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

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.

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

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/

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

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

Yes me too as it asked regarding ‘report ‘ not the opinion, I took it as what else now needs to be done considering it was at the final stages of the report and due to be signed

waiting for SBL poll

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.

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

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

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

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.