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There was a question in sec a regarding modofied or unmodified opinion and it’s disclosure what have you gyes chosen
In the last two marks questions there was a table showing the difference between the GL and statement was it related to Accountants receivable or trade receivable??
There was a question about reason for not going concern.
Sale of surplus property
Operation loss
Loan
And one more
What was the answer for this?Was that the printing costs?I said was a Prepayment and so only 3 months should’ve been expense and the rest moved to balance sheet – forgot to mention deferred. grr.
Found it hard to find 8 risks in the question thoughThe control risks I found ok. Don’t remember much on this…One of the control risks I put was about the removal of the passcode for the day and how there is a risk of theft or unidentified personnel getting in, to make sure team leaders were allocated the passcode and that surveillance was monitored. Put something about tagging inventories on the counts. Then also something about allocating a proportion of pre counted inventory to one side of the warehouse for the orders being fulfilled still. How did you find it?
Deferred expense is a prepayment so youre perfectly fine lol
I think my 8 risk were:
1. New client ( risk of unfamiliarity)
2. Training costs being capitalized
3. Risk of incorrect amortization of the asset
4.0.6m advert costs being expensed the in SOCI instead of being classified as a deffered exp.
5.The decease of the warranty provision even though the level of claims remained the same.
6. The provision for the legal claims (risk of no provision being made)
7. The new purchasing system (risk opening balances not being correct)
8. I cant remember the last one lolAnd our answers seem similar for the controls question.
For the pass code issue i said they there is an increased risk of unauthorized access to the warehouse and fraudulent activity. And they should monitor access through having a security officer at the entrance with list of authorized personnel who should sign and date the document upon entry.
And that they should include stickers to mark inventory items that were already counted.I only attempted first 70 marks. Difficulty level was okay but I couldn’t manage my speed due to lack of practice. Is there any chance I can still pass or should I start to prepare for next attempt?
In section A I got questions about ethics and planning and risk assessment and also corporate governance.
In section B the first one was control deficiencies, control recommendations, and test of controls for inventory stock taking./
Some random knowledge questions like the benefit of audit planning and what to consider when deciding to rely on Internal Audit department controls.
I also had audit risks and auditor response question
Then substantive audit procedures was quite a lot, I remember for bank loan and director bonus and trade receivablesAll in all, I think the exam was fair and reasonable and if I fail it is definitely because I didn’t prepare for the exam enough because there literally were no questions that I did not see in the revision kits, the videos or the past papers
What did you put for the substantive procedures for bank loan and recievables?
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)
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
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!!
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