- This topic has 181 replies, 83 voices, and was last updated 8 years ago by
.
- Posts
- Topics: 0
- Replies: 7
- ☆
Yes Aqsa…..it was. 5marks part required mentioning 5 elements and how information acquired from those sources can help auditor in pursuance of understanding the entitiy………………
Anyone who remember the multiple choice questions to write them down? I could’t remember! it was time pressured!i stuck on question 5 the last 25 minutes!
MCQ i could not rmb as well.
yes. alot of C and i know i have 2B somewhere.
Good idea to write mcq on hand. I should do it next time if still have mcq.my answers for your input.. not sure if they are correct!
Q1: Ethical Threats
familiarity (michelle mars 7 yrs)
self interest (contingent audit fee) not acceptable.
self review (valuation task? should reject this) not sure did i mix up with other qn.what other internal audit procedure other than internal control can be done
(think 4-5mark on this? left this as my last question to be completed as i just write whatever comes to my mind)Q2: chg engagement letter
change in company significant accounting policy e.g. depreciation method / useful life calculation etc.
change in company management e.g. outsource internal audit dept which will change audit’s plan, work and strategy and reliance of internal control work (control risk chg).2b) 6 parts of engagement letter
fee
auditor responsibilities
management responsibility
timeline
reporting framework
could not recall what i wrote for last point.how to understand new client for audit planning.
– website. if listed, published financial statement available as reference.
– previous years financial statement and result as trend for reference.
– competitor’s result as comparison against industry mean and average. Able to reference for market share and trend as well as risk.
– ask previous audit firm on any risk to take note for this client. If reply is no risk, should be no issue. If audit firm reply saying client dont allow to disclose, review with management again. potential issue for audit firm dismissal and change.
– cant remember my last point.Q3. Going concern
5 reason why they were not going concern
using the points from the paragraph and explain.– significant buyer drop sales which will impact their buying power from the co. Material revenue impact.
– double impact for cash flow – cash on delivery vs credit term to customer.
– Contingent court case – impact to credit rating with payment delays (make it hard for future loans or credit term from suppliers) To do a contingency provision on estimated loss.
– Didnt include the obsolete product line in their forecast cash flow. I read the paragraph a few times and noted that it was only told by their finance director that the product line may be due to regulation etc……… to be obsolete. I have commented that auditor should validate the source of this information and check with respective authority whether this news is rumour or truth before deciding next step to this. If this is real, check when will this new regulation be passed and see if this impact the current financial statement. Auditor may need to include in their report disclosure according to the period of this impact.
– cant recall the last point.Q4. audit risk
review w management on their decision to chg their useful life/depreciation calculation. auditor to validate useful life.
bonus related performance. self interest threat to produce a higher profit before tax by creative accounting.
insurance. they should not trt as received when they have not recv it. this is part of contingency.
share report earlier so that they can know how much they will get? —> not sure did i mix up this with other qn. explain by saying co may avoid material posting during reporting period which is potential cut-off issue.Q5. 18 restaurant chains.
6 deficiencies, implement control test and how external auditor can test on them.– purchase order dept order goods after restaurant mgr submit inventory level. This should be ordered by restaurant mgr (RM) and submitted to purchasing dept to order instead as RM should know how much to order and purchasing dept should order from the list of acceptable vendor list to ensure low cost and good quality. “If stock is low, RM will order from local supplier” This should be avoided as well as these usually are of higher cost (buy in small quantity) and quality may not be as good.
– cash should bank daily. if cannt bank daily, keep them is a safe that is fire proof and preferably immovable (fixed on wall etc). auditor can check by verifying deposit in bank vs daily cash sales.
– petty cash $500 with some receipt missing. to reduce the petty cash box amount and change petty cash personnel. if no receipt strictly dont approve any reimbursement. auditor to do surprise checks to ensure petty cash float tie with petty cash voucher issued.
– friend and family discount – all RM give different discount which is bias and missing objectivity by the RM. This will also cause revenue loss to the company as the discount given might be more than the cost involved in serving the meal. To standardise the discount before financial year start and deploy to all restaurant. This can be tested by pulling daily sales and discount in POS and cast the computation on discount given.
– report not sent to head office on time and each restaurant use own accounting records. To design a standard template and lock sensitive field to reduce human error and formula issue. Deploy training to restaurant mgr to ensure all know how to fill up. Auditor to review the template.
– inventory level at store dont match the one submitted to head office. Internal audit dept should hold surprise check at restaurant to check inventory level submitted vs actual inventory level. If there is no internal audit dept, operation manager may do such checks regularly on surprise visits.Q6.
audit evidence
Source- I think i mention about, black and white written confirmation better than verbal one.
Independency- 3rd party confirmation stronger evidence than internal confirmation.
A few more points but cannot recall now.before inventory count
-see past year inventory count if there are issues.
-confirm the location of these 12 sites ( i think is 12 location if im nt wrong) considering the travelling distance.
-ensure mgt deploy out minimal stock movement on stocktake days.
-make sure all people who count stock are aware wat’s their responsibility area and training/deployment properly given.during inventory count
-sequentially numbered stocktake sheet given out.
-No missing stocktake sheet when collecting back the papers.
-signed in ink.
-ensure no warehouse personnel involve in stocktake.modified report.
For question 5:
A) they only asked about responsibilty so I just stated one line saying it’s auditor responsibilty to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations effecting F/S.
b)i) Deficiencies: Cash not banked daily (cut of problems), Risk of fraud as random staff members are asked to bank the cash, Family and Friend deducation for staff is set by individual manager (can lead to inapproprate deduction if insisted by staff), tips are not returned and there are strict polices in place… and other 2 can’t remember..
ii) Controls, Cash should be banked daily, An authorised person should bank cash, deduction are set by central mangement, supervisor in place to see whether all tips are returned (silly point I know)
iii) Observe, Inspect and all that suff !!
- Topics: 0
- Replies: 1
- ☆
Exactly.. There were a lot of C’s.. I was beginning to wonder
I think this year they made the Mcq much easier but the rest more tricky.
Thought an 8 marker question on before and during Inventory count was a bit much I could only think of a couple of points.
Didn’t like Q5) seems like anyone could do the identitying part question without having studied any audit and I guess for part 2 and 3 any sensible control would get the mark? E.g I said for inventory they should use a computer system and set predefined economic order quantity so inventory would be ordered at correct level and to test this compare purchase orders samples to inventory levels on the system to ensure that they placed at the correct triggering levels. Would this be what they are after sort of thing? I don’t like subjective questions as never trust that marker will give marks if it’s not what he thinks. I much prefer that there is a correct answer.
Didn’t like the Sources of information question, felt it might have been a trick or something. I talked about actions like gain understanding of entity ect. But by source do the mean Directors, Experts, Documents, Budgets, Legal doctrines ect, to me these are actual sources but it didn’t feel like that’s what they wanted.
@drice99 said:
Stupidly spent more time on the 10 mark questions than the 20 ones. Had 13 minutes to do question 6.Ridiuclous. Still probably passed but I didn’t make it easy for myself .
Mcqs maybe 14 marks on lowside
10 mark Qs maybe 25 marks on low side
20 mark Qs maybe 16 marks on low side
Overall maybe 55 at leastI am the same and the situation of this paper is similar to F5 in Sept 2015 session (examiners test more on theoretical stuff and less focus on the calculations)!
@ehsanshah said:
you are right it’s either sale mix or discount !!!I think the answer is B although I chose C fitst.
@justin1980 said:
OMG…I did not realize that there was a question 6…..I thought 5 was the last question…omg I hope I pass or its a rewrite for me…I am so upset about this..i thought the last page behind was empty..Justin I made the exact same mistake! its so infuriating! I know this has happened to other people on a previous paper I took I think F9. ACCA should ensure all questions are inside the question booklet, I do think its wrong they stick one on the back sheet. rarr!
@acaqub said:
I think the answer is B although I chose C fitst.I was adamant it was C! I wonder if option c was actually written as understated inventory which would mean a gross profit reduction…
@sarahblundell1985 said:
I was adamant it was C! I wonder if option c was actually written as understated inventory which would mean a gross profit reduction…Assume that opening inventory is zero then you purchased £4 stock and used half of it. 50% discount means purchase is £2.
Without discount—-£4-£2=£2
With discount—£2-£1=£1Gross profit margin= Gross profit/Sales(Fixed, assume 6)
2/6>1/6
So the answer is B…
@sarahblundell1985 said:
Justin I made the exact same mistake! its so infuriating! I know this has happened to other people on a previous paper I took I think F9. ACCA should ensure all questions are inside the question booklet, I do think its wrong they stick one on the back sheet. rarr!I have not missed the Q6 but I think ACCA did it in a tricky way. Have a habit first: scroll down to all questions until you can see the ‘total mark’ mark at the end of the question. For F8, 80 marks.
@ehsanshah said:
anyone knows when ACCA will publish Question paper and Answer?No, there is a clear announcement saying ACCA will not publish Section A questions but it will publish all Section B question in June and Dec each year.
I hope it will help.
1)C
2)C
3)C
4)B
5)A
6)B
7)C
8)B
9)A
10)C
11)A
12)CDunno how well I did with those answers. Where is everyone getting the suggested answers?
@ehsanshah said:
GR8 it was for 6 marks right??thanks buddy 🙂
@joesmith said:
1)C
2)C
3)C
4)B
5)A
6)B
7)C
8)B
9)A
10)C
11)A
12)CDunno how well I did with those answers. Where is everyone getting the suggested answers?
I got exactly those answers!
@abdullahnm said:
It was pervasive I thought.. I got 11.8% and that’s pervasive to me hahaPervasive should be atleast 2/3 of assets,profit etc ….
@justin1980 said:
OMG…I did not realize that there was a question 6…..I thought 5 was the last question…omg I hope I pass or its a rewrite for me…I am so upset about this..i thought the last page behind was empty..Don’t worry now just concentrate on remaining papers
@abdurahman said:
there was a question about, the responsibility of the auditor regarding compliance with laws and how that affect the f/s??hi, please write what you replied to this. my reply was if fraud or money laundering was discovered (because of word DIRECTLY) and i also said that its the management’s job to ensure compliance. auditor should obtain sufficient evidence for possible noncompliance
It’s a hybrid paper of Sept and Dec sitting… I was shocked seeing the differences damn !!!
@acaqub said:
Assume that opening inventory is zero then you purchased £4 stock and used half of it. 50% discount means purchase is £2.Without discount—-£4-£2=£2
With discount—£2-£1=£1Gross profit margin= Gross profit/Sales(Fixed, assume 6)
2/6>1/6
So the answer is B…
What are you doing?? Gross profit = Sales – Cost of goods.
So in your example
WITHOUT DISCOUNT [1]: Gross profit = 6 – 2 = 4
WITH DISCOUNT [2]: Gross profit = 6 – 1 = 5Hence gross profit margin:
[1]: 4 / 6 = 67%
[2]: 5 / 6 = 83%You divided COS / Sales!
- The topic ‘*** F8 December 2015 Exam was.. Instant Poll and comments ***’ is closed to new replies.