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Hi Mike,
I wish you to explain the mark allocation for this. For example, the question asked for 4 risks of material misstatement?
There is a loan stock issued.
I identified one risk is the effective rate for loan was not taking into account the premium and state IFRS 9 rules resulting understate the fiance cost overstate profit
Second risk is if interest payable is not accrued and leading to understate current liability
Third risk is the presentation of loan did not slit between CL and NCL
Are they three risks already? Without touching any other issue? Or they related to one issue therefore only count as one risk 1.5 marks?
It really depends upon how many other risks of material misstatement are in the scenario!
It also depends on how many marks are attributable to this part of the question
If you can find three others away from the loan, that would be great.
But if you can’t see any others, then stick with the three
Where there are others, you could combine the three loan related risks into one
Where there aren’t any others (that you can see) then leave them split into three separate points
(As a man, I love the Freudian slip where you have typed “understate the fiance cost” – can any man ever really know the true cost of a fiance?)
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