*** P7 December 2015 Exam was.. Instant Poll and comments ***

@sbeeharry said:
For question one, there was something about deferred tax not recognised for revaluation made…any idea of the audit risks that should have been mentioned here?

I think deferred tax liability understated as not provided for at all. Difference between carrying value of sites (high due to revaluation) comparing to tax value. I’m not 100% sure that’s correct though

I might have misinterpret that part. In brief what came to me as relevant is that stakeholders and shareholders need other information apart from financial and what auditors are able to quantify and these can be measured by kpi that the company deem important to their success. Something off the line I wrote on.

I did the Irish variant and as like you, I used International Standards. Here’s hoping!! Question one ate up a lot of my time and that being said now that I look back I didn’t do so well.
The audit committee question asked about recruitment wasn’t it? And not pros and cons right? Or did I read it wrong?

What the threat you all comment on Q5b about outstanding fees? I wrote my answer as intimidation threat due to the financial director trying to influence the auditor decision in order to pay then the outstanding fees and self interest threat because auditor will trying to compromise to audit client for the outstanding fees.

Q5c only conflict of interest threat will arise? 6 marks is seen so much to discuss one threat!

How many points to write for audit risks to secure 18marks? I run out of time to wrote revaluation(IAS16) and deferred tax consequences… It’s hurt so much!

Hi,
Base on my calculation was immaterial to both profit and financial position because well below the threshold. But I concluded that it was immaterial in isolation.
If the leases should recognised as finance lease instead of operating lease, depreciation and assets will understatement and when those misstatements in aggregate might be both material and pervasive. So adverse opinion should then be express in audit report.

This is how I answer but not sure whether it work or not!

I considered a the WIP a construction contract under ias 11 since it is made to the clients’ specific needs so i used the % of completion and i spoke about the revenue recognition and deferred income

The exam questions were fair but time pressure and evidenced by my colleagues.

I managed to attempted all 4 questions.

Q1i just wrotwle about 8 points within 60 mins with points like fx risk, cg risk, materiality risks, credit risk, cash risk etc.

ii. Like review board minutes for the approval of the grants, obtain the respondence letter from govt., etc.

Q4 i wrote conflict of interest, confidentiality, self interest, intimidation, objectivity, independent, integrity etc. Use diff engagement partner and team, ………..

Q4 I wrote abt discredit to profession, members, luck of reputation, lowballing for and overdue fees will cause poor quality of work. Fees could be over the threshold of 10% for PLC and 15% for private. There is something like the no. Of members of 51% before they can be called charteredand under take the work but forgot to write iit down.

Q5. I remember it was subsequent event and whether the report should be amended. Forgotten what I wrote

Yes it was quite long. Demanding. It’s these games the examiner like to play. It’s a trick to see how quickly you could move on to q2. If not you will be playing catch up. Unfortunately she had me. Not sure you could call it a fair. Boring maybe. I am tired of this game.

I got q5 as immaterial lease to financial statements too but said chairman’s report is not consistent with companies “growth” for the year so you should add an other matter to the unmodified audit report.

Q1 was heavily time pressured. I chose Q4 and 5 which I thought seemed ok question wise but I had to rush through them so not sure how I will do.

@deejayahmed said:
Q5) the issue was immaterial, although i did add OMP (other matters paragraph) due to the Chairman’s statement who said they’ve grow substantially but when looking at F/S there was no growth!!
Did i do right?
for 4 mark i wrote
issues immaterial
no impact on opinion
OMP
OMP after opinion paragraph

I thought the 4 marks is spread to the 4 issues, wasn’t?

Q1 Audit risk was of 17 marks and we have to write atleast 12 well justified audit risk….. this took me around 50 minutes and ate whole time…………
.
then i left audit proceedures for 8 marks and move on to Q2 where i left 10 marks of part b

in Q4 it took me 45 minutes to complete ethics…….

finally for Q5 i had only 15 minutes left,,,,, HA ha haaaa…….
some how did part a only……….

Hi Guys,

q1)
Audit risk (18 marks)
Extra Inf (5 marks)
wip procedures (4 marks)
grant procedures (4 marks)
professional marks (4marks)

q2)
Going concern (9 marks)
procedures for going concern (6 marks)
kpis (10 marks)

q3)
held for sale/provision/discontinued ope (7 marks)
equity (7 marks)
operating segment (6 marks)

q4)
advertising (7 marks)
another general ethics question(7 marks)
confidentiality (6 marks)

Overall, the paper was far. But like everyone else Q1 took a lot longer than expected. The 10 mark KPI question didn’t help – even after reading the technical article I have no idea what was required. Q3 was also difficult in comparison to previous questions.

For the delayed info – I thought they were unable to complete analytical procedures – therefore Limitation of Scope

And yeah 500,000 so not material