ACCA Exams tips for September 2017 - Are you serious?

Dear ACCA - Future Chartered Accountants,

Famous phrase - "Be Forewarned is to be Forearmed" 




Pic 01: If you know what enemy questions are coming out, be prepared. 

So many years in ACCA lecturing that I really don't bother counting. Such experience are valuable as you understand examiners' favourite topics.

Please review the topics below.

The the First Time in lecturing history, I have the utmost satisfaction working with ACCA Candidates who joined on 2 months programme lecture-Revision Workshop and ready for the September 2017 exams.

Confident that you will do your 101% best.

Review the topics below:

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Exam Tips for 2017 September

F8AA

MCQs

Wide coverage includes:

·      Responsibilities of EA on fraud

·      Ethical safeguards against lowballing

·      Advantages of Audit Committee

·      Reasons to outsource IA Department

·      5 types of sampling

·      Statistical sampling error vs non-Sampling error

·      Corporate governance over EDs powers

Question 16

Audit Strategy relationship with Audit plan

Audit risks and Audit response

Internal Controls and New recommendations on Wages function (Reminder: ON recommendations insert “New Policy: [write the new procedures eg. Obtain Sales Director’s signature of approval by 4^th each month for new price list]

Substantive Tests on NCA items

Question 17

Ethical Threats and safeguards

Contents of Auditors’ Findings Report

Sources of information that are strong audit evidences

Question 18

Five potential indicators of Going Concern – include ratios

Audit Procedures to test the Going Concern assumption

Impact of audit report. (Reminder: must use at least 2 assumptions)

Question 19

Audit Procedures during inventory counts

Audit procedures on Intangible assets (Reminder: Use ST)

Audit Committee functions

CAAT – advantages and disadvantages

Disclaimer of Liabilities: Whilst the above are highly valuable to prepare your exam strategy, however, to over rely on them could be detrimental to your mental health and exam outcomes.

Exam Tips for 2017 September

P1GRE

Question 1

·      Stakeholders discussion on claims by Trade Union and pressure groups.                                                                [8 marks]

·      Explain corruption and bribery in context of relativists ethics.

                                                                        [6 marks]

·      Evaluate the impact of risks on business. (apply High impact and high probable events as Red Zone risks)     [8 marks]

·      Apply Tuckman if company should invest in medical project that requires testing on animals                                     [6 marks]

·      What is Kohlberg’s application on Board of Directors decision to divest from corrupt country and withdraw defective products from shelves?                                                   [8 marks]

·      What are the contents of effective Risks Committee Report?                                                                          [6 marks]

·      Why are the advantages of Environment report and Environment audit?                                                                  [8 marks]

Question 2

·      Role of Corporate Citizen in context of Proponents of Social Contract                                                             [7 marks]

·      What are the relationship between accountability with Pristine Capitalist.                                                      [5 marks]

·      Basic integrated report framework                    [5 marks]

·      Characteristics of Public Sector.                      [3 marks]

Question 3

·      Evaluate if company should adopt transparency [7 marks]

·      Evaluate the failure of chairman’s roles in case study [7 marks]

·      Evaluate the ineffectiveness of Nomination Committee and why NEDs shouldn’t earn variable salaries.                [6 marks]

Question 4

·      Why set up internal audit function?                          [7 marks]

·      Why internal controls are ineffective – external factors and internal factors.                                                         [7 marks]

·      What is correlated risks and why this is important when linking foreign exchange risks with customers risks            [6 marks]

Disclaimer of Liabilities: Whilst the above are highly valuable to prepare your exam strategy, however, to over rely on them could be detrimental to your mental health and exam outcomes.

Exam Tips for 2017 September

P3 BA

Question 1

·      Evaluate Current performance of each subsidiary. [Models: BCG, Benchmark, five forces]                   [15 marks]

·      Give reasons to support the acquisition [Models: FAS and Finance ratios]                                        [15 marks]

·      Recommend how to improve its current opeations. [Models: TOWS Matrix]                                        [10 marks]

·      Recommend growth strategies [Models: Ansoff, Core competencies, Strategic Clock]         [10 marks]

Question 2

·      What are the paradigm and configuration that predicts the company’s failure to adopt the new high tech business from basic manufacturing business? [Culture paradigm and Mintzberg’s configurations]                           [7 marks]

·      Swimlanes to simply, reduce wastes and add value [Exam reminder: each solution is 2 marks!]              [10 marks]

·      E-marketing and Customers relationship Management

[8 marks]

Question 3

·      Project Initiation Document content and value of Project Gatekeepers                                       [8 marks]

·      Analyse Simple Moving Average.            [5 marks]

·      Analyse the Decision tree                      [5 marks]

·      Contextual factors of strategic change   [7 marks]

Question 4

·      Human resources leadership styles and appropriateness

                                                             [10 marks]

·      Evaluate the expansion using the franchises, organic growth and high gearing                          [9 marks]

·      Porter’s Diamond factors                       [8 marks]

Disclaimer of Liabilities: Whilst the above are highly valuable to prepare your exam strategy, however, to over rely on them could be detrimental to your mental health and exam outcomes.

Exam Tips for 2017 September

P7AAA – Sept 2017

Question 1

·      Discuss specific matters to the planning of initial audit engagement which should be considered in developing audit strategy.                                                             (8 marks)

·      What matters to consider on the material misstatement risks factors to consider in the audit planning.               (15 marks)

·      Review the audit evidences you expect in audit file in relation to:

o  Acquisition of 88% of new subsidiary

o  Impairment of assets                                 (8 marks)

·      Respond email to the partner’s requirement.     (4 marks)

Question 2

·      Engagement Partner requires you to comment matters to consider and review the audit file evidences  for:

o  20 year lease of machineries with an useful life of 25 years.

o  Revaluation of Land                                   (8 marks)

·      Disposing 50% of Component to reduce holdings to 9% ordinary shares during the year.                                  (8 marks)

·      Discuss the auditors responsibilities relating the fraud cases in Finance Department. (Reminder: Include the NOCLAR implications done in our Revision-Workshop)     (9 marks)

Question 3

·      What is the implications on approaching audit with Quality Control?                                                               (6 marks)

·      Recommend principal audit procedures on the revenues recognition and the contract with property developer.

(6 marks)

·      Recommend principal audit procedures on the Prospective Financial Information.                                            (8 marks)

Question 4

·      Discuss the implications on the proposed advertisements for the audit services.                                            (6 marks)

·      What factors affect audit fee?                          (6 marks)

·      Propose the content for the tender document    (8 marks)

Question 5

·      Identify the going concern indicators.               (8 marks)

·      What are the additional procedures related to the subsequent events.                                                             (6 marks)

·      What are the impact on the audit report. (Exam approach: As discussed in Revision Workshop, clearly state the 2 scenarios that management may react to)                            (6 marks)

Disclaimer of Liabilities: Whilst the above are highly valuable to prepare your exam strategy, however, to over rely on them could be detrimental to your mental health and exam outcomes.

LADIES, BEWARE OF HANDSOME MEN!

 - strongly related to P7 AAA and abtractly in F8 and P1, Examiner's FAVOURITE Topic

BEST TIP for Studies: Believe in yourself!

Over 20 years of lecturing and other ventures* [see footnote, please]. That is an exciting journey to help and support so many ACCA under-graduates to succeed.

Enjoy my classes, I always have. You may recall in my class about the Forensic Audit Investigation that the evidences compiled are so strong that they are admissable in court.

A dashing Handsome man courted a single mom of 2 kids. He is irresistible with a catchy contagious smile. To add to his swerveness, he is a Grand Prix racer and respectable middle class family background.

The woman fell heads over heels for such a dream man. But this is to her detriment - her 'accidental' death. A perfect murder as the dashing man stands to collect an insurance premium worth RM16.5 million at present value.

When a love story is too good to be true, it usually is.

See article below and enjoy the Forensic investigation evidences. Do you see there are at least 7 evidences submitted to court that delivers a death sentence verdict on [cruel heartless] dashing man!

Lesson learnt: Don't trust [handsome] men, but yourself! Especially when they ask you out and skip ACCA classes!

Cheers.

Exclaimer of liability: The articles are written in fun, humourous style with no intention to target any individuals. The objective however is to MOTIVATE my students to NEVER GIVE UP in their quest to succeed in career/business.

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Sunny Ang and 'the perfect murder'

It appeared to be the perfect murder - there were no witnesses, and there was not even a body.
Yet, one-time Grand Prix driver Sunny Ang was sentenced to hang for killing his barmaid girlfriend, Ms Jenny Cheok.

Pic 01: Sunny Ang charged with the Perfect Murder

One of Singapore's most sensational murder cases, it marked the first time the prosecution had won a case that was based entirely on circumstantial evidence.

Ang was one of the last murderers to be sent to the gallows by a jury; Singapore abolished jury trials in 1969.

This week in 1965, the preliminary inquiry for the case was heard, and the court was told that Ang stood to gain some $400,000 from the death of his girlfriend.

Pic 02: Victim Jenny Cheok, 22, a single mother of 2

They had met in 1963 at the bar where she worked. She was 22 and he, 24.

Ang came from a middle-class background and had been selected to train as a pilot under a government scholarship programme, but his poor conduct during training cost him that dream.

Pic 03: Handsome but deadly

He took part in the 1961 Grand Prix, but landed in trouble later for killing a pedestrian through negligent driving, and attempted burglary. He was also declared a bankrupt.

Ms Cheok was a single mother of two who had not finished primary school.

On Aug 27, 1963, the couple went on a diving trip near Sisters' Islands and Ms Cheok disappeared.
Her body was never found.

Pic 04: No remorse face

All that was left was a single flipper she had worn, and its heel strap was found to have been severed cleanly at the top and bottom, likely by a knife or razor blade.

An expert witness would tell Ang's trial that the loss of the flipper would have resulted in a diver's loss of equilibrium and affected the person's mobility.

As an inexperienced diver, Ms Cheok would have panicked and drowned in the strong currents.
Ang, a skilled diver, stood to gain from the payouts of insurance policies he had begun buying for her two months before the dive trip.

He also had a will drawn up in which she left her entire estate to his mother.

In one piece of circumstantial evidence, it was revealed that an insurance policy worth about $150,000 had expired on the day before the diving trip, but Ang extended it just three hours before they got on the boat.

When Ms Cheok failed to surface after her dive, Ang did not seem worried and did not enter the water to look for her.

Within 24 hours, he tried to make full insurance claims.

Pic 05: Witness Ms Aryes Soh testified that Sunny Ang didn't go in search for his girlfriend in the waters

In May 1965, Ang was sentenced to hang after the jury turned in a unanimous guilty verdict.
The prosecution was led by Mr Francis Seow, who went on to become solicitor-general and an opposition politician.

Ang was defended by Mr Punch Coomaraswamy, who later became a high court judge and diplomat.
Ang failed in his appeal and plea for clemency, and was hanged on Feb 6, 1967.

SOURCE: AsiOne, 2015,Sunny Ang and 'the perfect murder',  http://news.asiaone.com/news/singapore/sunny-ang-and-perfect-murder, February 24

 P7AAA Exam style questions: 

a) What are the matters to consider when evaluating with client to perform Forensic Audit? [12]
b) Explain the audit procedures on compiling the evidences for client use. [6]
c) Explain the contents of Forensic Audit. [3]
________________________________________________________________________________
* Expert in Business analysis I am, also venturing into other businesses. One that is LOW risks and HIGH returns. If you are up to it, then send me an email at marcus_ong88@hotmail to explore if you like additional income of RM15,000 and above.

Warning: Not for the weak hearted but the determined spirited person.

Corporate Governance at PLAY: BP shareholders reject chief Bob Dudley's £14m pay deal

- relevant to F8, P1 and P7 

Corporate Governance is a critical hot topic. See how the CHECK AND BALANCE against Executive Directors powers are at play - real life. 

BP shareholders reject chief Bob Dudley's £14m pay deal

BP shareholders have rejected a pay package of almost £14m for chief executive Bob Dudley at the oil company's annual general meeting.

Just over 59% of investors rejected Mr Dudley's 20% increase, one of the largest rejections to date of a corporate pay deal in the UK.

The vote is non-binding on BP, but earlier, chairman Carl-Henric Svanberg promised to review future pay terms.

Mr Dudley received the rise despite BP's falling profits and job cuts.
Corporate governance adviser Manifest says the vote is at or above the fifth-largest in the UK against a boardroom remuneration deal.

'Last chance saloon'

In his opening address to the shareholders' meeting, before the vote had been formally announced, Mr Svanberg acknowledged the strength of feeling, saying: "Let me be clear. We hear you."
He continued: "We will sit down with our largest shareholders to make sure we understand their concerns and return to seek your support for a renewed policy."

"We know already from the proxies received and conversations with our institutional investors that there is real concern over the directors' pay in this challenging year for our shareholders.
"On remuneration, the shareholders' reactions are very strong. They are seeking change in the way we should approach this in the future," he said.

The Institute of Directors said the shareholder rebellion would "determine the future of corporate governance in the UK".

"British boards are now in the last chance saloon, if the will of shareholders in cases like this is ignored, it will only be a matter of time before the government introduces tougher regulations on executive pay," said director general Simon Walker.

Out of touch'

Shareholders that criticised the pay deals included Aberdeen Asset Management and Royal London Asset Management.

Investor group Sharesoc branded the pay deal "simply too high", while Glass Lewis, ShareSoc, Pirc and Institutional Shareholder Services have also expressed their opposition.

Earlier on Thursday, Ashley Hamilton Claxton, corporate governance manager at Royal London, told the BBC: "The executives received the maximum bonuses possible in a year when [BP] made a record loss, and to us that just does not translate into very good decision-making by the board.
"We think it sends the wrong message. It shows that the board is out of touch."

She told the BBC's Today programme that if 20%-25% of shareholders vote down the pay deal, it would force BP to "think long and hard about their decision".

The early voting figures suggest that the opposition is even bigger that she expected.

Analysis: Simon Jack, BBC business editor

Giving someone a 20% pay rise for a year's work that saw BP record its biggest ever operating loss seems perverse even by chief executive pay standards.
If it's any consolation, (I doubt it will be), bosses at Exxon and Chevron got paid even more than Bob Dudley even though the value of their companies fell by more than BP. That's the bit that sticks in the craw for many. Under what circumstances don't these guys get paid a fortune? It would be fine if some years you win, some years you lose - but they never seem to lose.
We may get a rebellion of 20-30% of shareholders today but even if it was more than 50%, the board doesn't have to listen. Shareholders do have a binding vote every three years on the pay policy and formula. No use crying now, the formula that spat out £14m for Bob Dudley was approved in 2014 by 96% of shareholders.

 Pic 1: New CEO after the BP's disaster in gulf. Does Bob deserve higher pay?

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BP's pay policy is subject to a binding shareholder vote every three years. It was last set in 2014, meaning new proposals are due to be put forward for shareholder approval again in 2017.

'Surpassed expectations'

Many experts argue that Mr Dudley is merely earning the market rate for international executives.
Mark Freebairn, partner at recruitment firm Odgers Berndtson, told Today: "If Bob Dudley was to leave [BP] it would be for a competitive company and remuneration would be part of the discussion. If you operate in a global market, you have to operate on a global scale."

BP was now in a far better position than when Mr Dudley took the helm, he said.
After the Gulf of Mexico oil disaster, BP's share price collapsed and it was forced to sell off assets worth billions of pounds to pay costs, fines and compensation.












Pic2: Deepwater Horizon disaster that costs BP billions in repairs and compensation. 



However, the collapse in the oil price over the past 18 months saw BP's profit tumble, and the company is axing another 3,000 jobs worldwide on top of the 4,000 cuts already announced.
A spokesman for BP said before the meeting at London's ExCel centre had begun that shareholders had previously backed the pay formula.

"Despite the very challenging environment, BP's safety and operating performance was excellent throughout 2015... BP's performance surpassed the board's expectations on almost all of the measures that determine remuneration - and the outcome therefore reflects this.

"And these clear measures derive directly from BP's remuneration policy which was approved by shareholders at the 2014 AGM with over 96% of the vote," the spokesman said.

Mr Dudley's pay package was less than that earned by some rivals in the oil and gas industry, including at Exxon and Chevron. But it was more than the award for Ben van Beurden, chief executive at Royal Dutch Shell, whose salary package fell from €24.2m (£19m) in 2014 to €5.58m last year.

Experts point out, though, that it can be difficult to compare like-with-like. For instance, Mr van Beurden's 2014 pay involved one-off pension payments and "tax equalisation" measures when he moved from the UK to the Netherlands.

And in 2015 Mr Dudley and Mr van Beurden received very different rewards under their long-term incentive plans, LTIPs. Shell gave its chief executive 8% of the LTIP, down from 49% in 2014. Mr Dudley's long-term bonus increased from 63.8% of maximum to 77.6%.

Source:

http://www.bbc.com/, 2016, BP shareholders reject chief Bob Dudley's £14m pay deal , http://www.bbc.com/news/business-36040210, Visited on: 22nd Sept, 2016

What does a lady mean when she says, "I am not free" ?

- related to F8, P1 and P7 

Pic 01 : " I really need to get away. But smile first."

You invite a lady for dinner. What does she mean when she says, "I am busy"? Usually, you have to use your contextual judgment to note the tone of her voice. If she says politely with a smile, this usually means I am not interested to go out with you. In contrast, if the reply is with round sincere eyes and with warmth in her voice and a gaze, well this 'could' mean that she really is busy. 

Pic 02: When is he going to ask me out?

But you have the advantage to read the body language in person. This is tough if applied to Corporate Governance context. Because Board issued announcement, thus you have no opportunity to read their body language.


On April 6th, 2016, Wintoni Berhad announced the entire Audit Committee and the Chief Financial Officer resign due to "personal reasons". Another Non-Executive Director earlier resigned due to "other Commitments". The entire board resigned? If 4 ladies tell you, I am busy, this is something to do with you, isn't it? Similarly, 4 top management resigned, that must have smelled fishy. 

This "Personal Reasons" coincide with the company losing 75% of its paid up capital. 

From F8 AA perspectives: 
This tells you the Internal Controls are weak enabling possible fraud and missappropriation of assets. 
You may need to explain Auditor's responsibilities in uncovering fraud as per ISA 240. 

From P1 GRE perspectives:
The Audit Committee is ineffective to probe and to review the internal controls and risks facing Wintoni.

The Nomination Committee is ineffective to promote division of responsibilities in order to reduce Executive Directors dominance over Board

The Executive Directors somehow are able to interfere and influence the Board that result in Non Executive Directors inability to review the company's strategy, risks and company's performance. 

From P7AAA Perspectives: 
This is the fun part. You as an engagement Partner would want to propose Forensic Audit and Internal Control Review engagement.  Of course, this is accompanied by fat fee: 

• propose the Audit Related engagement 
• plan out quality controls and boundaries. 
• determine the type of report required and its purpose. 

From an investor perspective: 
I have ONE WORD - RUUUUNNNNNN!! 

Pic 03 : You know what it means.

In another word - SEEEEELLLLLLLLL!! 

Pic 04: Oh my goodness. That is my whole tuition fee lost on stocks.

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On the Article, please enjoy. 

Wintoni CFO and entire audit committee resign

KUALA LUMPUR: Wintoni Group Bhd’s chief financial officer Kong Chin Lam and the three independent directors who made up its entire audit committee have resigned, citing “personal reasons.”
In filings with Bursa Malaysia, the loss-making automation system designer said Kong’s resignation was effective March 31 while those of Datuk Muzaffirah Yurhaningseh Mazputri Ahmad Fairuz, Suaran Singh Himat Singh and Haflil Feiruz Muhammad Feisol were effective April 1,
Wintoni said all the letters of resignation were received on April 4 (Monday).
The audit committee chairman, Chaang Kok Fai, had stepped down on Dec 8, 2015, citing “other commitments.”

Chaang and the three directors who resigned effective April 1 had appointed to the board on the same day (Sept 10, 2015).
In February, the company was classified as a Guidance Note 3 company as its shareholders’ equity on a consolidated basis is 25% or less of its issued and paid-up capital based on the unaudited consolidated quarterly results for the period ended Sept 30, 2015.
Among others, Wintoni is required to submit to Bursa Securities a regularisation plan and obtain the latter’s approval to implement the plan within 12 months from the first GN3 announcement (by Feb 25, 2017).
Wintoni posted an unaudited net loss of RM49.8mil for the year ended Dec 31, 2015, compared with a net profit of RM4.6mil achieved in the preceding year.
In the last six months, Wintoni share price has fallen more than 80% to 3.5 sen at Wednesday’s close.


Source: The Star, 2016, Wintoni CFO and entire audit committee resign, http://www.thestar.com.my/business/business-news/2016/04/06/wintoni-cfo-and-entire-audit-committee-resign/ , April 6th