*** P1 June 2012 Exam was … Comments and Instant Poll ***

opentuition tips are rather accurate! 🙂

Is it the case in this paper that if you give an answer, can support it and its relevant, you get a mark? Quite often the marking guides say ‘one mark for every relevant answer’

@willynwilson said:
I put down that the best decision was to invest in the least profitable investment “pealand” because their ethical statement and the pressure group seemed to be more important than the extra money.

What about the statement the company made about meeting ethical expectations towards employees in developing nations?

I went the other one, maximal returns for shareholders, higher risk but also provided a boost to the local community. Bribery was part of the local custom so although not acceptable by usual standards, could be regarded ok locally, and the benefits out weighed the risks

This also fed quite nicely into the internal control part

I have covered 95% of syllabus, so it is pretty easy for me. I chose the question 1, 2 and question 4.

Question 1: a) risk appetite and how does that affect the company’s strategy?
b) Use AAA Ethical Model to analyse which investment option should Haygo company to adopt
Option 1: Invest in J country with potential risk: bribe issue,political risk ( unstable country) and less corporate governance requirement;
Option 2: stable country and government encourage outwards investment and comply with corporate governance;

General purpose of internal control and assess the difficulty to have sound control system in J country.
General purpose of internal control is :
– -to safeguard the company’s assets and shareholders’ investments
– – to ensure the completeness and accurateness of accounting records in place;
— to prevent and detect of fraud
— to effective running of the business
— to ensure internal policies are carried out by the company

The difficulties to have a sound internal control in J country because of the following reasons:
— cultures in J country does not support sound control system based on the scenrio;
– quality issues
– less skilled people especially people has less knowledge about accounting, thus it is difficult to produce the complete and accurate accounting records and it is difficult to meet the international accounting records;
— Also it mentioned on the scario that it is difficult to safeguard assets

c) It is about the brief notes regarding meaning of accountability and agency relationship between the board of H and only one single investor of Quack Bank; and how the demands of WB (International pressure group) which concerns Human Right issue can affect the company’s strategy? On the scenario, it says, WB can get a support using media, such as newpapers and TV and also get strong support from politician and trade organisation from all over the world. Therefore, WB is on High power / high interest category, based on Mendelow’s Map, Management of Haygo has to take WB views into consideration due to WB’s powerful position. Otherwise, it will adversely affect company’s performance, it can cause potential reputation risk; erode the shareholders’ confidence, and major shareholder (Quack Bank) may withdraw the investment and reduce the share price down; In addition, it will make the company to find diffculty to raise funds.

Q2. a) Meaning of independence and evaluate the Independence issue of NEDS
b) Role of Risk committee and critise the senior manager comments about the risk. In the case, senior manager says risk is useless and risk does not stop the risk etc. My main point is risk management system reduces the risk but does not eliminate the risk; risk management system helps the management to identify the risk and response the risk according and take action to monitor the risk;

C) why the largest organisation needs the risk management system than the small company? The similar question as Gluck and Goodman (Dec 08 ) part b. Factors affecting the need for internal audit and controls.

Q4. a) Compare general corporate arrangement between family memebers company and listed company? Why CEO in family business thinks the family control over time is being lost?
b) What are the benefits of induction programme to new NEDs and how CPD helps executive directors in Lumy family after family business floated on the stock market?
C) the distinguish between 2 tier board and unitary board, and some difficulties for Lumy family member to be fit in a unitary board?

@middeo said:
But then you completely dissatisfy the 3rd party WB whos Interest moved to High and high power on the mendelow framework means you would try to satify this external stakeholder.

How about the risk of the international media disclosing the bribe, therefore creating a reputation risk and also the fact that the bribe will show that the company is not complying with their corporate governance arrangements, and the fact that WB has the potential to be a significant key player, and can influence the public, politicians and the trade organisations.

There is no way the extra money was worth the risks.

Bribery while although may be legal in that country It would also be unethical as it is a yearly bribe that would result in the continuation of the brutal dictatorship. I went pealand

Did anyone else use Turnbull report for the internal control environment using control environment and procedures for a robust sound system? Hope I didn’t read it wrong… I am so pleased it’s all over!

@helen425 good stuff, but shouldn’t WB be keep informed? They don’t have power but rather the ability to get key players involved.

@nimbostar said:
This is my first disaster paper. I only had three weeks to cover the syllabus and revision(whilst also working fulltime) due to other commitments and my other half doing dissertations and Uni. Didnt even finish question 1 and had very little knowledge with the rest of the questions. I will be sitting this paper again in December.

Good luck to everyone.

I think you’re not Julius Caesar 🙂

Overall not bad..So far I think COSO will not be appropriate for Qs 1.c..advantages of internal control can be described here..Pealand matches with the present ethical values and norms of Hayho and thus ethically can be selected..can hope for 50…

English is not my mother tonque, so these discursive questions are difficult for me to pass. Time constrains don´t help me at all, so I prefer “calculations” to the definitions and longer answers.
Reading took a lot of time, I lost some time, when I hesitated between the Q2,Q3 and Q4. Then I decided for Q3 and Q4.
I will have to improve my English to succed this paper.
What I really hate are definitions like “the general purpose of internal controls”. I usually omitts some of them, even if they are obvious.

Did anyone choose Q3?

I thought the paper was hard in general but after reading you, guys, I think it’s me that stupid not to perform well on the exam, lol.
I wrote all my thoughts and managed to answer all points in the Q1, Q2, Q3 BUT I didn’t apply any theory to my asnwers except those that were clearly asked in the requirments. Is it ok? I think no.
Re internal controls – I don’t know if they were asking for COSO, I just wrote the objectives of internal control – I know that pretty well since I took F8 recently 🙂

WB – I placed this pressure group to H/H key players quadrant. I think using mass media and political relations this group had a signifficant power to influence Hayho. imho.

Overall I wanna forget this paper untill august 🙂 when the results are ready.

Have a nice summer! YAY!

@carl29

I agree to a certain extent. I went for J also (I am a bit worried that nobody else has)
Firstly I thought Pealand was too obvious for a professional exam.
Secondly, the ETHICAL issue I thought was “bribery” (there were other risks that would need to be assessed but for the purposes of the AAA model I chose the “bribery” issue.)

The options were:
1.Pay the bribe go with Jayland
2.Don’t pay the bribe go with Jayland
3.Don’t pay the bribe go with Pealand.

Mostly aligned was “dont pay bribe go with jayland” – (developing country support, just because hayho is operating in a different country doesn’t mean that they have to lose their integrity, (integrity was obviously one of the IC challenges later on in the question)

Consequences are that Mr .popo will increase regulations on their operations, not get his bribe, support local workforce, help developing community, satisfy shareholders maximise profit objective, increase in exposure to risk( that will need to be dealt with in next question).?

Anyone do this too? I ve defo failed if nobody has???

what was in q.3 did any any one attempt that question?? i think it was about ethics 😛 (a) is about confliction of interest and polly shah career who failed and still promoted there is assessment about that why he is still in firm
(b) is about safegaurd it will not occure again in jojo
(c) i forget about it 😀
guys who attempt this question please tell me what he wrote in it