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- This topic has 42 replies, 19 voices, and was last updated 3 months ago by Aadishsoni1.
- December 6, 2022 at 8:19 am #673608
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 though
The 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?December 6, 2022 at 10:45 am #673656
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 lol
And 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.December 6, 2022 at 10:53 am #673657sdchudiwalParticipant
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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?December 6, 2022 at 11:52 am #673660kish200Participant
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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 receivables
All 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 papersDecember 6, 2022 at 12:27 pm #673662saskiadevereuxParticipant
December 6, 2022 at 12:44 pm #673664
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What did you put for the substantive procedures for bank loan and recievables?December 6, 2022 at 1:43 pm #673668
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)
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)December 6, 2022 at 1:49 pm #673669
What did you write for the Payables substantive stuff ?December 6, 2022 at 2:43 pm #673674
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.December 6, 2022 at 6:33 pm #673730
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 passDecember 6, 2022 at 8:09 pm #673757guyver101Participant
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loss of sales director or something I thinkDecember 7, 2022 at 6:37 pm #673890
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!!December 10, 2022 at 5:08 pm #674191Aadishsoni1Member
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What substantive procedures you got and how you wrote impact on audit report?
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