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F8: Answer for Audit Report

Dear Hard-working ACCA F8 Candidates,

Pleased to provide the answer below for your good reference.

Work HardER,
Marcus

Answer E for Question on Audit report
ISA 260: Reports to Management requires auditors to communicate with management over the following matters namely:
• Ethical threats discovered during the audit engagement that may question the Professional due care, independence, objectivity and integrity of the audit team members and/or engagement partner.
• Stating the overall scope of audit and its limitation especially highlighting reliance on client’s internal controls and the limitations of using sampling when performing Test of Details substantive test.
• Highlight the significance of accounting policies change impact on client’s presentation of accounts.
• Requiring significant audit adjustments. This means the item misstatements have exceeded AUDIT THRESHOLD.
• Significant disagreement with management on Financial Statements and/or Disclosures.
• Expected Audit Report Modi…

Would you like to 'earn' (Unethically & Immorally) RM25million (US$8.34 million)?

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Relevant to P1 and P7























Pic 01: Quiz: Which two directors are charged for corruption? One is from Singapore and another is a "Datuk". (Clue: Read the article below)

Pic 02: Profitable Monkey Business?


Dear ACCA Candidates,

We are all taught to calculate Risks and Rewards Balance. What if your spend 2-10 years in a business with some hardship of long ‘idle’ hours but assured of Returns based on no investment of RM26 million? Interested? Well, Malaysia Legal and Corporate Governance would afford your such opportunity. If caught, you get to spend 'idle' time in Sg. Buloh jail.

Two directors of a Public Listed company, Multi-Code Electronics Bhd, were accused of cheating the company of that amount. The punishment is… are you ready? – minimum 2 years imprisonment, extendable to 10 years with early discharge for good behaviour. Here is the unethical part, you only pay a fine of RM1 million and that is maximum! Yes, you get to keep the balance of RM25 million. Where is the justi…

Uncles Tans and Aunties Maggies that Never Learn

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- related to F8, P1 and P7 ACCA students

























From Left to Right:
Pic 1: Uncle, got burned?
Pic 2: Perhaps I should listen to my ACCA son studying F8 on avoiding poor Corporate Governance firm?
Pic 3: Do you board a plane after knowing the pilots are negligent? What about Executives on Board?


In 2008, I highlighted in F8 classes the working tools of corporate governance involving External Auditors. (Please visit earlier blogs below). OilCorp executive directors were adamant on their accounting treatment for valuation of asset upgrades involvingi RM20 million in which auditor Baker Tilly disputed.

As shareholders, one will be wise to heed the 'check and balance' call from External Auditors. Surprisingly, Oilcorp berhad's shareholders were 'upset' with External Auditors for causing the fracas and resulting in shares sell down. You know what- shareholders in AGM voted to replace the External Auditors!! Whose duty it is to prepare Financial Statements? Why are auditors punishe…