external confirmations for the client balances and investigate any differences 3. For a sample of items on the receivable sub ledger, trace the amounts back to the invoices/source documents 4. Review the receivables aged listing and assess if there are any receivables that should be written off as ireecoverable or a bad debt 5. Select a sample of receivables from the sub ledger close to the days of year end (before and after) and trace these back to the invoices/source documents to ensure these items were recorded in the correct period (cut off)

@jayhelena What did you write for the Payables substantive stuff ?

I definitely got the receivables and the bank loan. Wrote pretty much the same things as you did but think I could have split out to gain more marks- I put the recalculate interest and current and non current in one point...exam technique fail there. Think I added about checking correspondents to see if there was any further covenants to abide by. Was that the 4 mark question where they had the supplier statement vs ledger balance and then said when the invoices were dated? One of the invoices were dated 29th May and Y/E was 31 May. I remember writing about extending the Y/E cash testing to see if the invoice was settled. I think this one I struggled on.

Yeah that one. I struggled a bit there aswell. I cant really remember what i wrote there... something like 1. Obtain the AP subledger to confirm if the invoice was already cleared 2. They should obtain the subsequent payments made to the client and confirm if the invoice was paid. 3. Trace the payment amount to the bank statements to confirm release of the funds Honestly based on our answers and reading the examiners marking scheme it looking like we are passing this exam lol.. i may be wrong but it surely feels like a pass

loss of sales director or something I think

I was pretty gutted when I realised I messed the audit report up, had tingles when I realised on the drive home I had written 'emphasis of matter' instead of except for but hopefully score marks for putting the %'s of materiality and explaining the other bits. Really hope you're right there!!! if I have to sit this exam again.....Is this the last skills one for you? In all the other the other sitting I had before I struggled to finish on time but I finished this time with like 10 mins spare. Guess that's proof that exam practice essential for a smooth experience. Booking my professional paper before the results come out!!

What substantive procedures you got and how you wrote impact on audit report?