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1) Is the order of answering the sections of Q1 important with regards to the professional marks? i.e. can I answer c) part first and then a or b?
2) Materiality to Profit/Loss is calculated as a % of PBT and not PAT right?
3) Can I state that there is a risk of P&L being understated.. is that too general? E.g. the intangibles are at the risk of being overstated and p&l understated.
4) Is it compulsory to have the appendix containing the analytical procedure calculations at the very end of the briefing notes only?
5) will I get marks if I just calculate a ratio but am not able to use it in explaining risks?
“1) Is the order of answering the sections of Q1 important with regards to the professional marks? i.e. can I answer c) part first and then a or b?”
Order not important … but you MUST make it clear which part of the question you are answering at the start of your answer!
“2) Materiality to Profit/Loss is calculated as a % of PBT and not PAT right?”
Normally, yes. But it could be valid for you to calculate it as a percentage of profit after tax, or as a percentage of cost of sales, or as a percentage of printing, postage and stationery expense if you feel that you can glean meaningful information from those comparisons
These ratios are not exhaustive and you can compare one figure with any other … if you can draw inferences from that comparison
“3) Can I state that there is a risk of P&L being understated.. is that too general?”
I would expect some sort of quantification of the amount by which these figures are over/under stated and the comment itself can (should!) only come as a conclusion behind previous discussion about what the correct treatment should have been
“4) Is it compulsory to have the appendix containing the analytical procedure calculations at the very end of the briefing notes only?”
No, but it’s good style and it’s what should happen in practice. There’s potential for losing a style mark if you mix the detailed workings for the calculations in with the narrative
“5) will I get marks if I just calculate a ratio but am not able to use it in explaining risks?”
Do you think it’s worth a mark? Probably not. If a marker is feeling desperately generous there’s an outside chance that you may, possibly, scrape a half mark
But I wouldn’t bank on it.
Incidentally, why would you calculate a ratio with no associated risk in mind??? That’s illogical!
OK?
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