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Showing posts from April, 2013

Are Malaysians Richer by 50%? Applying Audit Techniques (Part 2)

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- highly relevant to F8 and P7 candidates

A. If Malaysians Average Income have increased 49% from 2009 to 2012, why MORE qualify for the BR1M payouts?
When launching the ETP, PEMANDU said, “A key focus will be on ensuring that substantial improvements are made for people with the lowest household incomes.” Ironically, it is another so-called ‘achievement’ of PEMANDU which is really the total failure of the ETP in terms of raising the incomes of poor Malaysians.


The number of Malaysians eligible for welfare has been INCREASING under PEMANDU’s tenure. It was originally estimated that only 3.4m households comprising 53% of total households in Malaysia earned less than the RM3,000 per month threshold for entitlement to the RM500 Bantuan Rakyat 1 Malaysia (BR1M) handout . But ultimately, approximately 4.2 million applications were approved which resulted in RM2.1billion being paid instead of the originally anticipated RM1.8billion. Under the latest BR1M 2.0, which also includes individuals …

What are Substantive Analytical Procedures?

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Critically relevant to F8 and P7 Candidates
Tutorial Notes:
Explanation of analytical procedures
'Analytical procedures' means evaluation of the financial and other information, and the review of plausible relationships among both financial and non-financial data. For example, sales have a direct relationship with royalty expenses, provided royalty payments are based on the number of units sold. Therefore analytical procedures will include determining whether the sale for a period has a direct relationship with the royalty expenses incurred during the same period.


The analytical procedure also includes investigation of identified fluctuations and relationships that are inconsistent with other relevant information or deviate significantly from predicted amounts. For example if the relationship between sales and royalty expenses is not direct, then the auditor would investigate the reasons for the deviations because it indicates a possibility of a misstatement of eith…

PEMANDU: Malaysians income increased by 49%! Really? (Part 1)

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- relevant to F8 and P7 Candidates.  

The acronym that the Performance Management and Delivery Unit within the prime minister’s department is better known by. PEMANDU is the government agency that created and is now steering the Economic Transformation Programme or ETP.


The 2012 ETP Annual Report states “The country’s GNI per capita has risen from US$6,700 in 2009 to US$9,970* in 2012. This represents a 48.8 per cent surge in just a two-year period. Based on current projections and “barring unforeseen circumstances”, this gives Malaysia the potential to achieve a GNI per capita of US$15,000 earlier than the 2020 target.


Performing Tests of Details:






[1] PEMANDU still cannot get its basic math and data right. It said (nominal) GNI per capita hit US$9,970 in 2012, but also said it was RM30,809 and the exchange rate was RM3.058:US$1. However, at that exchange rate, RM30,809 is equivalent to US$10,075. It is shocking that this high-powered unit cannot even get the basics correct;






[2] PEMANDU i…

How can the Malaysia's General Election 2013 help you in your Audit Exams?

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- relevant to F8 and P7 Candidates. Also may be relevant to the 13.5 million Malaysian voters.

Exam Note: There are 3 articles in 2013 thusfar, on Audit. The emphasis on matters and Other Matters Paragraph were highlighted. Seldom tested topic on Culture Controls are also out. You should be familiar with these as they appear to be very high risk exam questions this coming June 2013 exams. 



Election fever is peaking. Both sides, government and opposition promised a Better Malaysia. Which sides would you vote? Before I embark on this hot topic, a disclaimer of liability is - in no way am I advocating sides. I am Neutral, politically speaking. I mean, I tried to apply membership with UMNO and PAS. Both rejected me for reasons I am still unsure about (tongue in the cheek). SO this is a neutral article but hopefully enjoyable in relations to applying audit principles related to F8 (AA) and P7 (AAA) of ACCA.
Investors make decisions but they should rely on External Auditor’s Report. Thus th…