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MCQs I got A D C C C C D B B D A D. Very different to yours toovesen02 :/
nha86 do you remember what your MCQ answers were?
My mcqs were similar can’t remember exactly rest of the paper was ok too, except q5
Q6 was tough too.
Hope i pass it was my first ever 2nd attempt.Messed up… Time wasn’t enough, managed only 80. Please anyone can give me some hope with “appropriate evidence”…?
Question 1 – My 5 points were
– Lack of NEDs – Not a balanced board
– No internal audit – audit committee need to assess need each year
– Lack of knowledge on audit committee due to all being sales guys
– Chairman and Execs becoming NEDs close to retirement – said their objectivity may be different due to relationship with company
– No rotation for 4 years – If become listed need a nomination committee with 3 NEDsDid anyone put similar answers?
exam was ok – mcqs very tricky and Question 3 was very hard – but rest of exam was ok
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My MCQ answers looked much more like zeventien’s, not completely though. Did not write them down as I concern myself with walking out of the exam with a list of MCQ’s, which would look like I walked in there with it lol.
Answer to Q1 was similar to David1988’s, only difference being that I stated the audit committee were not independent having worked for the company (NED’s should be from outside) and that there was a risk of self review as a result.
Chairman and other director on NED’s was a lack of independence again as they were directors previously. They should resign.
I didn’t feel the question mentioned rotation
Also, the audit committee did not have someone with recent financial experience and the I am not certain about this one but as there are enough NED’s in the company I stated that the chairman should resign from the committee as it compromised the audit committee’s function on the basis that it should report to him.
ccoda yes I mentioned that they needed someone with financial experience on the audit committee in my recommendation
It mentioned in the question that the board had not changed for the last 4 years which I believed highlighted a rotation issue as the board should be up for re-election. If they became listed then a nomination committee would be required to monitor after this area.
@atif2017 said:
Audit report opinion???Is that the $2.6m unknown litigation claim that wasn’t to be changed?
I said that if it was unknown and uncertain a disclosure should not be made – Material balance – Material not pervasive – Modified report – Qualified – Except for – Explain what except for was and how it meant everything was deemed free from material mistatement “except for” the disclosure
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I really felt the 4 year rotation was a mark, but managed to avoid that and add a different issue as I felt less confident with that one that others. Those things normally have more points than are required. Any other questions you recall? My recall is terrible unless I am given the plot first, then it all flows back.
same! but the misstatement was the $2.6 Million receivable – that had to be contingent asset – and disclose – am I correct?
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I stated that the $2.6m payable should be followed up with management, solicitors etc as it was the managements opinion that considered it successful, not a third party.
The $2.6m receivable claim at the end of the question however, was completely conceived of by the management and did not warrant being in the financial statements. I stated that we should insist that they remove it from the statements (despite it saying that they would not) and that if they wouldn’t, we would need to modify our opinion, qualifying it, stating ‘except for’ and using the word ‘potential’ effect, as we can not prove this with sufficient evidence.
@ccoda said:
I really felt the 4 year rotation was a mark, but managed to avoid that and add a different issue as I felt less confident with that one that others. Those things normally have more points than are required. Any other questions you recall? My recall is terrible unless I am given the plot first, then it all flows back.Question 6 deficiences in purchase system
– poor supplier affecting orders – need approved supplier list
– no approval of bank payments
– minimum order levels not updated for 12 months
– all PL staff had access to master file – errors could be made
– automatic POs generated and not inspected for accuracy
– directors authorise everything over $200 which seemed unreasonable
– can’t remember the last one haAnything similar?
Audit report opinion was too confusing. It was definitely modified but i was unsure if adverse (material and pervasive) or just material hence qualified anyone else? I chose qualified in the end but not with any confidence….
I wrote that contingent assets are to be recognized only if they are completely certain of their materialization. They should not be included at all due to the fact that their lawyers were, maybe, just informed on the new claim against Bean…
@atif2017 said:
David 1988 are you sure about the audit report???The receivable litigation had not even started legal proceedings yet so I said that it was difficult to estimate the likely value and this was not probable that it would be received – that is why I said it wasn’t a contingent and should not have been disclosed.
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