*** F8 June 2014 Exam was.. Instant Poll and comments ***

just read some references and it was meant to be an emphasis of matter para. how many marks was that part again??

6 indicators not going corncern (not surviving) like loss of major customer, staffs etc, that’s 6 marks.

Part (d) emphasis of matter (directors agree to put disclosure on going corner) that’s 3 marks

Q5 If the mater of going concern was disclosed appropriately – unmodified opinion with emphasis of mater, if not disclosed appropriately – qualified opinion

3 Es (value for money): economy, efficiency, effectiveness.

Ave: yes, I think wrong revenue recognition is a risk in this case.

Did anyone highlight the employees wages being adjusted each year because of inflation as an issue? Can’t remember what the exact question was. Also with Audit risks the the inventory overstatement the 2 week in transit, could you argue cut off not being accurate? With the overtime control weakness did everyone just say gets managers approval for overtime so no unauthorised wGes will be paid etc. think they only issues I could think about my paper. Got all finished bar 5a the substantive test in inventory.

Hope to pass this time, as i won’t be comfortable for resitting the f8 paper for dec 2014 (or onwards) as it will have a different format and structure than all previous papers.

This was an ok exam. Too much information to write in 3 hours. I attempted all questions I hope what I wrote was enough to give me a pass this time. Last time I thought I would definitely pass and I only got 40%. I am keeping my fingers cross this time around. I am positive tho.

@seanog91 yea i wrote that as an issue as well, the payroll clerk were adjusting the salaries of employees annually to reflect the new inflation rate but there was no evidence of authorisation being given 1st before the system is updated.

this is the full exam

Deficiencies, control, test of control in payroll system (15)
Distinguish between interim and final audit (5)
Procedures for completeness and accuracy of payroll (6)
Procedures to test accruals (4)
Define VFM and 3e’s (3)
Benefits of audit Doc(4)
What is audit sampling and explain the need for it (3)
Audit risk and risk reponses (10)
Procedures for perpetual inventory system (3)
Procedures to confirm directors bonus (3)
Safeguard established by auditors for auditing various companies in the same sector (4)
Advantages and disadvanges of outsourcing the IAF ( split into 8 and 2 )
Weaknesses in CG and the CG responses (10)
Procedures required to correct the inventory mnisstatement (4)
Identification of events jeopardizing the going status of the clarinet (6)
Procedures to ascertain going concern status (6)
Going concern status found to be correct by auditor but material uncertainties exist, opinion (4)

jll

Goods-in-transit has a risk of wrong cut-off date applied, resulting in under or overstatement. As the company’s policy is to record only when received, they may record goods that were placed but not received yet. This appeared in recent past year exams 🙂

“The goods are usually in transit for two weeks and the company correctly records the goods when received.”

Yes, the company claims they record the goods when received, but as an auditor you’re not going to just listen to this and not highlighting it as a risk! Extensive testing on the inventory cut-off will be needed to confirm this 🙂

Remember the basic principle of auditors towards risk – Maintaining an attitude of professional scepticism

But whether or not, there are tons of other risks in the scenario given, no harm not including this as an audit risk 🙂

I have a question about “audit risk and risk responses”. What kind of responses were they looking for? Tests of controls, substantive procedures, both, or something else (adding more serious people, more review, etc)?