- This topic has 115 replies, 42 voices, and was last updated 8 years ago by
.
- Posts
@adilmusa said:
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….Same here materiality of only like 10.4% so this was material not pervasive – Qualified opinion with an “except for” was my thinking.
- Topics: 0
- Replies: 2
- ☆
the 2.6M was a material amount but it was only to be disclose not made a provision the lawyers didnt confirm that amount it was the directors who came up with that figure
hey what did you guys do for question 4 I think? I’m not sure if it was 4, the fire that damaged 40% of assets, and the defective inventory?
also what kind of procedures did you do about the payables and accruals with the supplier’s responses?
I feel like I messed up those two questions really bad =\Q6
1. Orders are automatically input ->there is a risk that slow moving inventory might be ordered even if not really needed => hence they should be checked and then authorized
2. Suppliers are chosen automatically but there is no saying about an authorized list, hence they might order from expensive suppliers => increase in expenses. A list should be set up and reviewed regularly & updated.
3. No approval or checking of bank payments
4. Minimum order levels not updated for a long period
5. All PL employees had access to the master data file. The phrasing was confusing though: “access to the master file is restricted to the bla bla”…restricted… that word confused me a bit.
6. Goods not inspected at third party warehouses
7. Can’t recall…Got few similar…anybody else recalls their answers?
did it say that all staff had access to the supplier’s master file? why did I think I read otherwise? =\\\
@rana91 said:
hey what did you guys do for question 4 I think? I’m not sure if it was 4, the fire that damaged 40% of assets, and the defective inventory?
also what kind of procedures did you do about the payables and accruals with the supplier’s responses?
I feel like I messed up those two questions really bad =\Calculated that the vehicles were material so needed adjusting in the FS but the stock was immaterial so added to the list of unadjusted errors – Talked about how the non current assets are currently overtstated – also mentioned that business carried on as normal so no going concern issues.
Procedures for purchases – was that not using audit software? My 3 were:
– Calculate payable days (compare to last year)
– Audit software can be used to select a sample of payables for testing
– Use audit software to identify aging payable balances not yet paid to suppliers and discuss reason for non payment with managementI don’t usually like talking about exam answers, but there was one MCQ that I just thought was a trick question, the very first MCQ on the RIGHTS of auditors.
I picked A, that the Auditors had the RIGHT to a general meeting only.
It was tempting g to pick C, that the auditors had the RIGHT to a general meeting AND give an opinion. But I excluded the auditor giving an opinion as a RIGHT, because this is a DUTY.Just out of interest did anyone else pick A, because there may be a difference between RIGHT and DUTY of auditors?
@gianina said:
@David1988Q6
1. Orders are automatically input ->there is a risk that slow moving inventory might be ordered even if not really needed => hence they should be checked and then authorized
2. Suppliers are chosen automatically but there is no saying about an authorized list, hence they might order from expensive suppliers => increase in expenses. A list should be set up and reviewed regularly & updated.
3. No approval or checking of bank payments
4. Minimum order levels not updated for a long period
5. All PL employees had access to the master data file. The phrasing was confusing though: “access to the master file is restricted to the bla bla”…restricted… that word confused me a bit.
6. Goods not inspected at third party warehouses
7. Can’t recall…Got few similar…anybody else recalls their answers?
Goods not inspected at third party was my last 1 I couldn’t remember ha – We have very similar answers for this question – reassuring
yeaaah that phrasing was really weird I’m not sure I understood it right it said it was restricted to all employees? as in accessable to all employees?
@ Rana
Don’t recall the Q no. but the one with the fire (1) and inventory(2) i wrote:
1. Is not adjusting, just the inventory part should be written down at lower of cost and NRV
2. Adjusting – inventory should be written down to lower of cost and NRV. It was a material amount -> qualified opinion if not amended…The payable Q:
I wrote that for the one with the difference in the reply there must be due to cash in transit or goods in transit(check the bank statement for payments, can’t recall anything else 🙁 )
The one that didn’t reply send a reminder, ask the client if we can call the supplier. Not material amount compared to the profit before tax…if in total with the rest of uncorrected misstatements turns out to be material -> adjustments need to be done. Do not recalll what examples I gave for the test….@trebleo said:
I don’t usually like talking about exam answers, but there was one MCQ that I just thought was a trick question, the very first MCQ on the RIGHTS of auditors.I picked A, that the Auditors had the RIGHT to a general meeting only.
It was tempting g to pick C, that the auditors had the RIGHT to a general meeting AND give an opinion. But I excluded the auditor giving an opinion as a RIGHT, because this is a DUTY.Just out of interest did anyone else pick A, because there may be a difference between RIGHT and DUTY of auditors?
I picked A also which I was fairly confident on – External auditors have a responsibility to provide an opinion and this is different to a right
@david1988 said:
I picked A also which I was fairly confident on – External auditors have a responsibility to provide an opinion and this is different to a rightI picked A as well, for the same reason – I thought the forming opinion was a duty not a right.
@david1988 said:
I picked A also which I was fairly confident on – External auditors have a responsibility to provide an opinion and this is different to a rightThanks David. That was a mean trick from the examiner.
Yeah Rana. I understand your frustration. I spent like 2 minutes trying to figure out what they meant by that, hence i recall even now the paragraph “access to the master file is restricted to all employees of the purchasing department”. Then i said what the hell…they must mean that all the PD employees have access and nobody else…was worth a shot as i was running low on finding 7 deficiencies…those guys had some pretty darn good controls set up in place 😛
@gianina said:
@ RanaDon’t recall the Q no. but the one with the fire (1) and inventory(2) i wrote:
1. Is not adjusting, just the inventory part should be written down at lower of cost and NRV
2. Adjusting – inventory should be written down to lower of cost and NRV. It was a material amount -> qualified opinion if not amended…The payable Q:
I wrote that for the one with the difference in the reply there must be due to cash in transit or goods in transit(check the bank statement for payments, can’t recall anything else 🙁 )
The one that didn’t reply send a reminder, ask the client if we can call the supplier. Not material amount compared to the profit before tax…if in total with the rest of uncorrected misstatements turns out to be material -> adjustments need to be done. Do not recalll what examples I gave for the test….I wrote carry out a detailed reconciliation between the supplier statement and the ledger, discuss the difference with management, if this an error at the supplier end no action required, if it was an error at our end we should amend the balance
One not received I said at clients permission send another circulisation, potentially call them if required, carry out a reconciliation if this shows any differences.
oh I think I mentioned something about the fire being a non adjusting event and that it should just be disclosed in the financial statements. I was really confused cause it was material so I didn’t know if I should write down the value of assets on the financial statements or not. I don’t remember what I did about the inventory but I think I messed it up as well
I said to do a reconciliation too but didn’t say discuss the difference, I think half my answers lacked necessary detail ?
@david1988 said:
I wrote carry out a detailed reconciliation between the supplier statement and the ledger, discuss the difference with management, if this an error at the supplier end no action required, if it was an error at our end we should amend the balanceOne not received I said at clients permission send another circulisation, potentially call them if required, carry out a reconciliation if this shows any differences.
What was Q 5 about? Anybody recalls?
Ohhh…from all the things i lost i miss my mind the most…
Anyone else remember any of the other questions – What about the audit risk question. I put:
– Repairs and upgrades – capital vs expenses – need to investigate
– Sales increase – cut off
– Share capital – Need to ensure it is correct in notes to financial statements
– New audit client – This brings risk in itself so need experienced staff on audit
– Can’t remember last one of top of my head@gianina said:
What was Q 5 about? Anybody recalls?Ohhh…from all the things i lost i miss my mind the most…
Was this not interim and final audit? Or was that earlier?
All right David1988.
Q5 audit risk
I wrote about:
1. New client -> higher the risk…talked about contacting the outgoing auditors, made a big speech about not accepting the job if the client doesn’t allow them to contact the ex-auditors.
2. Repairs & upgrades-> FS might be wrong due to misstated expenses and NCA
3. Share @ a premium -> to allocate correctly the equity amounts
4. The client wanted to report high revenues or something like that -> auditor must remain alert and professional skepticism maintained throughout the audit
5. Hope i wrote five as i do not recall anything else…wait…was this the Q with the inventory count? if so, i think i mentioned something about the audit firm not being able to attend to all the 23 of the warehouses inventory count…Anybody got anything else?
@gianina said:
All right David1988.Q5 audit risk
I wrote about:
1. New client -> higher the risk…talked about contacting the outgoing auditors, made a big speech about not accepting the job if the client doesn’t allow them to contact the ex-auditors.
2. Repairs & upgrades-> FS might be wrong due to misstated expenses and NCA
3. Share @ a premium -> to allocate correctly the equity amounts
4. The client wanted to report high revenues or something like that -> auditor must remain alert and professional skepticism maintained throughout the audit
5. Hope i wrote five as i do not recall anything else…Anybody got anything else?
We pretty much have the same 4 answers – I never mentioned about accepting the audit as I assumed this audit had already been accepted – I defo put 5 but I am struggling with remembering the last one haha
- Topics: 0
- Replies: 15
- ☆
Question 6 deficiences in purchase system
– poor supplier affecting orders – Did not use this one
– no approval of bank payments – Suggested segregation of duties to the clerk who input these and were then automatically approved. So kind of suggested the same as you, but not exactly.
– minimum order levels not updated for 12 months – Noted the the orders were made ‘below minimum order level, so suggested that it was re-assessed and implemented.
– all PL staff had access to master file – errors could be made – Didn’t spot this
– automatic POs generated and not inspected for accuracy – Agree, suggested that orders were checked prior to leaving
– directors authorise everything over $200 which seemed unreasonable – Agree, suggested the managers limit was increased as barely anything would be authorised by him and the director could then approve big impact items.Gia’s answer of ‘Goods not inspected at third party warehouses’ – I Insisted that they were
Recall that there was something about stock takes also :-/
The interim audit…ahhh…the interim audit…who paid attention to the interim audit part? Not me…
The interim audit Q was earlier. i think it was a 10 marker…but i might be terribly wrong.
I probably made a fool out of myself but i gave my best shot with answering this Q:
1. Procedures:
*observe/assess the client’s controls
*observe the employees during daily work
*other bla bla like discussions with the management2. How it helps with the final audit:
*auditors can focus more on the high risk areas
*they can test less data as the interim audit evidence is appropriate enough
*again some other nonsense probably but i can’t recall it….
- The topic ‘*** F8 March 2016 Exam was.. Instant Poll and comments ***’ is closed to new replies.