FAE September 2012

EveT

Does anyone know where there is a sample audit working paper or have one they could upload? Thanks!

7upfree

supernova84 wrote: »

Just some random things I've come across in the cases that could be linked together when answering a specific indicator. If anybody has other suggestions please add.

• Seeking a listing - Ensure good CG structure in place
• If error in this year a/c's - Possible error occured p/y aswell, mention IAS 8
• Holding high levels of Inventory - Mention ways to reduce/control (EOQ, MRP, JIT, ABC)
• Cost reduction - Zero Based Budgeting can be used to cut overheads
• Redundancies/Staff Reductions - Possible weak HR function & Combined Code link, mention IAS 19 termination benefits & that company is entitled to receive tax rebate
• Any Strategic decision e.g acquisition, Re-organisation, new IT system - mention change management & the effect on company overall strategy
• PLC's - Mention IFRS 8, IAS 33 & IAS 39
• Locust Coffee
• Preparing budgets/forecasts - Include/discuss risk management techniques in your workings if possible (sensitivity analysis, scenario analysis, probability analysis)
• Applying for finance - Prepare business plan with forecasts/projections
• Acquiring/Selling company - Valuation method, tax issues, due dilligence, synergies to be achieved, IFRS 1, IFRS 3, IAS 27, change management, sources of finance
• Doing Non Audit services - Bring to attention of audit committee and link to Combined Code
• Foreign Exchange - Mention IAS 21, ways to manage fx risk, link risk management to Combined Code
• Change in Staff Levels - It might have an effect on any grant conditions company may have IAS 20

Just printed this off thanks a mil for putting it up. I am so slow when it comes to all this stuff. If I pass these exams by some small miracle it will be thanks to everyone's help on here.

If I come across anything else that links together I'll pop it up.

Siobhang4

management buyout - finance - tax relief - change management -

Source of finance - bank favours good corp gov.

An Citeog

supernova84 wrote: »

supernova84 wrote: »

Just some random things I've come across in the cases that could be linked together when answering a specific indicator. If anybody has other suggestions please add.

• Seeking a listing - Ensure good CG structure in place
• If error in this year a/c's - Possible error occured p/y aswell, mention IAS 8
• Holding high levels of Inventory - Mention ways to reduce/control (EOQ, MRP, JIT, ABC)
• Cost reduction - Zero Based Budgeting can be used to cut overheads
• Redundancies/Staff Reductions - Possible weak HR function & Combined Code link, mention IAS 19 termination benefits & that company is entitled to receive tax rebate
• Any Strategic decision e.g acquisition, Re-organisation, new IT system - mention change management & the effect on company overall strategy
• PLC's - Mention IFRS 8, IAS 33 & IAS 39
• Locust Coffee
• Preparing budgets/forecasts - Include/discuss risk management techniques in your workings if possible (sensitivity analysis, scenario analysis, probability analysis)
• Applying for finance - Prepare business plan with forecasts/projections
• Acquiring/Selling company - Valuation method, tax issues, due dilligence, synergies to be achieved, IFRS 1, IFRS 3, IAS 27, change management, sources of finance
• Doing Non Audit services - Bring to attention of audit committee and link to Combined Code
• Foreign Exchange - Mention IAS 21, ways to manage fx risk, link risk management to Combined Code
• Change in Staff Levels - It might have an effect on any grant conditions company may have IAS 20

Anymore ideas from people? Things they've come across in the cases that can be linked up to other area?

Just a little thing but it's the UK Corporate Governance Code rather than the Combined Code that you should be referring to.

Excellent post though.

ManwitaPlan

ferike1 wrote: »

• Applying for finance - consider the aspects cost, risk, adequacy, availability and alternatives. State effect on balance sheet. Might link to PM, if shares are offered (EPS)

• Watch out for dominant individuals - linked to both BL (over-reliance on key individual) and Audit (audit risk of dominant individual). This also stands for over-reliance on a single client or geographic area.

• When disposing a sub/closing a branch - consider both tax implications (participation exemption); termination payments (tax;PM and BL/HR standpoint) and also Onerous contracts (this I felt was important to mention as future losses can't be provisioned for except for onerous contracts that must be fulfilled). As well as of course the financial reporting implications of disposing/selling under IFRS 3, IAS 27 and if IFRS 5 is applicable

• Always be aware if you are dealing with a PLC or Ltd company and if you are being asked to FR adjustments to the group or single company

• Also consider IAS 24 when talking about acquiring a company or if there is a sub.
• Just something I thought of. If there is R&D and potential IAS 38 stuff, can potentially be linked to R&D tax credit
• Marketing and IMS seem to be linked - e-business
• Identify what matters are required by law (e.g disclosure of directors salaries, 10% of NA loans) and what is just good CG

Hey ferike1, have you passed FAE or are you sitting it?(or are you a teaching professional of some kind?)

You give some useful responses here but you speak with a certain level of authority and just wanted to check that your not in the same boat as the rest of us before I take the posts as gospel.

Chalk_Farm

An Citeog wrote: »

Just a little thing but it's the UK Corporate Governance Code rather than the Combined Code that you should be referring to.

Excellent post though.

V Good post Ferike..more would be great!!

Just checking, I have seen the "Combined Code" bandied about here and there - what is this..has the "UK Code of..." superseded the Combined Code?

An Citeog

Chalk_Farm wrote: »

An Citeog wrote: »

Just a little thing but it's the UK Corporate Governance Code rather than the Combined Code that you should be referring to.

Excellent post though.

V Good post Ferike..more would be great!!

Just checking, I have seen the "Combined Code" bandied about here and there - what is this..has the "UK Code of..." superseded the Combined Code?

Yes, from the institute's site:

Following a review and consultation by the Financial Reporting Council (FRC) the UK Corporate Governance Code updates and replaces the 2008 edition of the Combined Code.  The Combined Code was first publised in 1999 and it brought together and updated earlier reports on corporate governance matters including the Cadbury Report "The Financial Aspects of Corporate Governance (1992)" and the Greenbury Report in 1995 on remuneration of directors. The Combined Code was updated in 2006 and again in 2008. Other influential reports on corporate governance in the UK include Rutteman Report 1994, Hampel Report 1998, Myners Report 2001, Tyson Report 2003.

ferike1

ManwitaPlan wrote: »

Hey ferike1, have you passed FAE or are you sitting it?(or are you a teaching professional of some kind?)

You give some useful responses here but you speak with a certain level of authority and just wanted to check that your not in the same boat as the rest of us before I take the posts as gospel.

Haha, I wish man. Nah, I am in the same boat as the rest of you guys, I am just stating the stuff I have found doing the many many many cases combined with my own thoughts. None of this means I will pass

I'd be worried if you were taking advice from an internet stranger as gospel regardless of who they say they are! Where is your professional skepticism :D?

DTOWN

Hi,

Hope everyone is staying sane!!

I'm currently looking at the David Dogood question and am a little bit stumped with the calculation of the sales price in appendix 1.

Any help would be gratefully appreciated!

Thanks

Jame Gumb

I deleted my related parties query...it was moronic

FAE_UCH

Siobhang4 wrote: »

management buyout - finance - tax relief - change management -

Source of finance - bank favours good corp gov.

What Tax relief is there for Management Buy Outs?

I was looking at the differet types of Scenarios can anyone think of anymore?
My list includes

• Buying a Business
• Selling a Business
• Going for an IPO
• Co. in financial difficulty
• Going into new Market/Products
• Audit Client

levi

FAE_UCH wrote: »

Siobhang4 wrote: »

management buyout - finance - tax relief - change management -

Source of finance - bank favours good corp gov.

What Tax relief is there for Management Buy Outs?

I was looking at the differet types of Scenarios can anyone think of anymore?
My list includes

• Buying a Business
• Selling a Business
• Going for an IPO
• Co. in financial difficulty
• Going into new Market/Products
• Audit Client

Is it interest as a charge relief but isnt really available anymore...

MPBC123

http://www.accountancyireland.ie/Documents/digital/2011/April/index.html

PAGES 80-82

may be of some use

okdune

I just got into another muddle about interest rate swaps.

Just a quick recommendation - I remember someone a few days back had a query re valuations - worth having a google for the Khan Academy online - he simplifies a lot of the tedious stuff. Well he cleared up swaps for me.

Siobhang4

FAE_UCH wrote: »

What Tax relief is there for Management Buy Outs?

I was looking at the differet types of Scenarios can anyone think of anymore?

My list includes

• Buying a Business
• Selling a Business
• Going for an IPO
• Co. in financial difficulty
• Going into new Market/Products
• Audit Client

Tax issue for Management buyout - Company buyback of shares for the benefit of the company ie shareholder retiring to make way for new management..

faer2203

Siobhang4 wrote: »

Tax issue for Management buyout - Company buyback of shares for the benefit of the company ie shareholder retiring to make way for new management..

Hey, quick question on that so I get my head round it
In a mgmt buyout the company buys back the shares first (so the shareholder that selling shares can be liable to gains @ 25% instead of 52% if that relief is claimed). => Shareholder gone
So the company now owns the shares and the mgmt buy them then, the mgmt could have got interest as a relief but thats gone now, so theres no main relief mgmt can obtain for the buying of the shares.

Just if anyone could correct me on the understanding! Cheers!!

upnorthchick

anybody ready for the drink?? seriously have did nothing today.... think ill stay part qualified....

Moorstown

upnorthchick wrote: »

anybody ready for the drink?? seriously have did nothing today.... think ill stay part qualified....

Hang in there, were nearly there. Not much point fretting about it too much now. All we can do is stay going and remain focused on our plan. Just think of something positive that you are going to do after the exams to keep you motivated.

Siobhang4

faer2203 wrote: »

Hey, quick question on that so I get my head round it
In a mgmt buyout the company buys back the shares first (so the shareholder that selling shares can be liable to gains @ 25% instead of 52% if that relief is claimed). => Shareholder gone
So the company now owns the shares and the mgmt buy them then, the mgmt could have got interest as a relief but thats gone now, so theres no main relief mgmt can obtain for the buying of the shares.

Just if anyone could correct me on the understanding! Cheers!!

If shareholder want make way for management or retire.
Management can't afford to buy out the major sharholder. assume 2 members of management with nominal holding eg 5% each
Company can buy back shares 90% (reduce the share capital by the amount of the shares bought back therefore management do not need to buy these share of company) sharholder could maintain small holding for sentimental reasons.
2 shareholder will now own 50% each if full buyback.

Shareholder subject to CGT at 25% on company buyback for the benefit of the trade as opposed IT 52% on dividend payout

relief can be combined with retirement relief if circumstances apply over 55 etc. tax free gain on amount of up to 750,000

7upfree

upnorthchick wrote: »

anybody ready for the drink?? seriously have did nothing today.... think ill stay part qualified....

I think I'm in the same boat. I decided a drink is in order tonight. Mainly because I have to go to a table quiz but a drink might help calm me :-D

Siobhang4

7upfree wrote: »

I think I'm in the same boat. I decided a drink is in order tonight. Mainly because I have to go to a table quiz but a drink might help calm me :-D

I didn't get a wink of sleep last nite... can hardly function today..:(

7upfree

Siobhang4 wrote: »

7upfree wrote: »

I think I'm in the same boat. I decided a drink is in order tonight. Mainly because I have to go to a table quiz but a drink might help calm me :-D

I didn't get a wink of sleep last nite... can hardly function today..:(

I know that feeling I'm finding my back is at me the last couple of days just can't get comfortable no matter what way I sit. A drink tonight may do the world of good and get some sleep :-)

Even though I'm not near enough prepared id gladly sit the exams next week just to get them done with.

Siobhang4

7upfree wrote: »

I know that feeling I'm finding my back is at me the last couple of days just can't get comfortable no matter what way I sit. A drink tonight may do the world of good and get some sleep :-)

Even though I'm not near enough prepared id gladly sit the exams next week just to get them done with.

i'd do anything for an extra month :rolleyes:...

7upfree

Siobhang4 wrote: »

7upfree wrote: »

I know that feeling I'm finding my back is at me the last couple of days just can't get comfortable no matter what way I sit. A drink tonight may do the world of good and get some sleep :-)

Even though I'm not near enough prepared id gladly sit the exams next week just to get them done with.

i'd do anything for an extra month :rolleyes:...

I don't think I could hack another month of this and I don't think the other half could put up with me like this for another month :-D

Atleast I know I'm not the only one starting to panic

faer2203

Siobhang4 wrote: »

If shareholder want make way for management or retire.
Management can't afford to buy out the major sharholder. assume 2 members of management with nominal holding eg 5% each
Company can buy back shares 90% (reduce the share capital by the amount of the shares bought back therefore management do not need to buy these share of company) sharholder could maintain small holding for sentimental reasons.
2 shareholder will now own 50% each if full buyback.

Shareholder subject to CGT at 25% on company buyback for the benefit of the trade as opposed IT 52% on dividend payout

relief can be combined with retirement relief if circumstances apply over 55 etc. tax free gain on amount of up to 750,000

Thanks a mil Siobhan, appreciate it, another quick question, are the mgmt or the company itself liable to tax on anything as they went from 5% to 50%? Thanks again!!

figrolls

I know this is probably a stupid question, but....

You know the way in a lot of case studies they say that X ltd runs retail operations in republic of ireland and nothern ireland - should this be an indicator for FX risk, as none of them seem to address it as such...

faer2203

figrolls wrote: »

I know this is probably a stupid question, but....

You know the way in a lot of case studies they say that X ltd runs retail operations in republic of ireland and nothern ireland - should this be an indicator for FX risk, as none of them seem to address it as such...

Yeah I always think the same think, and writing FX on the paper if i see buying/selling in another company, but no harm throwing it in somewhere, could throw it into audit risks if it comes up, mightny be seen as significant risk but cant mark ya down for putting it in!!

louise1985

Hi,
I'm wondering if someone can help, Im trying to locate the tax elective mock 2010 papers, the one I have printed has only sims 1 and 2 and I'm unsure if I omitted to print the whole document or not.

Thanks in advance

ferike1

Still prefer this to work.

The thought of it makes me shudder.

ucd.1985

louise1985 wrote: »

Hi,
I'm wondering if someone can help, Im trying to locate the tax elective mock 2010 papers, the one I have printed has only sims 1 and 2 and I'm unsure if I omitted to print the whole document or not.

Thanks in advance

Theres only 1 and 2 on the website as apparently stuff on sim 3 is no loner examinable.