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@Rahim: Q1 part a] I thought we are on planning stage not initial engagement(before accepting the client where management integrity etc is the case)?
I wrote down re. analytical procedures as part of strategy rather than substantive as company is big,we need to comprehend control environment.did anyone spoke about strategy and what strategy to implement?@tez
“planning of an initial audit engagement”.
questions are out.1) a) I went on the lines of areas of risk such as operational, compliance, financial and challenges of materiality new client and previous auditors circumstances of resigning.
Anyone calculate any ratios for 1b for a few marks? I thought for a few easy marks GPM, OPM & Interest Cover?
Found time pressure the main concern and only managed a further 6 audit risks for 1b.
In the end i had to bullet point the majority of my answer for Q4b and pretty much all of it for 4c. Pretty worried now, what i was writing felt good in the exam, but who knows. And reading your comments is making me feeling like i have missed out on a few items.
Totally cocked up Q4b as was worrying for time, and one of my bullet points mentioned the possibility of tax evasion/avoidance of the audit firm by off-shoring. Haha!
All in all, I thought it was reasonable, but certainly not one of the easier P7 exams of the past based on mocks going back to 2010. But, it certainly was VERY time pressured! I needed at least another 20 mins to finish my question 4!
Ahh, roll on 1st August!! I’m so anxious already!
Time pressure is the biggest issue. Its very difficult to assimilate the information quickly to put a coherent well structured answer with enough detail required.
For me the P2 standards may save me.
What did people do for 2 a) part (I) – I went with
2) a (I) there was two separate transactions that are both linked. De-recognition of asset IAS 16 and the creation of a finance lease asset which meant the sale proceeds >FV had to be deferred over the 20 year lease term and could not be recognised immediately. I also mentioned that in derecognising the asset, its sale proceeds less cv as opposed to fair value which may also need to be considered. The lease asset had 20 years depreciation as opposed to 21. So many tricks in that part all P2.
Some people say IFRS5 but I am not sure if it leisure centre qualifies for that because the activities are not being discontinued.
i think we can point these out when they send the feedback forms as they do after each sitting. I think that is where all the complaints can be put to good use..
In truth, the paper was not horrible, but there was tooo much to write for each question.If one had to answer all questions as it should be done, it would have meant maybe leaving off one whole question..so either way, you are trapped between the devil and the deep blue sea…either way..you are dead!- Topics: 0
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Hi Tez
in Q5 (a) Why 15% of $5mil to be recognized? How you got 15%? As per IAS – 11 $2.5mil should be recognized hence profit was overstated by $2.5mil.
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Hi Tez
in Q5 (a) Why 15% of $5mil to be recognized? How you got 15%? As per IAS – 11 $2.5mil should be recognized hence profit was overstated by $2.5mil.
It was a 14 month contract and 7 month profit and revenue to be recognized assuming evenly completion of work. 15% is unrealistic.
@tez said:
paper was not good as questions were open ended-I mentioned a lot of accounting standards to substantiate answers. a few clarifications if anyone remembers:
q5-construction contracts- revenue to be recognised based on stage of completion-did anyone write that down?15% of the $5mil should have been recognised for the year-did anyone write that down?
i cant remember what was the other part of Q5.Q3: 1st was a sale and leaseback-substance over form risks and rewards saty with the company-incorrect treatment of being recognised as an op lease-did anyone wrote that?
the other part for recognition of associate instead of a sub-mentioned that voting rights/share interest -more investigation needed for substantiating sub or associate-integration of systems??what was that about?Q2: did anyone remember the indicators for goodwill impairment?the prof skepticism is a very VERY open ended matter so i just put down everything i knew relating to Silvio etc etc
Q1: This was really tricky as it had way too many things to discuss-for part b(17 marks?!?)did anyone mention about forward contracts and related party transactions and short term investments?
for strategy-did anyone mention about doing analytical reviews rather than substantive(transaction balances)as company size and complex-1st time client etc?
what about resources available in audit company?paper was very daunting and time pressuring i did not manage to answer all of the parts of each question:(
@malimerchant:you are absolutely correct,i misread the questions and applied incorrect % of completion!
tbh,i dont know how many marks one can miss if calcs are incorrect(due to silliness)yet applies standard correctly when assessing materiality-does anyone know?
i dont have any confidence!!!- Topics: 0
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Nothing out of this world but time is surely a big enemy in these kind of examinations
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@Tez dont worry.
1 mark for materiality, 0.5 mark for calculation, 1.5 mark for accouting treatment and risk, 1 mark for impact on report.
So nothing to loose much. Good luck !!
@tez said:
@malimerchant:you are absolutely correct,i misread the questions and applied incorrect % of completion!
tbh,i dont know how many marks one can miss if calcs are incorrect(due to silliness)yet applies standard correctly when assessing materiality-does anyone know?
i dont have any confidence!!!Thanks God…i didn’t attempt this time. It was very difficult. I will attemp
t in Dec 2015…:-)The paper was a fair one but highly time-pressured.lts difficult to give sufficiently detailed answers due to time pressure.The time-frame is simply unrealistic.Hoping to pass though!
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Difficult paper presurred by time
When will answers get released so I know if to start studying for Sept session? Topis still very fresh in my head I dont want to forget them and have to restart all over again 🙁
I didnt even cop on to that into the exam.
Surely IAS2 Fr. Jack drinking the stock might have got you an audit risk mark!!
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