FAE Audit Elective 2014

kenner24

Can anyone shed a little light on the reporting to third parties? I can never pick the right report does anyone have a useful mind map on how to arrive at the right report???

mark_m360

Chris Partlow wrote: »

What are people's thoughts on the 3 new cases this year? Saved Ballyvaughen til now. Tried it early and I dunno is it me or what but the solution seems all over the place! Very vague and the solution seems to make reference to comments that arent in the case...

Also, the solution completely ignored the part in the question regarding the board member in Tipp Credit Union.

Yeah found it strange that they left that part out but I suppose it is included in the audit risks. I would of thought that the rationale used would be the tipp board member though.

Yeah it doesn't seem as detailed an answer as some. What are the other 2 case studies you refer to?

Soap_Soup

Autumn 2010 - Daniel Stores

In my answer I thought one of the key points was that under ES5 doing the non audit work could be perceived as an advocacy (or management) threat. However they could make use of the PASE as long as they disclose the non audit work performed in the auditors report.

The institute's solution doesn't mention any of this. I.e there seems to be no issue in doing the non audit work at all. Can anyone help me understand why I'm wrong?

Chris Partlow

mark_m360 wrote: »

Yeah found it strange that they left that part out but I suppose it is included in the audit risks. I would of thought that the rationale used would be the tipp board member though.

Yeah it doesn't seem as detailed an answer as some. What are the other 2 case studies you refer to?

Ace Physio and Rowland Financial Services. Thought they were better.

They mention RPTs vaguely alright but not sign of them applying it back to the case... which was what the FAE and elective is supposed to be all about!

Chris Partlow

Soap_Soup wrote: »

Autumn 2010 - Daniel Stores

In my answer I thought one of the key points was that under ES5 doing the non audit work could be perceived as an advocacy (or management) threat. However they could make use of the PASE as long as they disclose the non audit work performed in the auditors report.

The institute's solution doesn't mention any of this. I.e there seems to be no issue in doing the non audit work at all. Can anyone help me understand why I'm wrong?

I dont think you're wrong. If solution to 2012 Happy Holidays AUP question is you're correct. I think because this what an older case and ES 5 had been revised since that's possibly why it wasn't included in the solution for 2010.

womandriver

Chris Partlow wrote: »

I don't think you're wrong. If solution to 2012 Happy Holidays AUP question is you're correct. I think because this what an older case and ES 5 had been revised since that's possibly why it wasn't included in the solution for 2010.

You're not taking on a management role though, you're doing a separate report on factual findings, it's not an opinion or advocating anything, it's just facts so there's no risk of mgt role or advocacy. Therefore there's no need to apply the ES PASE exemption because there's no risk in first place.


I have the solution updated for 2013/2014 and it also makes no specific reference to ES 5.

The solution to Happy Holidays specifically points out that advocacy and management threats don't arise in AUP situations.

Soap_Soup

I would have thought if you're carrying out non audit services for an audit client you would have to reference ES5 in someway.

So - would this mean if asked to carry out agreed upon procedures for an audit client, there are no considerations under the Ethical Standards?

Sorry I'm trying to scrape my audit knowledge together today, going through notes etc.

Soap_Soup

Just seen your point about Happy Holidays - ill look that up. Thanks!

womandriver

Soap_Soup wrote: »

I would have thought if you're carrying out non audit services for an audit client you would have to reference ES5 in someway.

So - would this mean if asked to carry out agreed upon procedures for an audit client, there are no considerations under the Ethical Standards?

Sorry I'm trying to scrape my audit knowledge together today, going through notes etc.

There is consideration of the ethical standards including ES 5 but you point out whether there's a risk or not.

No management risk arises with AUP as it's just a report of facts, so you can't apply ES PASE as it deals with a non-existent risk in this case.

womandriver

Soap_Soup wrote: »

I would have thought if you're carrying out non audit services for an audit client you would have to reference ES5 in someway.

So - would this mean if asked to carry out agreed upon procedures for an audit client, there are no considerations under the Ethical Standards?

Sorry I'm trying to scrape my audit knowledge together today, going through notes etc.

There's no risk of mgt role due to nature of AUP report, there's still the other ES 1-4 to consider. Sorry if I'm repeating this point but I want to make sure you haven't misunderstood the point I was making.

AUP has come up twice already too so one of the other reports are prob more likely, which is unfortunate as AUP is probably most straightforward

Chris Partlow

womandriver wrote: »

There's no risk of mgt role due to nature of AUP report, there's still the other ES 1-4 to consider. Sorry if I'm repeating this point but I want to make sure you haven't misunderstood the point I was making.

AUP has come up twice already too so one of the other reports are prob more likely, which is unfortunate as AUP is probably most straightforward

Hey, so AUP has come up in 2010, 2011, 2012. Only in 2012 was ES 5 mentioned as something which should be considered before accepting an AUP Non Audit Engagement.

In 2010, ES 1 was referenced saying we should consider our independence (as a one liner).
In 2011, no references to ES' as it is not an audit client of ours.
In 2012, ES 5 is an indicator on it's own.

I'm inclined to think that ES 5 should have been mentioned in the solution to 2010 as Soap suggests. Specifically mentioning the "reasonable and informed 3rd party" test prior to accepting.

womandriver

Chris Partlow wrote: »

Hey, so AUP has come up in 2010, 2011, 2012. Only in 2012 was ES 5 mentioned as something which should be considered before accepting an AUP Non Audit Engagement.

In 2010, ES 1 was referenced saying we should consider our independence (as a one liner).
In 2011, no references to ES' as it is not an audit client of ours.
In 2012, ES 5 is an indicator on it's own.

I'm inclined to think that ES 5 should have been mentioned in the solution to 2010 as Soap suggests. Specifically mentioning the "reasonable and informed 3rd party" test prior to accepting.

Yes, absolutely mention ES5. Just don't mention ES PASE in relation to ES 5 unless you're saying it doesn't apply (which is what the original query was in relation to).

You can see from the suggested solutions that the answers vary, some include more, some include less. Cover your ass by putting in everything but make sure what you're saying isn't incorrect (eg. applying the ES PASE to AUP). If you said you were taking advantage of the ES PASE in the 2010 case as Soap suggested, you would be straight up wrong.

Complete reliance on past papers is dangerous without having a good grasp of the actual area it relates to cos as you can see from your post, the answers vary from paper to paper. Also you won't be able to spot changes in the standards from looking at old solutions.

Also, 2011 makes perfect sense, if we're not the auditor then why would we be concerned with the ethical standards?

EDudder

I'm resitting the audit elective, so the version of the APB book I have is 2011.

Does anyone know a way to find out which standards etc. I'd need to print out seperately as they've been updated?

I've been using the text book but I know there will be some standards updated.

Thanks for any help

womandriver

EDudder wrote: »

I'm resitting the audit elective, so the version of the APB book I have is 2011.

Does anyone know a way to find out which standards etc. I'd need to print out seperately as they've been updated?

I've been using the text book but I know there will be some standards updated.

Thanks for any help

Print off the addendum to the current year competency statement on the chartered website, it lists which version of standard is examinable. Compare it to what's in your book. Anything you don't have up to date, print off from chariot.

EDudder

womandriver wrote: »

Print off the addendum to the current year competency statement on the chartered website, it lists which version of standard is examinable. Compare it to what's in your book. Anything you don't have up to date, print off from chariot.

That's great thanks very much!!

I haven't had much time off for my repeat unfortunately. Only really getting into it now. Still staying positive and think I'll be ok (hopefully not being delusional there).

What do people think are the key areas to focus on? My approach at the minute is working through the textbook with past papers but I'm trying to remember the areas I should be giving more time to.

womandriver

EDudder wrote: »

That's great thanks very much!!

I haven't had much time off for my repeat unfortunately. Only really getting into it now. Still staying positive and think I'll be ok (hopefully not being delusional there).

What do people think are the key areas to focus on? My approach at the minute is working through the textbook with past papers but I'm trying to remember the areas I should be giving more time to.

I've no idea of what's likely tbh, I know ISA 600 was tipped last year as being likely but didn't appear but it's examinable at core too this year so they won't examine it at both you'd imagine.

Reports to 3rd parties/other reports didn't appear last year but Sean Murray said that was unusual and would expect to see one of them this year, so make sure u cover those.

LOccitane

womandriver wrote: »

I've no idea of what's likely tbh, I know ISA 600 was tipped last year as being likely but didn't appear but it's examinable at core too this year so they won't examine it at both you'd imagine.

Reports to 3rd parties/other reports didn't appear last year but Sean Murray said that was unusual and would expect to see one of them this year, so make sure u cover those.

Great points there WomanDriver.

I would note also; there is a significant part of the AAE Competency Statement in terms of Corporate Governance not yet examined. The Auditors' Review of the Corporate Governance Statement is examinable at the ''I'' level together with the related APB Standards... I'd be expecting at least part of a SIM to hit on this later next week.... Just my 2C..

womandriver

LOccitane wrote: »

Great points there WomanDriver.

I would note also; there is a significant part of the AAE Competency Statement in terms of Corporate Governance not yet examined. The Auditors' Review of the Corporate Governance Statement is examinable at the ''I'' level together with the related APB Standards... I'd be expecting at least part of a SIM to hit on this later next week.... Just my 2C..

God I hope if CG does come up it'll be straightforward. That area is kind of intimidating to me and there's not much in the past papers to draw from in relation to it.

womandriver

LOccitane wrote: »

Great points there WomanDriver.

I would note also; there is a significant part of the AAE Competency Statement in terms of Corporate Governance not yet examined. The Auditors' Review of the Corporate Governance Statement is examinable at the ''I'' level together with the related APB Standards... I'd be expecting at least part of a SIM to hit on this later next week.... Just my 2C..

Is there any chance you have the core CG notes? Would really like to have a look over them but don't have any access to them. Could you please post them if you can? Thanks a mill. Sean murray's notes that is, not BL.

LOccitane

womandriver wrote: »

Is there any chance you have the core CG notes? Would really like to have a look over them but don't have any access to them. Could you please post them if you can? Thanks a mill. Sean murray's notes that is, not BL.

Hi WomanDriver,

Unfortunately not :-/ - I just checked the CAI Portal however they seem to have been removed from the CORE section? I'm going purely off the AAE notes in terms of CG.

All the best,

LOccitane

womandriver

LOccitane wrote: »

Hi WomanDriver,

Unfortunately not :-/ - I just checked the CAI Portal however they seem to have been removed from the CORE section? I'm going purely off the AAE notes in terms of CG.

All the best,

LOccitane

That's grand, thanks a mill for checking.

Best of luck for the final week.

LOccitane

womandriver wrote: »

That's grand, thanks a mill for checking.

Best of luck for the final week.

No problem at all! Anything else - just let us know. Best of luck to you too! :-)

Soap_Soup

So, who's all repeating??

How have you been approaching it, and how are you feeling so far?

I've been mainly using the text book and past papers to get an overall understanding. Think there were too many areas I hadn't covered last year as I concentrated 95% on the core (using the textbook as Sean Murray's notes are useless in my opinion - I know that divides people, but they just don't work for me).

I think I'm definitely in a better position than last year (and I was close to passing) but I still don't feel confident. There's the horrible feeling that if a Q with something you hadn't thought much about came up (say Money Laundering), and then a separate Q with an awkward audit section came up, I might freak out. I really think the question about the software companies revenue section ruined me last year- And if I'm honest, if it came up this year I probably wouldn't fare much better.

womandriver

Soap_Soup wrote: »

So, who's all repeating??

How have you been approaching it, and how are you feeling so far?

I've been mainly using the text book and past papers to get an overall understanding. Think there were too many areas I hadn't covered last year as I concentrated 95% on the core (using the textbook as Sean Murray's notes are useless in my opinion - I know that divides people, but they just don't work for me).

I think I'm definitely in a better position than last year (and I was close to passing) but I still don't feel confident. There's the horrible feeling that if a Q with something you hadn't thought much about came up (say Money Laundering), and then a separate Q with an awkward audit section came up, I might freak out. I really think the question about the software companies revenue section ruined me last year- And if I'm honest, if it came up this year I probably wouldn't fare much better.

Have to say I feel very similar. I feel better prepared this year, wasn't a million miles away last year and passed this years mock but I'm still not confident.

If an awkward internal control area came up coupled with reviewing a junior's working paper (which I seem to be useless at) and maybe corporate governance, I could very well be in serious trouble.

Currently re watching the lectures on reports to 3rd parties cos I ain't too hot on those either.

Guess just have to be positive, I wasn't far away last year and was a lot less prepared for it.

I'm actually kinda concerned about the updated accounting standards, have you looked at those? I'm only doing elective so have old versions etc. not sure if it's worth printing the new ones.

Soap_Soup

No, haven't looked at that. Was planning on checking which ISA's I need to update tomorrow actually, but hadn't even thought of accounting standards. Is there a list of updated accounting standards? Has anything significant changed? God I would hope not.

I'm definitely trying to take the view of 'I wasn't far off last year and I've prepared more this year' as well. I do think if it was to go wrong I'll have been very unlucky. And to be honest I don't think I'd even be worried if it wasn't for the fact that they only hold the exam once a year. More of an inconvenience than anything else.

womandriver

Soap_Soup wrote: »

No, haven't looked at that. Was planning on checking which ISA's I need to update tomorrow actually, but hadn't even thought of accounting standards. Is there a list of updated accounting standards? Has anything significant changed? God I would hope not.

I'm definitely trying to take the view of 'I wasn't far off last year and I've prepared more this year' as well. I do think if it was to go wrong I'll have been very unlucky. And to be honest I don't think I'd even be worried if it wasn't for the fact that they only hold the exam once a year. More of an inconvenience than anything else.

On the addendum to the competency statement there appears to be a number of updated IAS and IFRS but I have no idea what's changed in the standards as have the old versions and haven't looked at the new ones. It does slightly concern me tho.

womandriver

Sterling Crooked Compass wrote: »

Does anyone have the Rowland Financial Services solution? I'm registered for the revision course and the course material thread just has the case study posted up twice. Thanks!

Chris Partlow

womandriver wrote: »

Have to say I feel very similar. I feel better prepared this year, wasn't a million miles away last year and passed this years mock but I'm still not confident.

If an awkward internal control area came up coupled with reviewing a junior's working paper (which I seem to be useless at) and maybe corporate governance, I could very well be in serious trouble.

Currently re watching the lectures on reports to 3rd parties cos I ain't too hot on those either.

Guess just have to be positive, I wasn't far away last year and was a lot less prepared for it.

I'm actually kinda concerned about the updated accounting standards, have you looked at those? I'm only doing elective so have old versions etc. not sure if it's worth printing the new ones.

At least if any of those sections come up you can bet almost everyone will struggle. The board reports highlight 'risk responses' as an area students fall down on every year. And any 3rd party reporting Q that isn't AUP will throw loads of people too. Just keep cool and you'll be fine.

There definitely will be something that throws everyone. Just have to step back, take a proper look and try to come to some logical conclusion that you can back up... and if you can't do that, answer the indicators that you can and leave that indicator til the end! That's my 2 cents anyway.

Everyone keeps saying to take the Wednesday off and not to look at any books... I'm not sure I'll be able to do that.

Cant wait to just have it done now... It's been like a cloud hanging over me the entire year.

EDudder

Got a bit annoyed reading last years mark scheme/ board report. Sim 1s answer is a ridiculously long list of mostly general items that aren't specific to the case. They're forever telling us not to do that (which makes sense). But if you didn't do it for that question you wouldn't have scored well. A bit of consistency please!

Chris Partlow

EDudder wrote: »

Got a bit annoyed reading last years mark scheme/ board report. Sim 1s answer is a ridiculously long list of mostly general items that aren't specific to the case. They're forever telling us not to do that (which makes sense). But if you didn't do it for that question you wouldn't have scored well. A bit of consistency please!

I know what you mean, it completely goes against the main message they've been driving home!

Soap_Soup

Do we need to have those ODCE decision notices printed?

I'm only seeing them now if I'm honest and I didn't seem to see them on the competency statement or the addendum.

womandriver

How are people approaching planing and time Thursday? Read and plan all 3 and then start writing or read, plan and answer one by one.

I'm a bit conflicted, I know when I read all 3 together that I have to read 2 and 3 again anyway as I've forgotten them by time I get to them. But if don't read all 3 first won't know what's ahead and which to do first.

I've printed those decision notice things but I've no idea what they're for, they don't appear to be examinable from the competency statement.

Chris Partlow

womandriver wrote: »

How are people approaching planing and time Thursday? Read and plan all 3 and then start writing or read, plan and answer one by one.

I'm a bit conflicted, I know when I read all 3 together that I have to read 2 and 3 again anyway as I've forgotten them by time I get to them. But if don't read all 3 first won't know what's ahead and which to do first.

I've printed those decision notice things but I've no idea what they're for, they don't appear to be examinable from the competency statement.

I like to plan one by one. That's just me though. I'd only get distracted otherwise

Soap_Soup

Think I'll read all three to start with and note down the indicators as I go.

Then do a proper plan when I go back and re-read them.

I can't believe I'm asking this- but how many indicators should there be across the whole paper? Last year I think I had lecture slides that outlined this but I can't seem to find them.

Those ODCE documents don't seem to be on the competency statement or addendum and they also only apply to ROI (with the equivalent NI version of whatever it is not uploaded).

Does anyone know where there's any decent notes on NI companies act requirements (or notes that apply to both)? That's the kind of thing that I don't seem to have anything on and wouldn't really know how to address if it came up.

womandriver

Soap_Soup wrote: »

Think I'll read all three to start with and note down the indicators as I go.

Then do a proper plan when I go back and re-read them.

I can't believe I'm asking this- but how many indicators should there be across the whole paper? Last year I think I had lecture slides that outlined this but I can't seem to find them.

Those ODCE documents don't seem to be on the competency statement or addendum and they also only apply to ROI (with the equivalent NI version of whatever it is not uploaded).

Does anyone know where there's any decent notes on NI companies act requirements (or notes that apply to both)? That's the kind of thing that I don't seem to have anything on and wouldn't really know how to address if it came up.

I think Sean Murray said max 10 indicators in total, which sounds about right I guess, assuming 2 sims of 3 indicators and one of 4.

Sorry can't help on the NI material as doing ROI.

Chris Partlow

Best of luck tomorrow guys. I'm sure the hard work will pay off. Dunno about ye but I won't be coming back on here tomorrow for a post mortem!

Also, yeah Sean Murray mentioned 10 indicators alright. They seem to like 4-3-3. Although there were 9 in 2012 so dont panic if you can't find 10.

I'm not worrying about ODCE. Judging from solutions that kind of stuff is usually only a one liner... and usually for Highly Competent. Competent will do me just fine!

womandriver

Chris Partlow wrote: »

Best of luck tomorrow guys. I'm sure the hard work will pay off. Dunno about ye but I won't be coming back on here tomorrow for a post mortem!

Also, yeah Sean Murray mentioned 10 indicators alright. They seem to like 4-3-3. Although there were 9 in 2012 so dont panic if you can't find 10.

I'm not worrying about ODCE. Judging from solutions that kind of stuff is usually only a one liner... and usually for Highly Competent. Competent will do me just fine!

Best of luck to all, looking forward to it all being over and having my life back.

EDudder

Whatever way it goes, I'm complaining about the course 'material' again.

That online lecture on Corp Governance. You'd need a background in Law to follow him jumping around from APB bulletin 2006 reference whatever to APB 2005 reference 5 to the slides to the corporate gov code to a PWC printout to ISA 720.

The requirements could probably be summarised in one or two A4 pages.

lee711

EDudder wrote: »

Whatever way it goes, I'm complaining about the course 'material' again.

That online lecture on Corp Governance. You'd need a background in Law to follow him jumping around from APB bulletin 2006 reference whatever to APB 2005 reference 5 to the slides to the corporate gov code to a PWC printout to ISA 720.

The requirements could probably be summarised in one or two A4 pages.

So you wouldnt recommend watching the corporate governance lecture? I was going to give it a look there but wont if its no use?

LOccitane

lee711 wrote: »

So you wouldnt recommend watching the corporate governance lecture? I was going to give it a look there but wont if its no use?

Cover it in case it comes up I reckon. It's examinable at the 'I' level..

EDudder

Yeah.

I personally found the slides a bit more helpful than the way he covered it in the lecture. But different people might disagree. It's more about getting a general idea so incase it comes up you can reference your material. That's the idea he seemed to be putting across anyway (or that's how I picked it up).

For the last ten minutes he talks about the directors remuneration report and then says he doesn't really think it's examinable (i.e. not on competency statement) and he would argue with the examiner if it came up. I just find things like that a bit unhelpful. Although I'm sure he meant well.

EDudder

That online lecture 4 - how did people find that?

I've covered Other Assurance reports in the textbook so I'm tempted to just go over the notes. But if people found it helpful I have a few hours tonight so I could watch it.

LOccitane

Well that Paper took any enthusiasm I had left for Audit from me...

At least half of the indicators were so open ended... The volume of information in the Appendices...

What an end to an awful week. Hope it went well for others..

The gulf between that Paper and anything in the past I felt was unfair. 'Business Risks' in Question 1.. These were clearly ultimately Audit Risks in most cases.

But finally we are done! :-)

sineadio

Does anyone know the pass rate for 2013? Question 2 nearly killed me

Chris Partlow

Its usually around the 70% mark. 2011 was 59% but that seems to have been a once off.

Also thought Case 2 was horrendous. Information overload!

cian twomey

thought that SIM 3 was ok, SIM tough but 2 of the indicators were manageable SIM 1 very tough and was running out of time so left it till last, touch and go

LOccitane

sineadio wrote: »

Does anyone know the pass rate for 2013? Question 2 nearly killed me

It was insane. I was very confident going in to that paper but it was bad. To be honest I didn't even know what I was saying for some of Sim 2.

Ran with pervasive limitation of scope re going concern and consolidation of subsidiary if we were to sign the audit opinion now. But I don't know really and don't care anymore.

Gonna go from Decile 1 in the Mock to a Fail..! What a joke...

Enjoy folks anyway, we are done for now at least :-)

womandriver

That was shocking. AWFUL. So disappointed. Passed the mock with decile 1, not a hope of passing that.

mark_m360

That was a fairly heavy and open ended paper. Structure and writing was a bit messy as I felt the time pressure. Hopefully did enough to get over the line but you never know with audit.

From anyone I have spoken to, we have all different opinions so if you made some sort of logical conclusions, I'm sure they'll take them on board. Can't fail us all can they?!

Soap_Soup

Completely gutted.

Put my life on hold for a year for that exam. You can only reasonably prepare based on the level of past papers (I sat one of them for Christ sake), and that was a different level.

Read through and couldn't be sure of what the indicators even were or what they were getting at. That mixed with awkward topics coming up (the ones I at least recognised) and I completely panicked. Ruined myself for time and that was it.

'with no further audit work what would the audit opinion be'? Well considering I haven't a clue of how much works been performed to date, how the **** would I know. Stupid indicator. I assumed they were just taking going concern into account for that one.