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

cant believe my luck , very poor time management, question on ethics and other professional matters was so simple , but by the time i got to it , the clock turned on me , left the whole question attempted around 78% , would have passed easily had i been able to attempt Q4 on ethics but so is life 🙁 ……. Still i prey for a pass , anyone else with same disgusting feeling of knowing u were almost there.aaaah Btw failed last time on 48 and attempted 90% that time 😛 , so if i do pass it wont be less then a miracle ….

@razmataz feel you brother , to think i would fail not because of my knowledge but because of poor time management and the question on ethics , man it was so simple and i did not even get to it , the feeling is terrible . still lets hope for the best 🙂

oh dear! fingers crossed anyway!

Not really sure what I thought about it… A lot to read and consider, and too little thinking time. Brain scrambled. Here’s hoping for a pass.

what did you write for the question 2 part (a) and (b)?

Benfits. Adds credibility in obtaining bank loan. Experitise of assurance providers, as the directors have not aquired the company previousaly .

A couple of my ROMM’s were:

FX movements
Goodwill may not be calculated correctly
Disposal of Sub may still be included in YE assets
Disposal of Sub may be masking Related Party Transactions
Going concern assumption without distribution centre
Inventory recorded at selling price – risk that assets overstated
Inventory in vehicle industry may need written down if held too long due to tech changes

Probably got these all wrong, but oh well…

hi , what was the ethical issue in part c apart from valuation service not allowed for listed clients ?. why were those numbers given ?.

I think they were given so you could calculate materiality of the actuarial valuation to total assets, and then state it is not material in value….but it is in nature, due the complexity of the calculation….I think

hope you pass

For Q2

a) Benefits – Due diligence review will ascertain whether the target company is in a fit financial state and is not saddled with debts. Also ascertains whether the target is appropriate with a competitive advantage in its business environment (no point buying a company which is useless). Third point – can’t remember

b) I found this quite tricky, threw me off!! I wrote about profitability over the various years, using the operating margin as a ratio. Recommended the SOFP be available so can calculate ROCE. Also requested that a break down of the COS was available to determine if GP margin and Operating margin were rising in line with each other.

Solvency – Calculated the interest cover for the various years and also requested information on the loans that were being serviced as the finance cost didn’t change – was this a fixed repayment, interest only or cap & interest? SOFP required for appropriate liquidity.
Ownership – are the founders on a contract after aquisition? Cannot control them as an asset as they are people.
Premises – following acquisition, what will the rent cost on commercial basis, how will this affect the profit.
Revenue Recognition – Were the two year products split evenly over life of contract?
Database – Has this been recorded as in intangible, cannot be as internally generated even though generates an income
Not sure what else I wrote for Q2.

Q1 i totally got a black out!

When it says risk of material misstatement, it is FS risk ( Inherent risk and control risk), can we include accounting standards? such as isa 21 for retranslation, stock wrongly accounted, not in line with ias 2 etc? please advise.

The paper was tough!!!

Insha Allah, I will pass…

Thanks for helping!!