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respected sir,,
I have a question regarding chapter 6 audit evidence open tuition course notes ..there is one example asking for the appropriateness of audit evidence: inspection of title deeds ..
Sir ,,inspection of title deeds ..is it not the audit procedure ? it says inspect.
please clarify
thank you
I do wish that you would drop the “respected sir” salutation! I’m Mike. I always have been – for longer than I can remember 🙂
“I have confusion in the statement itself…..
when materiality value increases, why the audit testing decreases .I mean if the amount is material we should test it extensively,.isn’t it .or Am I confused ?”Let’s say that our initial estimate of materiality was $5,000 and then, following our work at the interim audit stage where we re-assessed controls and inherent risk matters, we decided that we could increase our detection risk and still arrive at an acceptable level of audit risk
How do we go about increasing detection risk? By increasing our materiality level to, say, $7,000
So, instead of looking at all transactions over $5,000, we’re now only going to check those over $7,000 and that means that we’re checking fewer transactions (this is F8 stuff!)
“or the concept is like when the amount is so material that we cannot go on for testing as we already know that its material.” – is nonsense
Yes, the use of the noun “inspection” from the verb “to inspect” does suggest the result of a procedure carried out.
If I were to have written about “procedures to adopt” then I would have written “Inspect title deeds”
It’s a difficult one to get into an answer to a question that asks for “What evidence would you expect to find on the audit file?” but, if I bend my head around the wording, I would think something like “Evidence that title deeds had been inspected” would fit the bill
But a much more simple, easier, quicker, looser comment is “Inspection of title deeds”
OK?
Thanks so much .
I can understand that I am really weak in this subject.
I am trying MY BEST.
Is it ok if I am using the 2014 text book for p7 june 2016 exams ,,taking into consideration all the changes so far.should i buy the new book .if yes,, what should i buy the kit or text book ???
as of now i am using 2014 text book and kit (bpp).and taking into account all the additions of the topics from the net. is that fine .or is there something more technical that i need to know from the book .
looking forward for your reply
..could you please help in explaining how would a question about IAS 41 look like in the context of auditing..
what audit procedures should i perform ,to check ias 41 is accounted for properly.
If for example ,we have a scenario that the company business is of harvesting its own assets.how would it synchronize with the nature of businesses that we are usually dealing in questions,like manufacturing,wholesalers of catering equipments,small pottery making tableware,,and others …is this going to be a typical business……
could you please clarify using a simple example .
2014 text book should be ok – if you insist on using a text book!
The exam kit / revision kit too should be ok – but make sure that you download the exams for 2015 together with the answers from this site
In addition, make sure that you could audit matters related to IAS 41 and IFRS 15 – they may not be covered in a 2014 text
Just seen this! IAS 41 question? It’s unlikely to be a complete question in itself but, whatever form it takes, the application of a good dose of common sense should score you sufficient marks!
“harvesting its own assets” – there are statistics of expected yield from trees / plants of different age. There are expectations of the company’s harvest from prior years. There are likely contracts entered into by the company with independent wholesalers that will buy the harvested produce. There are statistics about how many labour hours it would take on average to harvest a tonne of produce …. and we can find from labour payment records how many hours we have paid for, so we can calculate an estimate of the tonnage collected. The wholesaler will likely give a receipt in respect of the harvest bought – that receipt will indicate the tonnage / volume / weight of the transaction. If the produce has not yet been sold on, it should still be in inventory. Inspect the inventory. Try to establish that the container within which the inventory is held does not have a false base
These are just ideas quickly off the top of my head – see if you can think of more now that I’ve started you off
..i would like to know that whether the new audit report format and ifrs 16 examinable in june 2016?
examinable documents does not indicate that it would .
please confirm
No to both
But don’t fail, because they’re going to be in September 2016!
That’s the way – get the exams out of the way before any more changes come in!
hello,,
i just wanted to confirm whether the four attempts in a year has started from march 2016 or also september 2015 session attempt also happened//?? as when i looking at acca webcite there is past papers for december 2015 /september 2015 given together …
looking forward to your r eply
I believe that the complete roll-out started in March 2016 but a relatively few selected centres around the World started in September 2015
hello,,
I NEED TO DISCUSS ABOUT IFRS 15.
this standard is extensively narrated in the article in two series .it quite confusing to understand it in the context of p7 for me ..as it goes on saying to record revenue according to the steps ..previously revenue recorded was when legal title/ownership transfers to the customers and agree to pay…risks and rewards are transferred to the buyer /willingness to pay.this whole thing is elaborated by means of steps and industry -specific(the type of contract).can u give light examples for ifrs 15 in light of p7
can i get your suggestion about your belief that how much in detail this particular standard /accounting issue will be tested as revenue is core in accounting and auditing .
what about the materiality levels .general range for materiality is to be same or different ?
can we use ias 18 ,if stuck up in exaM regarding any matter related to revenue?
plaese help
Forget IAS 18 – it’s like the dodo – it’s dead and buried
Materiality considerations remain the same
Ownership of assets has not changed in terms of risks and rewards …. but that really applies to specific goods that are separable
The problem with revenues from contracts is the same problem that has always existed – at what point in a long term contract, particularly where there is a post-sale maintenance element, should revenue be recognised
There’s not as much to this as you seem to believe. The 5 step approach is merely a procedure to ensure that any revenue that IS recognised is appropriately calculated
So far as P7 is concerned, you should be aware of those 5 steps and be prepared to “argue” with the directors when they are trying to include revenue that can be related to the entity’s continuing obligations
That should be enough for you
ok..
i would read those ifrs 15 steps again to keep them in mind …..i m not going to do in treatment and measurement part much as when i tried its confusing me as its typical of the business nature and contract involved .thanks for clarifying that ias 18 should be forgotten as i kept in my mind that if i would stuck in revenue i would use ias 18 ,,,so i saved myself for using wrong approach …..
i believe more than specifics if we give my own general description relating it to the scenario (regarding revenue),i could do much better (keeping in mind the critical events of recording it according to the 5 steps)
thats how i think i should go.thanks
…have a good day
Hi
That seems to be a much preferable approach and would likely score rather more than relying on IAS 11 and IAS 18 🙂
hello,
am i right in thinking that component auditor concept can be taken as its a joint audit because in groups sometimes component auditor work is done and used
“am i right in thinking that component auditor concept can be taken as its a joint audit” – er NO!
A component auditor is an auditor (other than the group auditor) involved in the audit of one or more subsidiary entities within the group
What on Earth makes you think that this must be a joint audit?
And it’s time to start a new thread! 46 posts on one thread is TOO MANY!
hi ,,
yeah thats not a part of joint audit ….first line in reading joint audit was that component audit work is different from joint audit …sorry i asked that after finishing component audit and before reading joint audit….it just came in …
about thread ..should i start a new topic for that .
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