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Q1(a)(i)(ii)
Brand name
1. “and how the brand name is used,for example ,does it apply to all products of the Group?
But the Q already state that groups ‘s goods are sold under the Adams brand name?2.Q2(a)(i) Should it be a non-audit service as review of PFI is one type of assurance engagement? Is it outdated? can’t find in the IESBA code of ethics?
Q2(a)(ii)
3. Last 2nd point-The bank is relied upon of the result of the PFI review for lending decision ,how to calculate the new finance cost?4. Last 3rd point-should it be SOPL rather than SOFP?
1. An updated version of the Adams Group question can be found in the AAA Specimen exam – I cannot see the answer point you refer to so suggest you disregard it.
ACCA’s past exam library goes back only to S/D16 – I do not know what Q2 you refer to (no name).
Q1 refers to the question mentioned in the specimen exam “The Group operates in the textile industry, buying cotton, silk and other raw materials to manufacture a range of goods including clothing, linen and soft furnishings.Goods are sold under the Adams brand name, which was acquired by the Group many years ago.”
Q1 – yes I read the Q scenario but it does not have “how the brand name is used” in the answer – so again, I suggest you disregard.
Re Waters – looking at Q3 in the Specimen which is the latest and therefore relevant version of this Q/A:
2 – I don’t understand your question – clearly anything that is not audit is non-audit.
3 – I don’t understand your question – the answer is saying that the finance costs in the forecast should be recalculated to make sure that it is based on interest-bearing borrowings that include the loan.
4 – yes it looks like it should be SOPL
3. As the answer stated that “Recalculation of finance cost to ensure that interest payable on the new bank loan has been included, with confirmation of the rate of interest to bank documentation”
Which the new bank loan refers to the $8m that Waters Co apply from the bank and the question also stated that
“The forecast has been prepared for use by the bank in making its lending decision, and will be accompanied by other prospective financial information including a forecast statement of cash flows.”Therefore the new bank loan and its associate interest payment and rates will not yet available for included in the forecast if the amount not being agreed and approve by the bank? or its refers to the pre-approval bank agreement signed?
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