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a.2. ROMM:
If I mention that
– “IFRS 12 requires that the Group to disclose in the Note about interest and other details in Canary, but it might forget as it has not acquired any company since last 10 year”. Can I gain 1 mark for this?– “IFRS 15 requires revenue to be recognized when performance obligation is satisfied. However, Canary might recognize revenue when customer makes online purchase, but fail to care about the possible return. So revenue is overstated.” Can I gain marks for this?
– “Since Canary is acquired during the year, Pre-acquistion reserve could be wrongly used resulting in misstatement of Group reserve”. Can I gain 1 mark for this?
b. Ethics
– “if we decline that audit partner not join the board meeting monthly because audit partner is busy.” Get marks?
– “Secondment of 1 of Audit manager create self-review threat because audit team may be reluctant to question the work of audit manager during audit. However, since it may not be engagement manager, the threat can be reduced using the following safeguard. Inform staff to exercise professional skepticism and point out any errors if found.” Will this get marks?
I am sorry – these forums cannot provide a marking service, so please do not make similar posts. I will, however, on this one occasion, give you some pointers.
We do not describe ROMM in “human” terms (forgetfulness, carelessness, etc) – you should be looking primarily for inherent risks of misstatement (i.e. what is it about the transaction/balance/event that could give rise to misstatement) and be specific about financial statement assertions, where possible. Your 2nd point is probably worth a mark for having identified the risk of overstatement if inadequate allowance is made for sales returns but it you have been improved it you had made in clear that this is a cutoff issue.An “evaluation of ethical implications” calls for the identification of the ethical threats and discussion of available safeguards and whether the threat can be eliminated/reduced to an acceptable level. Your 1st point has nothing to do with ethics.
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