AAA*** June 2023 ACCA AAA exam – Instant Poll and comments ***

Hi, what did you write about the asset held for sale in the audit risk question please?

Do you remember which were the 2 most significant risk u wrote? and in Q 2 which was about post assurance audit review not Q 3 where there were three companies and we have to comment on the ethical professional issues there marks were 7-6-7 but i could only fine one issue in them do u remember any thing about it?

i wrote there should not be classified as held for sale as the criteria has not been followed as they will start looking for a buyer after the year end

That was the most difficult paper i’ve sat in my entire life!! After all this hard-work, everything feels useless. Didn't even finish the paper.. The time wasn't enough at all

Yh I noticed that note in the account after I finished writing that the asset held for sale was correct but the audit risk was that the result of it was included in revenue and so it should be deducted from operating profit so that materiality should be calculated on the adjusted profit before tax. This means my materiality calculation was incorrect too. I am so disappointed in myself for not noticing that note first. When I noticed it was too late.

i hv heard from a teacher if i can remember correctly if u take materiality on non adjusted profit it is still correct

Question 1: (a) Significant Audit Risk (22 marks) - some risks include revenue, inventory returns, detection risk, assets held for sale, amortisation of accounting system, recognition of online sales, provisions (b) Audit procedures on inventory returns (8 marks) (c) Audit implications in terms of NOCLAR (10 marks) Question 2: Quality mngt, ethical and professional issues (i) (dont remember exactly) - 7 marks (ii) reliance on IT system, control deficiencies detected but not further audit procedures performed - 6 marks (iii) providing results of audit data analytics from audit client to audit firm and expection bonus payment ( not really sure if its right) - 7 marks Question 3 (a)(i) sufficiency of audit evidence - the case talk above renegotiation to the bank to extend loan , sale of property but revaluation not up to date, finance director lack integrity - 7 marks (a)(ii) Audit procedures on issues leading to co. being going concern - 7 marks (b) criticize auditor report - MURGC paragraph not provided - 6 marks

I agree. One of the hardest one I have done. Anyone sat afternoon session?

Time is a disaster

Q 2 was the first company control effectiveness in service organisation where the company sells their products on some website second company it control deficiencies and third company audit team was getting the potential client details

Hi. I sat afternoon session, AAA INT. Here is what I remember: Q1 -Audit risks 18 marks (company designed and produced boats for fishing industry) -Justify why inventory (made of raw materials, work in progress and finished goods) is material and audit procedures regarding this (14 marks I guess) Q2 Communication with TCWGM Critics to Key audit matters section from audit report Q3 Group audit - Evaluate etical matters in whether audit commettee should appoint one or the other auditor who were in tender - evaluate why matters should be included in the report to be sent to management

Yes materiality based on revenue. I thought it was identity significant risks of material misstatement though, not audit, so I’ve really messed up :-(

I’m still so confused. I did it as revenue so 5-10% but nothing was meeting the threshold. Did I go completely wrong?!?

I had the same exam on boat Q1 Q2 TCWG Q3 KAM and audit committee selecting the external auditor. Probably a fail again. I spent too much time on Q1 and barely finish Q3. How did you recognise the engineer for the joint arrangement?

Yes you did because I initially did the same. It’s 0.5-1% of revenue for materiality isn’t it. I wouldn’t worry though as surely you’ll only get penalised once for that? Own figure rule

Materiality based on revenue is in the range of 0.5% to 1%

Jun 23 Exam - AAA - INT Q1 - new client- listed - online sales to worldwide a) Significant audit risks (22) - materiality at PBT (there was a PBT after deduct the loss of discontinued operations) b) Procedures (8) - new inventory return policy launched for full refund of 6 months c) Audit implications and recommendations for actions (10) - non-compliance of environmental regulations Q2 a) evaluate the audit evidences obtained whether they are adequate (7) - going concern issue related to the loan extension will be expired in next mid reporting period b) design substantial audit procedures for going concern issue (6) c) critically appraisal the proposed wording of the draft audit report (7) Q3 - post-assurance review - quality management Discuss the quality of performance of the audit and quality of management, ethical and other professional issues a) (7) b) (6) c) (7)

Left 1 question of 10 marks in section A , other fully attempt,but sure fail again because not fully attempt.

Audit risks are primarily risk of material misstatements so your good

Can you elaborate more ?

Can you mention some of the Audit risks you wrote?

audit risks were i think assets held for sale, revenue, new client, previous auditors, impairment of some asset i think inventory returns

I took the afternoon exam so will be different to the morning one, but an audit risk is basically the risks around giving an inappropriate opinion which is that material mistatments are not detected PM sitting had New audit client - detection risks Impairment of dockyard hadn't been carried out Gift of a boat so relates to fair value and justification of accounting for Joint arrangement which was accounted for incorrectly Intangible asset relating to the joint arrangement accounted for incorrectly Payroll had been subcontracted and the risks around that their where signs of management bias across a few. there might have been something in the 2 customer boats damaged in the dockyard causing a liability but felt reaching to me and enough easier ones

Lads, for the payroll thing I talked about how the unauthorized overtime payments may have overstated the payroll expense and lost time sheets make it difficult to evaluate . Also due diligence procedures are like audit procedures right in terms of gathering evidence on a matter?

This is my third attempt and the first time I was able to attempt all the questions, was happy with my answers though I can't remember much of it now LOL. But overall I felt the paper was ok.

I also had the paper with question a about the boat company and I was also sure the 18 mark question was risk of material misstatement. I did the uk variant. Was maybe confused as the question mentioned not to include the inventory risk of material misstatement. Very concerned now.

This gives me hope! This is how I remember the question - risks of material misstatement rather than audit risks. and not to mention inventory as this was questioned in part b i) Then audit procedures on inventory for part b ii)

110% it was ROMM and not Audit Risk. I messed up materiality calc for rev as I did 0.05 instead of 0.005. But apparently that's only 1 mark lost! Good luck to us all.

Is it bad that I didn't use any information from the financial statement? I couldn't find a relation between the other exhibits and the financial information.

Yes, I am 100% certain it was ROMM and not audit risk and reading your comment just made me realise I did the same thing I wrote to use 0.5% of revenue and then calculated 5% lol