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Showing posts from September, 2008

PT 1: ABSTRACT ANSWERS NO.1 (PAPER P3)

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- released answers for industrious P3 candidates only. But good fun for T5 and F1 candidates

Lecturer’s comments: with the new syllabus emphasis on professional marks, presentation that is concise and succinct becomes crucial. A babbling about approach will risk it all. Notice the report has an ‘Executive Summary’ section making it easier for readers (your panel of markers) to gain an overview picture. Part b is quite simple as you need to distinguish between corporate mission from mission statement. Its helpful to put a sample ‘strategic intent’ to illustrative its effectiveness over mission statement. You can choose any companies that have a huge success in that like Kohmatsu, Honda, Canon and even Southwest Airlines. The big risk here is students simply spent too much time here. Mathematically and probability wise, you cannot NEVER pass if you only attempt 50% of paper. At 75% total attempt of questions, the probability is notably very slim.

Disclaimer of liability: answers are for …

PT 1: ABSTRACT ANSWERS NO. 2 (PAPER P3)

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-extremely relevant to P3 but good for T5 and F1

Lecturer’s comments: overall the students performance are quite disappointing. There are easy marks available in part (a) explaining the GE-McKinsey model which was used numerous times in my tutorials but this was not evident in the answer scripts. Part (b) is very straightforward question in that reading the lecture notes would suffice



Pic 01: Giant conglomerate : Diversified Portfolio of Businesses
Pic 2: Power generator business
Pic 3: NBC Entertainment that gave you infamous CSI series
Pic 4: Home electronics and 'white goods' and 12 other industries
Pic 5: Jet engines for Boeing and Airbus [Yep! they are the WORLD's biggest supplier]

ANSWERS TO QUESTION 2
A) PRODUCT PORTFOLIO
Boston Matrix:
Mc George to treat the following:
1. cash users as ‘star’ product have promising growth opportunities market share and already possess high market share. Company seek to retain its market lead by INVESTING to expand production and distribu…

PT 1: ABSTRACT ANSWERS NO. 3 (PAPER P3)

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- relevant to P3

Lecturer’s comments: Part (a) is extremely popular question with examiner. Note that Steve Skidmore even put one question in the P3 pilot paper. Its easy to write and score. I am pleased that many candidates obtained a pass for this question. Others who didn’t attempt this question is simply due to poor time management in the test. Part (b) requires the integration of external analytical studies and internal evaluation. Admittedly this is not an easy question but if you link both topics, you can obtain sufficient pass marks.









ANSWERS TO QUESTION 3 - A:
EXPORT
Advantages:
1. Expansion overseas with minimal investment in capacity as likely it means to extend production time to night shifts or 7 day-week. A “staged international expansion” style of cautiously export using minimal investment in physical resources.
2. Many choices of export markets are opened. Ashkol needn’t limit itself to just one country as it could easily re-direct export target countries.

Disadvantages:
3. In…

F8: Illustrative case study

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- relevant to F8

Arnold Scwarzenegger was blur (just about everything) about how to explain to his nephew Donald Duck on audit of payroll section in his Californian government departments. The muscle man has asked you:

a) ummmm... duh* what should auditors look to achieve in audit assertion work relating to payroll? [4]

b) Descibe the procedures that can be used to ensure for a better payroll system. Demonstrate situations on improving the system. [4]

SUGGESTED ANSWER GUIDELINES
a) auditors seek to :
- wages are properly calculated
- employees are paid ensuring no phantom employees
-proper recordings are made and accounted for in the ledger payroll and correct classification
- proper deductions that are authorised and approved by employees and required by government

b) Exam approach : state on controls systems can be improved looking at Control Environment

state on control objectives / procedures to have stronger internal operations that is correct, accurate, appropriate, segregation of duties, …

ISA 315 : Understanding Control Environment and Control Activities

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- relevant to F8 (ACCA)





WARRIOR :
Macro approach (Control Culture) : Alert to dangers. Suspicious of enemies
Micro approach (Control activities) : He puts many guard soldiers, spies and dispatchers to secure his army

ISA 315 Understanding the entity and its environment and assessing the risks of material misstatement deals with the whole area of controls. It requires that auditors 'obtain an understanding of the entity and its environment, including its internal control, sufficient to identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, and sufficient to design and perform further audit procedures'.
The ISA states that internal control has five elements:
1. The control environment
2. The control activities
3. The entity's risk assessment process
4. The information system
5. Monitoring of controls

control environment above looks at the management "CULTURE" as to controls assessing management's toleration level …

AUDITORS' PROCEDURES : TESTS OF CONTROLS ON PAYROLL

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-relevant to F8 (ACCA)



If you are asked as to what steps you would take to ensure that payroll system is adequately installed of its internal controls, as an AUDITOR you could systematically take following steps. Remember, use key items like payroll lists, bank statements and specific documents to tailor made in your "application". merely regurgitating the following carries little or no marks.



STEP 1 : SETTING SALARIES & WAGES
AGREEING calculation of gross pay with:
· Authorised rates of pay
· Production records. See that production bonuses have been authorised and properly calculated
· Clock cards, time sheets or other evidence of hours worked.
·Verify that overtime has been authorised

VERIFY that gross salaries and bonuses are in accordance with
· personnel records,
· letters of engagement and
· increases in pay have been properly authorised.

STEP 2 : PAYMENTS
wages paid in cash
• Arrange to attend the pay-out of wages to confirm that the official procedures are being followed
• Exam…

WEALTH – AN ENVIABLE AMBITION? LEARN FROM THE TYCOONS

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GREED IS GOOD? - Michael Douglas in movie "Wall Street"



"WEALTH is like drinking sea water, the more you drink the thirstier you get."

Wealth does not create individual happiness and it doesn't build a strong country, either.
A study in the recent issue of Psychological Science in the Public Interest addresses how economic status is no longer a sufficient gauge of a nation's well-being. The authors argue that the psychological well-being of its citizens is the greatest measure of a nation-- not the well-being of its economy. "While wealth has trebled over the past 50 years…well-being has been flat, mental illness has increased at an even more rapid rate, and data, not just nostalgic reminiscences, indicate that the social fabric is more frayed than it was in leaner times," the authors state. Prosperity is neither the answer nor the cause of satisfaction. The study calls for an ongoing systematic set of national indicators of well-being to report on a…

MALAYSIANS - CALM DOWN!

- relevant to all CAT & ACCA candidates. (by extension the world)

“ISA invoked! Police detained 3 individuals who reported the truth as messengers but left the perpetrator scott free…” so the report goes. (The Star A, 2008; The Star B, 2008 )

Malaysians (especially CAT and ACCA candidates)! Calm Down! Change is the only constant. The political landscape is shifting. But beware, when the earth opens and shift as if an earthquake, it can swallow (many) victims.

You may not believe this, but Malaysia has good corporate governance with:
1. The Royalty family having ultimate military powers. They can invoke powers of intervention to restore peace. I meant in a good way. If you apply “Game Theory” it makes no sense for such powerful dignitaries to not want peace and order in the country they rule.

2.The police force is merely doing their job. They said racial tension is a biggest threat. That is true! Look at Rwanda where 800,000 lost their lives, World War II saw 6 million Jews snuffed out.…

EMPIRE BUILDER - MOST POWERFUL MAN

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-relevant to CAT : T5 & ACCA : F1, P3, P5 (please note that the article should be read in conjunction with my lecture class on Chandler's model on corporate growth)
EXECUTIVE SUMMARY
John Davison Rockefeller (July 8, 1839May 23, 1937) was an Americanindustrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and ran it until he officially retired in 1897.[1] Standard Oil began as an Ohio partnership formed by John D. Rockefeller and partners. Rockefeller kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first Americanbillionaire, and is often regarded as the richest person in history.

THE MOST POWERFUL INDUSTRIALIST IN HUMAN HISTORY
John D Rockefeller began as a humble oil business book-keeper in Cleveland, Ohio and in just seven years rose to control a tenth of the entire US oil business.
In the la…

WHAT BILL GATES HAS IN COMMON WITH COMEDIAN SEINFELD?

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- RELEVANTLY irrelevant TO ALL

I HAVE NO IDEA. Reading the latest snippets news on Google, I found this facinating advertisement , no intriguing. Is there meaning in meaningless advert? There must be some genius message in an idiotic advert. There must be! As the actors are the brightest minds in their own trade. One a comedian which gave us "Seinfeld" (mind you he is the only 1 of 3 other billionaires comedians in USA) and the other is one who locked us in with his Windows program that conquered 95% of "World's" software market. (For more details please visit : http://marcusong88.blogspot.com/2008/09/bill-gates-bad-role-model.html )






Pic 01: SEINFELD fame. A comedy about 'nothing'. Yep! Nothing!
I need your inputs. I really am very confused. As human, when we can't find logic in something, it drives us up the wall. Watch the video advert from Youtube (by the way, its fast becoming Youtube top viewers' favourite) and tell me please, no I implore you…

BILL GATES : A BAD ROLE MODEL

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- Relevant to all CAT and ACCA undergraduates


Pic 01 : What has the child and grandfather clock has in common? [read on]


Life is just like time - it's a one-way street. There is no turning back. The past cannot be undone. Only at best be repaired, as one wisen up in future to carefully avoid a repeat of past mistakes. When a student, I observe the playfulness of my classmates. The usual likings like cafes, snooker games or plain hanging about at street corner shops. To put things in perspective, in themselves there is nothing wrong in these activities except that if one make this a primary past time or overindulgence, then one can lose focus as to why we enroll in ACCA in the first place.

Why ACCA? Without a doubt its cheaper than an ordinary degree course but better recognition in terms of getting a job in the Prestigious Big 4 namely PWC, KPMG, E&Y and Touche Deloitte (some pointed out the 4th largest firm is BDO Binder if measured in terms of revenue size) . What is the catch?…