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

In qs 1 i dscussed to perform revaluation at mid year so might be risk of window dressing, going concern issues, cashfliw problems etc

I learned by heart all isas from isa 200 to isa 707 i knw each n every n used them frequently in paper dunno it gona help me or not?

Q1(b) Ethical matter on due diligent. Anyone knows how to answer this part? What is the ethical issue here? Self review? So can I put chinese wall as safeguard? Q4(a) There is a question on FI. Hedging and forward contract.. Matter to consider.. It's on IAS 21? I wonder how to answer this part? >.<!!! Overall a fair paper for candidates who studied well.. Especially those who knows the standards.. Just hope on a 50%.. =(

<cite>@fhamoud said:</cite> The exam was fine unfortunately am not expecting to pass as I did only 3 questions 1,2 and 5 I forgort that had to select two options questions

With the new format for June 2013 you only need to do three Q1 is 50 marks plus two of three 25 marks in section 2

<cite>@vjsharksn said:</cite> OMG Q5. was subsequent event????? i didn't noticed that :O

I don't think the whole thing is subsequent event. First part. There is IAS 37 on provision.. Second part. There's 1.6m trade receivable (material). But after year end the company went insolvent and can only cover 10%.. I think this is non adjusting subsequent event. (Not sure) Third part.. Chairman Statement material inconsistancy.. It's after balance sheet date not sure the examiner want to test on ISA720 or IAS10.. Anyway, I screwed them up =(

<cite>@alicia21 said:</cite> With the new format for June 2013 you only need to do three Q1 is 50 marks plus two of three 25 marks in section 2

This is not correct it's compulsory to do question one and two and then two from three options. Please see here https://www.accaglobal.com/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p7/exams-p74/examiner-approach-to-paper-p7---updated-march-2013.html

Ya.. Question 1,2 and 5 is like 80% out of 100%.. Anyway, Question 1 is super time consuming. My friend couldn't finished up her optional question too. You are not alone.

I thought it was a fair exam, the only part that slightly threw me was the forensics part. I answered about determining the value of inventory held via evidence such as sales orders/despatch notes. I also discussed the possibility of it not being theft but internal fraud and that inventory should be checked so that no "stolen" items were put back into inventory or used to fulfill customer orders. Everything else seemed fine, though for part iii in question five i stated that no adjustment would be required but an other matter paragraph should be used! Fingers crossed it all went well!

oh and i thought that it was an adjusting event in part B of question 5 because insolvency is not a sudden process, the likelihood is that there were bad debts that should have been accounted for at the year end, I vaguely remember being told something in tuition about this and that it should be adjusted for. The value of adjustment was where i struggled!

<cite>@05008967 said:</cite> This is not correct it's compulsory to do question one and two and then two from three options. Please see here https://www.accaglobal.com/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p7/exams-p74/examiner-approach-to-paper-p7---updated-march-2013.html

I know it changed for P5 assumed it changed for P7 also, luckily I didn't do this paper. :)

paper was too much time constraint. i was not able to do one whole optional question no 4 . the requirement of matters to consider were not clear enough... question 1 was more of a 50 mark question time wise rather than 35 marks....in terms of time alloted.... i can just hope i pass....

This was also a resit for me, my second attempt. Although I think it was better than December sitting, I could never tell with this exam as also in December I came out of the exam truly thinking I have done enough to pass but ended up getting 46. There were some hidden tricks in this exam, the first point is time, there is so much time pressure that even if you know what exactly you want to write, you start to waffle a bit. Q1 as expected audit risks came up but the analytical procedures part threw me off a bit. I mentioned 12 risks, I know bit excessive but just to make sure. The scenario gave lot of Business risks and I believe the examiner was trying to catch us out by seeing if we can identify only the Audit risks. Briefing notes were fine with the introduction, conclusion and format so hoping I get those 4 marks. 1b I understood it as the company was asking us to provide a due diligence report and ethical implications of doing this, I identified possible ethical dilemmas and offered some safeguards. Overall it was an ok question, I overran on the time by 10 mins though. Q2 was good in part a, part b was ok too but the procedures were specifically to prove the amount of loss so was tricky. I should of done Q4 first but decided to go with Q5 and this was my worst question I think. part c I said the chairman was lying about revenue levels so it was pervasive to the users of the financial information. Q4 part a I mentioned about the responsibilities of both managers and auditors regarding fraud and how the events happened a month after the report but also the auditor could be liable as they didn't perform the necessary procedures required on the payroll systems. Part B regarding the financial instruments, I talked about complexity, manipulation by using wrong fair values and how certain instruments needed to be accounted for using split accounting and done few procedures on the forward exchange contracts. Overall there are so many points to consider but because of time there is immense pressure especially section b questions. However just to say, I was feeling happy after the exam but reading some comments on here worried me a bit especially about Q5. Oh well good luck everyone now got my final paper P6 on Friday and hopefully I will be finished for good.

getting the information down onto paper in the time available was a serious challenge this time. I could have happily spent three hours only on question 1 alone which reminded me that the examiner stated this tiime that there would be a lot of information in questions and we would have to filter what was important. The problem was that it all seemed important. Doing all of the calculations up front before getting down to the point earning reminded me of the directiion that P5 has gone in where if you are not selective you can end up doing a huge number of calculations that earn nothing and that calculation time really eats into the three hours.. Maybe that is now the direction of the options papers in that its ceasing to be about what you know and moving to filtering what you write. The time on the calculation cost me 12 points in that the last part of each of the options got missed (I did write a little about Hedge accounting but if a I one point from that I will be lucky). I don't think that this was a easy paper but I think that it is the paper that we had prepared for which made it seem reasonable. I do think though that it was a time pressured paper and hope that is taken into account by the markers. I'm not going to guess at whether or not I've passed as I've had papers before that I thought were in the bag and were narrow misses and papers where I've come out of the hall having missed whole sections and passed so all I can do is keep my fingers crossed for the next couple of months and hope that everyone else gets the passes that they deserve.

Did anyone else calculate ratios in Q1? Hope I haven't stupidly gone down the wrong route :S

I calculated debt ratio and liquidity ratios (inventory turnover and account payables) but went out of time

Ratios were a good idea because analytical procedures were mentioned but I only done inventory days as it went out of my mind and time was running out.

P7 paper: This is what I remember!! Q1 a: Analytical Review+Audit Risks Evaluation+Additional Info reqd at planning stage for audit risks evaluation. b: Ethical issues raised Q2 a: Quality, Ethical and professional issues raised b: Forenic accounting services against theft for insurance claim Q3: Matters to consider and the audit evidence expected to find Q4: Not attempted Q5 a: Implications on the completion of group audit and the procedures to be performed b: impact on the group audit report

Does anybody have a clue what the additional info requested was?

Can anyone tell me when asked about ethical issues faced - should we mention about the additional non audit service - due diligence provided by the audit firm or ethical issue faced by the client.....because in question believe it asked for ethical issues faced by your firm.....i am not sure.....please reply.........

i think its about going concern

@basilahmedh This is exactly what I done mate so hopefully, I said there was nothing wrong with providing non audit services as long as safeguards were in place. I recommended to discuss it with both clients as confidentiality was involved and also Self Review threats can exist as we will be providing a report on the areas we have audited for the other client.

Additional info could be like the results of the research and development on the new ingredient. Terms and conditions of the loan.

I hope I pass, think the paper was fair although very time pressured(too much information and all appears relevant to what is required): Question 1: a)Detailed analytical procedures mainly accounting ratios of profitability, liquidity and solvency. Described the audit risks that I could identify and recommended additional information that may be required. b) Discussed the ethical problems of accepting the due dilligence procedure as was an audit client! Used the briefing note format, addressee, introduction, body split between a and b and a conclusion on both a and b. Question 2 a) Quality control, ethical issues about junior staff being assigned complex tasks etc think got enough points for at least 50% of the marks b) Forensic audit made some points about what we should do in planning for the engagement and then spoke about audit procedures that would be required to be performed to assess the extent of the fraud (Not sure will see how this pans out, hadn't read that section) Question 3 Application of different standards and what I would expect to find to address the risks that the specific standards pose! IFRS5, IAS17 and disposal and revaluation IAS16, and license IAS 38 intangible assets, hope I scrape! Question 5 IAS 37 provision and adjustment to amount recognised even though not in line with local reporting requirement do not recognise in individual accounts but qualifies for recognition in consol accounts per IFRS so make adj for that. audit report would be modified if not adjusted said material not pervasive so modified and not adverse! Trade receivable material balance, and significant overstatement of profit and receivables therefore adjust. Also said that audit report would be modified if not adjusted said material not pervasive so modified and not adverse! Chairmans statement needed to bring in line with financials as they will be presented together, Request he adjusts his statement if not include other matter in report detailing the impact! Hope this gets me a pass! Hopefully my first and last attempt at this paper! Good luck to all

<cite>@basilahmedh said:</cite> Can anyone tell me when asked about ethical issues faced - should we mention about the additional non audit service - due diligence provided by the audit firm or ethical issue faced by the client.....because in question believe it asked for ethical issues faced by your firm.....i am not sure.....please reply.........

My answer for ethical included: Management threat by potentially influencing the business into going ahead with the takeover which threatens objectivity. Self review for already auditing the takeover target, suggest asking third party to provide advice to minimise objectivity threat Self interest threat for seeking additional fees on advice, safeguard is to decline to offer advice as not part of the engagement terms. Potential advocacy threat for appearing to promote the companies position in seeking takeover

Hi

Is it only me but for question 5c the chairman lied about revenue saying it has increased 20% when it only increased by 6 % therefore misleading the shareholders and users of the financial statements? It is pervasive as it makes the financial statements unreliable?

i believe the chairman's report isnt audited as such and only reviewed for consistency with the FS, if not amended then only need to make users of the accounts aware of the inconsistency.

<cite>@ugras05 said:</cite> Is it only me but for question 5c the chairman lied about revenue saying it has increased 20% when it only increased by 6 % therefore misleading the shareholders and users of the financial statements? It is pervasive as it makes the financial statements unreliable?

Not sure it is pervasive and he did not lie that has to be established need to enquire with him and propose adjustment if not adjusted then other matter in opinion paragraph! We would have performed detailed procedures on revenue and would have established that it is ok and no qualification! Have a read on other procedures!

<cite>@bmparadzi said:</cite> Not sure it is pervasive and he did not lie that has to be established need to enquire with him and propose adjustment if not adjusted then other matter in opinion paragraph! We would have performed detailed procedures on revenue and would have established that it is ok and no qualification! Have a read on other procedures!

Agree in an other matter paragraph!

<cite>@laura9876543 said:</cite> i believe the chairman's report isnt audited as such and only reviewed for consistency with the FS, if not amended then only need to make users of the accounts aware of the inconsistency.

Agree in an other matter paragraph!