*** F8 December 2013 Exam was.. Post your comments ***

fair and im hopeful to pass. february seems far far away. good luck everyone!!

I am NOT a dude! LOL!

It is standard text book talk!

Got 20/20 on question 5.

Opening balances for initial engagement should be checked to prior FS, queried with previous auditors and chase management to explain any differences.

Material mistatement could lead to qualified or adverse
Unable to get info could lead to qualified or disclaimer of opinion

For the expert check that they are competent to carry out their work by consulting the relevant professional body and checking status of their membership, check to see if they have an interest in the entity to ensure their work is objective

Last part was a joke

Maximum assurance
Every mistatement
Auditors responsibility to prevent fraud
Auditors responsibility to prepare FS
Adhere to some ISAs
Work done depending n experience of audit staff

My Q3 deficiencies identified were, manual checking of stock, manual entry onto paper and then 3-part form, 10% above credit limit, order info sent manually to accounts and dist departments, no sequenced numbering and accounting staff taking part in preparing sales invoice and also posting onto system (segregation of duties)

Then had an implication and recommwndation for each one

It seems most of you found the exam easy and attempted all question but you’re still not sure if you’ll pass or not. Is the examiner that bad?

I attempted only 4 out of 5 questions, although I wrote some notes on question paper for Q5 during the 15 minutes reading time and then I completely forgot about it during the exam. I even started making irrelevant comments in Q4 just because I found I had time left.
Yesterday after the F7 exam I thought I forgot to answer Q5 and later on realised in fact I did attempt it. Now for F8 I really did forget about it/.. Unbelievable … I will tattoo the number 5 on my right thumb so I am constantly reminded about it.
Thank God F9 only has 4 questions so tomorrow I’m safe…

Question 5, even if I did not attempt it was really easy, especially part b with the mistakes in the audit report, which were so obvious. And part a) if I recall correctly was a question about how opening balances should be confirmed in a new audit and if they cannot be confirmed what should the auditor do.
I only managed to scribble “disclaimer of opinion”, “it’s the company’s responsibility to prepare FS and prevent fraud” , and I was told to put the pen down by one of the invigilators. My writing was also practically eligible and I didn’t even form sentences so I don’t expect any points there.

@dianalynn
I too talked about the same ethical risks you mentioned.
In Q1, I listed the following risks, and what I can remember about the auditor’s response (although I’m not sure if this is what the question was asking):
1. multiple locations – the auditors won’t be able to attend all inventory counts in all 15 locations so they should select a few, especially those where there were problems in the past (existing locations) and new locations where there is a risk the control is low because of inexperience staff or control procedures might not have been properly put in place. If all goes well in these locations it is likely the other sites are ok too.
2. new general ledger software – the auditor should check the system control is put in place, the balances have been transferred correctly from the old system and the data has not been lost, has the staff received training etc. He can do this by testing the system (entering dummy data, use of caats, reconciling balance with last year records, observe personal to see if they are confident with the system)
3. new finance controller – is he experienced, has he received proper training, does he know what he’s doing? the auditors can observe, talk to the management and perform substantive procedures to make sure there are no material misstatements, especially since his decision to release the 1.5m receivable allowance was questionable at least.
4. there was a big investment in machinery, coupled with repairs and replacement – the auditors should check this was accounted for correctly, eg the repairs have been charged the P&L and the new machinery capitalised. They should check all additions, physically inspect the assets for their existence, look at original invoices for ownership and also to check the amounts, recalculate the depreciation to make sure the valuation is correct and then double check it was been disclosed correctly in the FS.
5. the write-off of receivables allowance – this was a very big amount and if the decision was not correct then this would result in a material misstatement – so the auditor should have checked the assumptions, confirm this was authorised by looking at the minutes of board minutes, check the status of the receivables account – age debt, circulations and responses received etc.
6. the fact that the bonus of the directors was awarded based on the value of net assets, might result in them deliberately overstating them. again auditors to do substantive testing and recalculated their value.

I think I wrote one more but I don’t remember it…

All in all I hope I understood the requirements and approached the questions correctly enough to get a pass. I’m a bit scared now because I see all of you lacking confidence and you answered all questions….

In any case, best of luck to all of us.

All your risks are legitimate, i made a seperate one for the 4.5m and 5m expenditure. Hope that is ok :O

well the question about ethics was about the ethics chapter overall not just the threat things. You had to write about a little of everything concerning the chapter of ethics lol

@nobleseven
same here, confused myself completely though when i saw the part below reffering to the $5m

i think i gave substantive testing for all the risks and then second guessed myself – was i supposed to do this?!

one other thing, wtf was the bit about releasing the receivables? completely missed that bit out

Paper was fairly easy except for the last of question 4 because I found them difficult to identify but still managed to spot all five and write down. A good management of time helped me compete all questions in time. A minute less and I would have had to skip a part of question.

Q1 had 10 Audit risks, Q3 had 9 deficiencies and so on.. Studying examiner’s answers helped me alot in writing my answers and managing hem. Brief but to-the-point explanations are much better than lengthy to-the-point explanations and this can only be learned by comparing answers with examiner answers.

@Mahoysam there was also a second approach to that question, i first stated the ethics then risks to them and the remedy which the company could follow. so i guess if you have written this too it will work

i think if i’ve passed its going to be literally by the skin of my teeth

here hoping for a 50!

time management messed me up