June 10 Exams POLL Paper F8 was Post your comments here

you have to write threat instead of priniciple

high fee
familiarity threat
out standing fee
senior audit work for client
etc

@maggie said:
Any one know how many marks for this question? I think I got it wrong by reading the question incorrectly. I have written the principles instead of threat, but I did give examples, of course, examples for the principles, as follow,
Integrity – Not disclose conflict interest
Objectivity – High % fee
Professional competence and due care – incompetent
Confidentiality – financial interest
Professional behaviour – not comply with law

Please give comments…..

paper was bit okay than past papers….
elements of assurance engagement….level of assurance, level of gathered evidence(detailed or less), etc..
external audit
review engagement
agreed upon procedure
compliation services

..
q5 part c would be unmodified opinion with eom para as directors were agree to disclose the issues of going concern but there were no signs of shut down or major losses this year….so only eom with unmodified opinion would be okay
…

q4 a.i wrote self int, self revew familiarity advocay n intimidation
and 1 eg for each
b identify n explain threat
i identified as other service than audit work
audit senior working with client and then auditing
outstanding fee
audit partner n fd has relationship
discount offer to but mobile phones

Problem face with the question of elements of asurance services.(q-2)
Write abt:
Mgt advisiory service
Tax services
Accounts preparation
IT cons
etc

@fanol u should send a e-mail to ACCA explaining the problem.

@fl123 said:
the two 10 markers in question 1 was difficult.
what the hell is the elements of an assurance engagement??? is it the types pos + neg. hope not!!!! the wording was weird.

I think the wording throughout the exam was difficult to work out what exactly was required by the examiner…possibly due to the fact that it was a new examiner!

Still not sure about the last part of question 4, i thought the situation was that the company has included a going concern disclosure, but while the auditor agrees with this he believes there is material uncertainty to the effect that the going concern does not exsist (ie, the auditor feels the company cannot continue to trade for the forseeable future).

SO…the going concern disclosure would say that the directors DO beleive the company can continue to trade for the forseeable future, but the auditor does not…so i would say this needs to be either an adverse audit report or a disclaimer of opinion depending on if the uncertainty is due to mis-statement or the inability to obtain sufficient audit evidence.

What are your thoughts?

Thanks

Gag

Elements of an assurance engagement:

PRACTICIONER
USERS
RESPONSIBLE PARTLY
SUBJECT MATTER
SET CRITERIA

I wrote some like this anyway

All those guys who wrote going concern risk and currency risk in qstn 1(a) they r in trouble because the question clearly stated audit risks and mentioned above r business risk .appropriate risks would come under the headings of inherent, control and detection risk.

@baral said:
All those guys who wrote going concern risk and currency risk in qstn 1(a) they r in trouble because the question clearly stated audit risks and mentioned above r business risk .appropriate risks would come under the headings of inherent, control and detection risk.

I do not agree – audit risks are those issues that could cause material errors in the financial statements AND those that compromise the company’s going concern status.

Inherent risk,Control risk,detection risks are CLASSIFICATIONS of risks ONLY!!
Business risks such as relying on one client for 60% revenue can potentially cause going concern problems.

If you stuck to AR = IR x CR x DR then you are in trouble !

You are supposed to identify the risks,not classify them !! AND explain why those issues are risks i.e. how do they cause errors in the financial statements or compromise the going concern assumption.

really confuse ….what is the audit report …at 1st I’m quite confidence on this paper ..now …haha hope for pass

The risk question was adopted from a past question and in the answer, the examiner didn’t classify into DR CR etc but just identified the risks the coy could face.
This is not to say that the classification is wrong – at least there were control risks in the scenario but why bother wasting tour time trying to classify when you weren’t asked for it. Save exam time please! Examiners have complained of students wasting time trying to classify what they weren’t asked – this is a major comment of the P1 examiner. So just write to pass and not to overkill the exam.

Check the June 2005 Q1 to verify.

Check the June 2005 Q1 to verify.

I think this example its not relevant. Examiner comments that there were no marks given for split the answer into three sections of risks. Because 4 marks for explanations of risks were available in part(a)

@emmanuel_taf said:
I think the examiner wanted you to identify those issues that would lead to errors in the financial statements – i am not sure classifying the risks into IR,CR & DR would generate a lot of marks.

I approached it this way :

Identify risk e.g. forex risk arising from importing from south asia
explain the risk & how it might cause errors in the FS : translation errors e.g. using the incorrect exchange rate

identify risk e,g, going concern risk because bulk of revenues from a single client
explain the risk & how it might cause errors : if major client becomes insolvent,(1) receivables will be overstated and (2) the company might find it difficult to continue operating

I did made a Table In which Identified them in one side Where i said which type of Audit risk it was and on the other sde i explained why was it a risk i think it should be OK this way … What do think?