AAA*** March 2022 ACCA AAA exam – Instant Poll and comments ***

Chris777 wrote:If an account balance is 1.6% of total assets and you say that it is material, would that be correct given the general materiality threshold is between 1-2%?

Well, I guess we had similar question in one of our courses. And the answer, if I remember correctly, was simple - these are possible thresholds auditor may use depending on the company. Since you're not preparing a deep company evaluation here with final materialities, just justify that that this amount is between possible materiality thresholds and highly likely gonna be material or that it is prudent to assume material or smth. Basically the lower % is the threshold for materiality. Anyone feel free to correct me if I am wrong.

In question 2, I founded research and development and warranty provision But in final portion of this question they asked you "implications of the completions of the audit and actions" they have not asked you regarding the audit report impact on that question which was willing to sold off towards venture capitalist

No it was not impact on the audit report they have asked you implications on the completions of audit and any actions

I am actually very confused about Q2, the first part was of 15 parks containing three issues, pensions ,inventory, 5.5m payment to customer. The second part audit opinion based on pensions and payment part. And the third one was threats. If i am not wrong. Can anyone tell. What u all did in this question.? M actually confused.

Question 2b was about audit report?

I said the similar thing - materiality has to be reassess cause the client exposes more risks - sample has to be increased - auditors needs to documented the further procedure reagrding this issue and also documented the actions has been taken - they have to remain skeptical for the reamining audit - client integrity has to be reassess as well cause client did not disclose this matter towards the auditor But I don't know do they really ask about the impact of audit report or just stated auditors actions? May be I just missed that point regarding the impact of audit report

1 - 24 marks on significant material misstatement 6 marks - impairment procedures 8 marks - auditors responsibilities on AML and identify from scenario 8 marks - AML acceptance scenario what is bad and how improve 4 marks - prof 2 - Due diligence 16 marks on two scenario on intangible assets and info needed (I think) PLUS there were 3 finances, shar cap, bank loan and VC : what you want on file and why 9 marks on ethics 3 - 7 marks on new product costs capitalised , explain it and evidence expected 8 marks - provisions explain and evidence 5 marks - audit opinion on provisions not corrected 5 marks - you now found out he is selling company to VC what implications

No it should not be checked for materiality with respect to revenue as it is not a relevant benchmark for it it affects profit and assets only see this https://opentuition.com/topic/materiality-41/

Can someone tell why actuarial gains on reduction in defined pension obligation must not be recorded in OCI because IAS 19 says actuarial gains due to changes in assumptions must be recorded in OCI and this was classified as misstatement what's the reason can someone help

May I know what the implications u wrote? When u find the they intend to selling the company towards venture capitalist

Q1. business risk 10 romm 20 procedures on g/w 08 compliance 08 professional 04 Q2. post issuance qc& ethics 16 ethical threats from PFI 09 Q3 Matters to TCWG misstatements Defined benefit Pension 05 Inventory 05 Preference share issued 05 steps taken by the auditor 05 Impact on audit opinion 05

Yes, i'm definitely sure this is the question we got. There was 5marks separate marks for implications for the audit report

May be u are correct, implications and impact on the audit report along with the auditors actions, 6 separate marks for that issue has been assigned. However I just wrote about the actions but didn't made any impact on the audit report

That's true and on top of that, there is no indication of the mistatement on that case, There was an extra ordinary event at which the auditor has been aware regarding the final stages of audit. So in this case what we will write in the audit report? How we will issue an opinion regarding the extra ordinary scenerio like this? I don't know...

waiting for SBL poll

@mayri24386 - the SBL poll is on the SBL forum https://opentuition.com/topic/march-2022-acca-sbl-exam-instant-poll-and-comments

There was a misstatement which was material, as acturial gain was recognised in profit and loss and not oci, so auditors provide the correction entry to be made, if not corrected opinion and report will be modified.

During cold review, audit opinion cannot be changed.

First of all, there were 2 different types of questions has been released. In our questions auditors has been aware regarding an extraordinary event (decided to disposed off company to venture capitalist) at the completion stages of audit, and the examineer asked regarding implications of completion of audit and it's impact on audit report. I was fully clean bowled by the examineer by that part. Though I have managed to provide 5 implications but could not provide any impact on the report cause there wasn't any indications of mistatement. In more precisiously what auditor will do and it's impact on report if they are aware about a new thing in the completion of stage

I think according to ISA 570 subsequent event, auditor can still modify the opinion if the audit report has not been issued and mgt/ TCWG have failed to amend the FS. Impact to the audit report should be either adverse or disclaimer as liquidation a business is a material event (just my 2cents). its 5 marks fingers crossed, i just want pass

ranapardeep87 wrote:There was a misstatement which was material, as acturial gain was recognised in profit and loss and not oci, so auditors provide the correction entry to be made, if not corrected opinion and report will be modified.

No if it was left uncorrected no modification would be made since it is not material to profit or loss or assets , with revenue you cannot check if its material since it does not affect revenue

May be you are correct, for the opinion which u provide. may be you are going to pass the exam :( only for this opinion. I didn't provide any opinion. I just wrote about the implications on the completions of audit. But I didn't provide any opinion for the report regarding the issue. May be only for this reason the examineer will going to fail me into 49 marks.

Lool that was the last question i was doing before i ran out of time. Honestly, i don't know. Q1 - RoMM - i tried provide i think 11-12 risks which was quite challenging Then gave 6-8points for impairment procedure Qb - AML & Acceptance - i think i had 5 points for the acceptance and like 3 for the evidence of money laundering. i was running out of time so i wanted to leave enough for my other two questions. Q3- procedures - i gave procedures of the intangibles and loan agreement but at this stage i struggled to think further for the shares and VC. i think i gave 2 each for these. Ethics - i think i gave 5 issues here and speed off to the last question Q2 - i couldn't make head or tail of the 1st issue. Wrote about the warranty and issue in determine the estimate value. Then gave procedures. i didn't talk about the opinion for this part Q2b - i realised this was a separate question about liquidation of the business so i quickly threw down points for this. i hope in aggregate i can scrap through

i don't think the examiner will fail you for this reason alone if you did well in the other areas. lets just wait and see. my last ACCA exam so i am hoping i don't get to lift these books again God willing

Question 1 (a) identified something around 14 risks (b) impairment procedures, I am pretty sure that I will get 6/6 may be I have 7/8 procedures (c) money laundering identified 3 issues from the case. Placement, layering and integretaion and also write auditors responsibility regarding money laundering (d) acceptance: I wrote, ethical threats missing, integrity issues missing, professional clearnence has not been taken in the form of written, they did not conduct check shareholders and directors, risks has not been done from the form 2) a) intangible assets: materiality, treatment, why the criteria has not been met, risks of under and overstatement. Evidence for intangible assets (I think this was the most straight forward question) B) provision: there were several issues changes in provision was not appropriate cause changes in estimation is only applicable when management is aware about new things, estimation is inherently risky, CEO has not proper competent to estimate for provision, the warranty provision has not been correctly done cause they have made estimations on sales only Evidence for provision was too good for me If I don't get marks in matters I know I can be able to copeup the marks with evidence which I provided C) just wrote about implications on the completions of audit but didn't provide any opinion regarding audit opinion 3) another straight forward question - finance issue: I wrote 5 valid points - intangible assets: I discussed with them regarding to ensure whether criteria has been met such as: separately saleable, whether purchase agreement exist, separately disclosed has been given for amortisation, whether they charge amortisation from the date of purchase, when did they purchase? -c) there were 4 straight cut marks for acceptance (I) self interes (Ii) self review (III) management (iv) level of threats are higher cause it will impact the materiality towards firnancial statement - fees - integrity of client: I make 2 points regarding this - again self interest threat: cause the audit firm may tempted to accpet the client in order to obtain more new client despite of not considering other threats - conclusion: they should not accept this new client, cause there are ethical threats, integrity issues are available.

Well I don't know, but as far as I know they consider audit opinion, the most significant and crucial matter for passing p7 which I missed out somehow. Cause I only saw about "describe the implications on the completions of audit" and the rest of the part I missed out due to time pressure But it's good to missout significant matter rather than giving a wrong answer or whatsoever.

Good for you indeed. we just have to wait and see! good luck everyone

Just if i am understanding your points, if say you get 60% based on your answers above the examiner will fail you for giving an incorrect opinion? i don't think this is correct, please check with your tutor. Can some one from Open Tuition clarify please?

Exactly, in ATX exam I have faced this. I was pretty confident that I am going to pass that sitting but I got 49 but I was aware though via opentution poll that I did mistakes in tax rates. And they made me fail for 49 and on the very next sitting with the same knowledge I got 69 in ATX exam, cause I was aware about the facts regarding the tax rates. They consider those tax rates are significant enough to fail u. And same goes in AAA paper for opinion in reporting. Cause if u don't know opinion u have no rights to pass in advance audit. Same for ATX if u don't know about tax rates u will never going to pass. Furthermore I don't need clarification from opentution tutors here cause I have already faced this thing twice in my whole ACCA.

Ask the tutors in this forum why people do fail in 47-49 do they really get this 47-49 marks??? Tutors will roam here and there but will not give u definite answer for sure. They will highlight your exam techniques, professional marks, also highlight your weaknesses to understand the case scenerios and so on... But they will never ever give u an appropriate answer. Cause They know the thing as well but this matter should not be publicise.