FAE 2011 Where to begin

RonaldRayGun

Almost (and I do mean ALMOST) hoping for something along the lines of Foreign Currency Agricultural Cashflows in Hyperinflationary Economies, just so I can have some of that righteous indignation that sits so well with the presumption of failure.

Failing a fair paper is much more annoying.

Hanley

p13 wrote: »

What about audit? Would 100k debtor lead to with exception audit report?

I just said we needed to show evidence of post year end payments, failing that a debtor circ directly to the auditor MAY suffice, but if it's unlikely to get payment we should put a specific provision in place.

CPJM

Can somebody remind me, if you miss one indicator, can you still be let through on the basis that in that area (ie PM) you have done reasonably well on the other indicators?

RonaldRayGun

Hanley wrote: »

I just said we needed to show evidence of post year end payments, failing that a debtor circ directly to the auditor MAY suffice, but if it's unlikely to get payment we should put a specific provision in place.

I went with a clean audit report if they got thier act together i.e. made a/c adjustments if needed for Debtor to avoid Disagreement and supplied all the evidence that the auditor requested (mgt letter) to avoid LOS. Mentioned that if there were Going Concern Issue's re downturn it would still not be qualified, just emphasis of matter.

p13

CPJM wrote: »

Can somebody remind me, if you miss one indicator, can you still be let through on the basis that in that area (ie PM) you have done reasonably well on the other indicators?

They say you can't fail because of one indicator, but having failed last year, & this being my 2nd year, I have still yet to be told how you can get an on overall yellow in that subject e.g 2 indicators - miss 1, answer second competent, is that a yellow?!

Kingdomkerry

Really need PM indicators to redeme myself tomorrow.

As for audit. Mentioned weaknesses in internal controls, audit procedures to gain assuarance on debtor balance, ES2 on fees, and consider resigning as auditor because the weaknesses last year were not put right. And Subsuequent events re litigation? Thats alot there so not expecting too much for Auditing tomorrow

Possible qualified report because of limitation of scope?

p13

Kingdomkerry wrote: »

Really need PM indicators to redeme myself tomorrow.

As for audit. Mentioned weaknesses in internal controls, audit procedures to gain assuarance on debtor balance, ES2 on fees, and consider resigning as auditor because the weaknesses last year were not put right. And Subsuequent events re litigation? Thats alot there so not expecting too much for Auditing tomorrow

Resign? We weren't the auditors or have I missed something ?

Hanley

p13 wrote: »

Resign? We weren't the auditors or have I missed something ?

No, you were the company's accountant in the case.

RonaldRayGun

p13 wrote: »

They say you can't fail because of one indicator, but having failed last year, & this being my 2nd year, I have still yet to be told how you can get an on overall yellow in that subject e.g 2 indicators - miss 1, answer second competent, is that a yellow?!

Don't know but I reckon if there were only two and you missed one you'd defo need HC in the other to get yellow. That would seem to leave you on average in the RC (yellow?) zone between NA & HC.

So thats (NA+HC) / 2 = Yellow?

In theory.

netpia11

Completely screwed up timing today had no time for audit and IMP....also made a mess of IFRS2...

Indicators I went for

1. Corporate Governance- Internal control, board the usual crap...
2. Change Management with a lil bit of HR
3. PM - Went for a need to focus on other areas other then PBT and linking in a few KPI's and Balance Scorecard
4. PM- IFRS 2, IAS 2 (duno if this was a fundamental error), IAS 37 provisions, IFRS 3 and IAS 27, IFRS 8, IFRS 33 and 34 for listed company..
5. Tax - Holding Company - Participation relief, CGT relief, SD Relief
6. Finance- Due dilligence
7. IMP - New system, abosolute mess of it
8. Audit - No time....threw something down around 10 lines about limitation in scope and debtors balance (maybe make provision if not recoverable)?, also need clean audit report for 3 years to enter stock exchange

Completely left out: Organisational Structure- well said Holding co duno if that covers it

Sly indicators - Said they wanted keep as many shares as possible in management( requirement of IPO to have at least 25% available in IPO..
R&D tax relief- forgot to mention
Also possible patent company and protection needed for whatever crap they developed..

netpia11

also IFRS 1 for the IPO for the company with GAAP acc

netpia11

anyone on same lines?

Kingdomkerry

p13 wrote: »

Resign? We weren't the auditors or have I missed something ?

Said the auditors should consider resigning not that we were audtiors and should resign. Appendix 3 was specifically on auditing so I assumed that there was a large audit indicator

RonaldRayGun

netpia11 wrote: »

anyone on same lines?

Yeah, agreed. One line job on that.

okdune

netpia11 wrote: »

Completely screwed up timing today had no time for audit and IMP....also made a mess of IFRS2...

Indicators I went for

1. Corporate Governance- Internal control, board the usual crap...
2. Change Management with a lil bit of HR
3. PM - Went for a need to focus on other areas other then PBT and linking in a few KPI's and Balance Scorecard
4. PM- IFRS 2, IAS 2 (duno if this was a fundamental error), IAS 37 provisions, IFRS 3 and IAS 27, IFRS 8, IFRS 33 and 34 for listed company..
5. Tax - Holding Company - Participation relief, CGT relief, SD Relief
6. Finance- Due dilligence
7. IMP - New system, abosolute mess of it
8. Audit - No time....threw something down around 10 lines about limitation in scope and debtors balance (maybe make provision if not recoverable)?, also need clean audit report for 3 years to enter stock exchange

Completely left out: Organisational Structure- well said Holding co duno if that covers it

Sly indicators - Said they wanted keep as many shares as possible in management( requirement of IPO to have at least 25% available in IPO..
R&D tax relief- forgot to mention
Also possible patent company and protection needed for whatever crap they developed..

Yes - the above were all the indicators i used exactly. Totally messed PM cause I stupidly did it in a rush and also barely got to the audit. The other were ok. Now flipping terrified of failing cause of PM. I wouldn't mind but the PM wasn't difficult - just ran out of time...

p13

okdune wrote: »

netpia11 wrote: »

Completely screwed up timing today had no time for audit and IMP....also made a mess of IFRS2...

Indicators I went for

1. Corporate Governance- Internal control, board the usual crap...
2. Change Management with a lil bit of HR
3. PM - Went for a need to focus on other areas other then PBT and linking in a few KPI's and Balance Scorecard
4. PM- IFRS 2, IAS 2 (duno if this was a fundamental error), IAS 37 provisions, IFRS 3 and IAS 27, IFRS 8, IFRS 33 and 34 for listed company..
5. Tax - Holding Company - Participation relief, CGT relief, SD Relief
6. Finance- Due dilligence
7. IMP - New system, abosolute mess of it
8. Audit - No time....threw something down around 10 lines about limitation in scope and debtors balance (maybe make provision if not recoverable)?, also need clean audit report for 3 years to enter stock exchange

Completely left out: Organisational Structure- well said Holding co duno if that covers it

Sly indicators - Said they wanted keep as many shares as possible in management( requirement of IPO to have at least 25% available in IPO..
R&D tax relief- forgot to mention
Also possible patent company and protection needed for whatever crap they developed..

Yes - the above were all the indicators i used exactly. Totally messed PM cause I stupidly did it in a rush and also barely got to the audit. The other were ok. Now flipping terrified of failing cause of PM. I wouldn't mind but the PM wasn't difficult - just ran out of time...

I wrote nothing on tax. Is that game over for me?

Why????

i wrote nothing on tax either!!

Frig it no point beating ourselves up now!

okdune

p13 wrote: »

I wrote nothing on tax. Is that game over for me?

No I would say there will be loads of tax tomorrow. And you can totally make up for it.

Colts

Note to self: don't go onto boards thread tomorrow unless you want to go demented wondering if you missed something.

LightningBolt

p13 wrote: »

I wrote nothing on tax. Is that game over for me?

You'll just have to look to nail tax tomorrow.

Clanno

made a complete bags of 2 day's paper.... have to make up for it 2 mara..!!

trixabello

I ran out of time before I could go in2 the audit stuff, only got time to mention the controls not corrected and letter of rep, really home theres more on audit tomorrow to redeem myself, or does everyone reckon that was it?

LightningBolt

netpia11 wrote: »

Completely screwed up timing today had no time for audit and IMP....also made a mess of IFRS2...

Indicators I went for

1. Corporate Governance- Internal control, board the usual crap...
2. Change Management with a lil bit of HR
3. PM - Went for a need to focus on other areas other then PBT and linking in a few KPI's and Balance Scorecard
4. PM- IFRS 2, IAS 2 (duno if this was a fundamental error), IAS 37 provisions, IFRS 3 and IAS 27, IFRS 8, IFRS 33 and 34 for listed company..
5. Tax - Holding Company - Participation relief, CGT relief, SD Relief
6. Finance- Due dilligence
7. IMP - New system, abosolute mess of it
8. Audit - No time....threw something down around 10 lines about limitation in scope and debtors balance (maybe make provision if not recoverable)?, also need clean audit report for 3 years to enter stock exchange

Completely left out: Organisational Structure- well said Holding co duno if that covers it

Sly indicators - Said they wanted keep as many shares as possible in management( requirement of IPO to have at least 25% available in IPO..
R&D tax relief- forgot to mention
Also possible patent company and protection needed for whatever crap they developed..

I've a fair bit of that there. Not as strong on SBP.

Focused a bit more ethics as they're an energy company and the lack of maintenance could be an issue in years to come.

netpia11

LightningBolt wrote: »

I've a fair bit of that there. Not as strong on SBP.

Focused a bit more ethics as they're an energy company and the lack of maintenance could be an issue in years to come.

Whats SBP? also will fail on audit if it doesnt come up tomorrow got barely nothing on it down today..

burgerking1

There was most definitely a tax indicator in todays paper guys. they were going to float, unless they were going to float twice, only one company would have went public.

Thus a reorganisation was needed to enable both companies to come under 1 hold co thus enabling flotation of the 1 entity (the group).

Additionally, the re organisation would have termed them a large co for R&D tax credits UK and thus effected their direct R&D credits and withdraw there sub contracting ability. this is wat the numbers re employee numbers indicated from my view. Also VAT group registration possibly was a small side issue.

Additionally, the A/C issus re IPO I thought were
IFRS 1 - first time adoption as NRG was using UK GAAP. must be IFRS for public co.'s
IFRS 8 - operating segments applies to listed companies
IAS 34 - interim financial reports
IAS 27 and IFRS 3 - group accounts needed for all
NRG Y/E - this needed changed as IFRS 3 only allows 3 month diff. in year ends.
IAS 24 - inter co. transaction and on commercial terms. HMRC could also look at this area!

The change management and concerns regarding the PBT targets were a load of tosh. could have wrote anything on them and been load of garbage. was also an ethical consideration here.

Pushed for time with imp and due diligence at the end, the ranking on the due dligence was tricky enough as well i thought.

IFRS 2 was fine. one was equity other cash, two years journals required for both, outlined basic disclosures, handy enough in my opinion.

Audit grey enough as well. the capability of auditors to do audit for plc also needed questioning. provisions for a bad debt, IAS 10, internal control, ISA 315, management representations and ISA 700 all got discussion here. investors and clean audit reports etc.

Outlined corp governance, this was easiest topic in my opinion, KPI's for them to adopt, there were so many flaws it wouldve been difficult not to pick up at least 7 or 8

Overall could have been alot lot worse. also gives good indication of what remaining indicators could appear on the time pressured SIMS tomorrow.

FAEStudent1

What was the key issue with Clean Burn Technology + by-product thing about? FR - Intangibles (R+D)?

Was there something else in there with all the tonnage information etc? Not 100% clear what they were after in that section. Worried I missed something there.

The only other thing I said in relation to it was that for an outside investor - IP rights etc would be the first thing investors would rank at given the huge revenue potiential as a result of the incoming legislation.

RonaldRayGun

p13 wrote: »

I wrote nothing on tax. Is that game over for me?

I'd say there'll be a couple more obvious tax indicators tomorrow. There were 3 in total last year. They threw in a sly one last year on day 2 (OBC case study) and 2 other more directive ones over the 2 days. If you do well in 2 out of what-I-hope-will-be-3 you'll be grand.

Even if there's only one more you can still pass (according to the 'you can't fail if you miss one indicator' rule they like to jam down our collective craws)

netpia11

burgerking1 wrote: »

There was most definitely a tax indicator in todays paper guys. they were going to float, unless they were going to float twice, only one company would have went public.

Thus a reorganisation was needed to enable both companies to come under 1 hold co thus enabling flotation of the 1 entity (the group).

Additionally, the re organisation would have termed them a large co for R&D tax credits UK and thus effected their direct R&D credits and withdraw there sub contracting ability. this is wat the numbers re employee numbers indicated from my view. Also VAT group registration possibly was a small side issue.

Additionally, the A/C issus re IPO I thought were
IFRS 1 - first time adoption as NRG was using UK GAAP. must be IFRS for public co.'s
IFRS 8 - operating segments applies to listed companies
IAS 34 - interim financial reports
IAS 27 and IFRS 3 - group accounts needed for all
NRG Y/E - this needed changed as IFRS 3 only allows 3 month diff. in year ends.
IAS 24 - inter co. transaction and on commercial terms. HMRC could also look at this area!

The change management and concerns regarding the PBT targets were a load of tosh. could have wrote anything on them and been load of garbage. was also an ethical consideration here.

Pushed for time with imp and due diligence at the end, the ranking on the due dligence was tricky enough as well i thought.

IFRS 2 was fine. one was equity other cash, two years journals required for both, outlined basic disclosures, handy enough in my opinion.

Audit grey enough as well. the capability of auditors to do audit for plc also needed questioning. provisions for a bad debt, IAS 10, internal control, ISA 315, management representations and ISA 700 all got discussion here. investors and clean audit reports etc.

Outlined corp governance, this was easiest topic in my opinion, KPI's for them to adopt, there were so many flaws it wouldve been difficult not to pick up at least 7 or 8

Overall could have been alot lot worse. also gives good indication of what remaining indicators could appear on the time pressured SIMS tomorrow.

Could you give a round up of what you think for tomorrow please? completely messed up audit today

Vaioer

FAEStudent1 wrote: »

Was there something else in there with all the tonnage information etc? Not 100% clear what they were after in that section. Worried I missed something there.

Yeah,

I though that. I had 2/3 lines on the fact that the rising costs would make the PBT target harder to make, may lead to more short term decisions(deferral of training etc) which end up costing more in the long term, tried to link it more to the need for new KPIs etc.

Rickyroma

okdune wrote: »

No I would say there will be loads of tax tomorrow. And you can totally make up for it.

I'm not convinced about there being a tax indicator. I think that what people mentioned is valid in respect of Holding Co but the focus seemed to be on a structure to allow floation of One company and also with a focus on the Fin Rep consequences of floatation.

They seemed far more worried about disposal - which is where Section 626B would come in.

If there was a tax indicator it would have been extremely theoretical which is something I think these exams tend to try to avoid.

I brought up Hold Co, group relief for SD and CGT, 626B and hived off the assumed patent income into another co, but in the context of group structure. Even while writing I felt I was forcing an indicator rather than answering one - so I shied away from general chat about Reorg relief as it was just too open - anything would have been valid.



The main point is that if enough people felt there was an indicator there - then they will have to allow one to be there. But I think it can be argued either way.

So don't think that if you missed it you are in trouble. In my opionion it is reaching and there will almost certainly be two tax indicators tomorrow. The marking of the exam is a fluid process - if a significant minority come up with a reasonable interpretation (i.e. a tax indicator) this will be allowed. There is very little set in stone (other than directive indictors) is my understanding.