*** P1 June 2016 Exam was.. Instant Poll and comments ***

yes your right
was as if i was taking an auditing paper

@david1988 said:
Just to add to this Q3 looked at independence and threats to independence for internal auditor in the scenario. Usual issues came up such as working for company for 10 years before joining IA (familiarity), was well like so may be scared to upset and had a close friend who was under scrutiny for theft. All of these affected his objectivity and may be complacent in his job. Also gave other side of argument where he will have good knowledge of company processes etc.

Second part was looking at his role as a NED and effectiveness.

Lastly we had to describe the roles of audit committee and the relationship with internal audit. First part was usual financial audit, internal control review, reviewing external audit independence, fees paid and provision of non audit services etc. Relationship with internal audit was that they monitor the effectiveness of their work. Mentioned scope of work etc.

Hoping I was on the right lines for this one.

Sorry audit committee, not internal audit.

This exam just made me more confused
If i had studied past exams for seven days that would be enough, i dont think i had done any better when i studied for a whole month ,most question’s requirements were common sense rather than knowledge.hope i have done enough to pass

The paper was not too difficult to answer, but it was a bit much to complete in the time given.The answers required a bit of thought before putting on paper, but barely had time to think before writing answers. Most of the areas I concentrated on in my studies did not come in the exam. Added to that, it was just my luck that I had excrutiating pain in my right hand, had to stop writing from time to time. Hoping by some miracle to pass.

For Audit Commitee roles did people use this?

Role and function of an audit committee
? create a climate of discipline and control leading to a reduction of opportunities for fraud
? lend an air of credibility and objectivity in the fnancial statements thereby increasing public
confdence
? assist CFO by providing a forum
? review fnancial statements to improve the quality of reporting
? independent judgement
? strengthen position of the internal auditor
? strengthen position of the external auditor
? assist in the resolution of disputes between external auditor and executive board

This is what the tutor taught but Im not sure I did this correctly?

vipulv, the statement I guess was 20 or 22 marks, including the 4.
The statement was all blah blah. I guess only few marks on description of transparency and fairness, the rest was pure water, same ideas from point a, b, c.
Such a disappointment.

Agree with everybody else, there were very few subjects and models.

PS, I used CLARISSA for roles of audit committee.
Besides that, I wrote that the head was quite incompetent, didn’t have financial expertise, didn’t consider the head of internal auditor’s threats to independence and didn’t review him, just accepting the report.

Regarding Head of Internal Auditor, the threats I wrote were:
– Familiarity (10+ years, friendly with everybody, friend at the ware house)
– Self-Interest (in order to preserve the friendships he has, even maybe some financial interest in form of bribe from the warehouse-keeper)
– Self-review (could be present considering 10 years of activity, which could mean that he participated in the design and implementation of some of the internal controls)
– Intimidation (he could have been intimidated, threatened by his old boss at his ex-department, as well as being blackmailed by the warehouse friend in further actions if he had “closed an eye” on the issues present).
– advocacy – mentioned about it, but couldn’t identify any.

@david1988Second part was looking at his role as a NED and effectiveness.

I think the chief of audit committee was a NED…

@joharper87 said:
I agree with what everyone is saying with regards to the examiner not testing a bulk of the key areas that I had focused on most!

I found Q1 difficult, especially the public interest bit. What did everyone put for ways in which stakeholders increase their influence???

This is what I put for the 4 marker and 10 marker. Be interested if others felt the same.

Ways to increase influence:
1. Approach local, national press – “People kicked out of homes just so scientists can have a better view” is a story that might sell.
2. Lobby local government. These are elected and if they p*** too many people off they will be voted out.

Is development in public interest?
Pro:
1. Job creation – 500 jobs pretty self explanatory
2. Regenerate area – towns which look nice and have a good university/ science scene attract a lot of tourists – more business and prosperity in area.
3. Education – School visits, ties with university could encourage kids to like science giving them more prospects in the future.
Cons:
1. Income inequality
It’s possible that the jobs will go to outsiders who just turn up for work in their nice cars and disappear at 5pm without using local business/ facilities. Possibility of no prospects for the local socially housed tenants. Possibility of a “town vs gown” culture developing
2. The opportunity cost of library
3. The eviction of local residents.
Then need a conclusion – I went for pro.

Hi
Yes indeed ,the time was hard to be managed,let’s see the result!anyhow i must say that P1was beautiful and interesting ,and thanks to opentuition for lectures and advices !
Just one question i have:I see that in companies there are functions like revenue assurance which are more or less part of controls and risk , but i did not see them mentioned at all in the syllabys.

@vipulv said:
For Audit Commitee roles did people use this?

Role and function of an audit committee
? create a climate of discipline and control leading to a reduction of opportunities for fraud
? lend an air of credibility and objectivity in the fnancial statements thereby increasing public
confdence
? assist CFO by providing a forum
? review fnancial statements to improve the quality of reporting
? independent judgement
? strengthen position of the internal auditor
? strengthen position of the external auditor
? assist in the resolution of disputes between external auditor and executive board

This is what the tutor taught but Im not sure I did this correctly?

The question asked for “roles’ of audit committee. What you wrote up there are the benefits of having an audit committee/ The duties (roles) of the audit committee are:
1. Review financial statements
2. Review internal controls
3. Review internal audit
4. Review risk management
5. Relationship with external auditors
6. Investigation

@brikhysi16 said:
Hi
Yes indeed ,the time was hard to be managed,let’s see the result!anyhow i must say that P1was beautiful and interesting ,and thanks to opentuition for lectures and advices !
Just one question i have:I see that in companies there are functions like revenue assurance which are more or less part of controls and risk , but i did not see them mentioned at all in the syllabys.

3 stakeholders were libary users, housing association and science company providing landscaping

I put them as follows:

Libarary users – High interest, low power (keep informed)
Housing association – High interest, High power (Key player so need to meet and discuss issues ASAP)
Science company – High interest, low power (keep informed)

I think the phrasing of part (ii) was a clue that the residents and library users currently have low power. Here’s what I thought:

Science Company:
High Power:
Can bring 500 jobs to the area or if they don’t like the LGA terms they can go elsewhere.
High Interest:
Hoping to establish a new profitable business operation if terms are right

Local Residents:
Low Power:
As individuals can’t do a lot. Must obey laws and eventually comply with eviction terms
High Interest:
Would you like to be kicked out your house?

Potential Library users:
Low power. Similar to residents. The possibility of creating 10 jobs doesn’t have the same leverage as creating 500.
High Interest:
If things don’t go there way they won’t get their library at all…

My second thought was that the library users were not reacted to the development of the project.In fact the leader of the housing association make the allegation that the library users will react because of their interest for the library..