AAA*** P7 December 2013 Exam was.. Post your comments ***

It was tough for me. Didn't anticipate q2 so guessed all the way. My time management was poorer than last attempt. Will retake this paper June 2014!

Hello, you can see that question 2 was disaster. We hope all the best.

Question 2 was hell al the best guys

How do u give ur feedback to ACCA? I dun think it was a fair ppr =\

M wid u..I hope more ppl do the same

Well due diligence is fact finding report . I dont think we give any negative assurance there. I just checked few financial due diligence report on internet and they all have conclusions rather than any opinion :) Do you guys have any idea ? Question asked the difference between conclusion ( not opinion ) of due diligence and opinion in audit ?

rainey Your lecturer seems good - who did you study with?

I must be some sort of freak as I seem to be the only one here who loved Q2. I approached it from the angle that the main reason for buying the subsidiary was for the expertise and there was no guarantee that they would remain with the business which was being sold from under them by the venture capalist company who were attempting to make the business seem attractive whilst they could as year on year growth was slowing (330%, 60%, 23% respectively). There was loads in that question to get your teeth into if you disected the question and looked at the commercial reality under the hood. Quite often I think that P7 papers are set based on P2 knowledge but as the examiner has said before she can call on any expected prior knowledge and as such this question seemed more born of P3 (and to a certain extent P5) type knowledge. Q5 I think that there was a twist on the opinion at the end as there were two options, either the management improve the note or they don't and I gave the opinions for both scenarios with arguement. I almost did Q3 and missed Q4 but glad I went Q4 as once I started writing every point seemed to lead to other matters and that one that I almost skipped was possibly the best of the bunch on the day. I do not think that I did so well in question 1. Fingers crossed I picked up at least half the marks but I had difficulty writing at length about anything other thtn the overseas acquisition and even then, much that I wanted to write for foreign acquisitions did not seem applicable to the scenario and I've made that mistake before where I go off writing everything that I know and lose time. Also, there were 4 points for presentation of the briefing notes which would give one point for a conclusion but it wasn't the sort of answer where a conclusion seemed appropriate as there were too many disjointed facts. On the time side I finished just as the exam ended so at least not my usual of hoping to gain a pass from only attempting 70-80% of the paper! (It seems to have taken to here to realise that trying for perfection doesn't work when exams that could easily take 4 hours need to be sat in 3). Have I passed? No idea and not going to hazard a guess as I've had my hopes absolutely dashed before on wrong assumptions (my worst score ever was from the exam that I felt most prepared for). But, I gave it my best and enjoyed question 2,4 and 5... Just wished that Q1 had been more intuitive for me. Good luck to everyone espechially those like myself where this one is the final hurdle. Kind regards, Shaun.

I was the same so went with that its not allowed for listed clients as the risk being to high for such a subjective figure and that due to a partner of the firm doing the work, this would also create a difficulty for the audit team objectivity in reviewing his work. for the due diligence question, areas i forcused on was contracts, the employement contracts and where there was termination clauses to value any contingent liabilitys, retaining key creative staff was crutical so looking at freelance terms and conditions, how to contract them in to stay, and if they were any anti competitive contacts with them agreed so that they cant go and set up in direct competition with Mizzon. Looking into venture capitalist, and what funds he injected into the business on start up, what terms and conditions he agreed with the entreprenures, was there a premium. also what skills and resources he brought to the business (i kind of thought of them as a business angel, therefore, what contacts did he bring, did they bring the customers and will they say, the nominal rent, the contract should be looked at to determine what would happen in the event of a buyout. ascertain the market value of the rent to compare. the bank loan, what is the term, how much, the rate, would it be becoming repayable on demand in the event of a buyout. I got through Q1 and Q2, Q4 I struggled with a bit and then Q5 looked like a good question on going concern but only had 15 mins left so read for 5 mins and got down main bullet points. I hope i did enough to pass.

did anyone say about the disposal of broadway that it should have been classified as held for sale during the year, with the assets having to have an impairment review, if this was not done then profit on disposal would have been calculated incorrectly. also the reveues and expenses should have been excluded from the soci as held for sale so could be mistated. was it a separate line of business tho?? oh dear, i could have been on the wrong track here

About the due diligence question (b),any of you performed analytical procedures on the p/l given? how about question 4 (a) where the prospective client was involved in non compliance.should the auditor take the audit?

Hi Toosh007 We were already the auditor of the client but the question was whether to continue the engagement. I commented on that one that in order to continue with the audit we would require a payment on account. I said no to hand holding the client at the bank due to third party perception of our stance.. I also suggested that in response to the threat of putting the audit out to tender we would have no problem with that (I am personally much happier not being paid for not doing the work than not being paid for doing it and missing the opportunity cost of other work). Damn it... In hindsight I cannot for the life of me remember writing the word advocacy in that part of the answer... Hindsights a great thing isn't it!

I totally agree...3hrs flew so fast...

HI Khonkean how about the part for due diligence,what did you do with the profit and loss statement which was given? i did another variant for the p7 but i think the question were the same if i am not wrong question 4 (A) it was about a prospective client not a current one? the 4 (b) was the one you talked about:) this was about the bank.. oh in case it wasnt the same,then blame it on the variant difference:)

Gwen, yes i stated that Broadway should have been held for sale as per IFRS 5 during the year. I went on more about the lack of disclosure though which in hindsight was not really the issue in the current year accounts.

i dont think you guys need to discuss on the details of the answer.. it would create tension to some of our friends here who might not answered as what you guys did. i strongly believe we need to pay some respect to them. just chill bro and sis, we hv just finished attempted the paper, lets wait for the result and see if we could make it to the finished line. if not, accept as what it is and learnt from the mistakes. examiner report would be much more useful for us to use as a post-moterm result. just enjoy for this coming two months. we have put enough effort, at least give some space to your brain to relax. peace.

Hi Toosh007, Your probably right. A day later and some of the parts of questions have started to meld together in my mind so I may have forgotten important chunks of questions (and my answers to them) and may have inadvertantly moved parts of questions into slots in my memory that they do not belong in. On the P&L in Q2 I calculated the trends in revenue and operating as a percentage of revenue. That aside there seemed little to play with there (but such was sufficient to know that the venture capitalists wanted to be rid of the business as whilst healthy the investment seemed to be approaching the maturity stage of its life cycle). Oh, I did also use the P&L to calculate out the revenue generated from the lists as the lists themselves whilst internally generated becomes an seperatable intangibe as part of the purchase.

Hi Slumber, but surely the arguement is that if one does not want to think about the exam then one would not read this thread. The act of reading the thread therefore equates to wanting to ponder and discuss performance.

p.s. has everyone noticed that the questions are now available on the ACCA site here : https://www.accaglobal.com/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p7/past-exam-papers/international-stream.html

The question where there were unpaid fees.. I wrote that this could constitute a loan from the auditor to the entity and this is prohibited. A demand for payment must be issued immediately and the auditor should consider resigning from the audit if this is not paid.

Question 4 part c pensions valuations for a listed audit client. Acceptable or not???

Fair paper, though. Did not expect due diligence to be asked as a 25 mark question

Well i said acturial service acceptabale as it is immaterial to financial statement plus i said that acturial valuation expert partner cant be the partner for audit and indepedent partner review should be required to mitigate self review threat

yup, u are right khonkean. please continue with the discussion :-)

Hopefully we all pass..focus on next paper guys..all the best..

Does OT publish solutions to the papers?.. The P7 questions are on the acca website now

Shouldn't question 1 (b) be discontinued operations rather than held for sale...as disposal of subsidiary has taken place before the year end of the financial period? Year end was 31 dec 2013 and disposal took place on the 1st Sep 2013

https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/p7/exampapers/int/P7int_2013_dec_q.pdf

any one question 3? the matters to consider and the opinion for part or the responsibilties of auditors?

Well, I think it was fair but time was a factor to go through all the info in just 3 hours. Massive thank you to Open Tuition. I expect a pass.