FAE Advanced Audit elective

ShellyQ123

Hi, Just wondering if anyone has a copy of last years "Steps" cases?
Thanks in advance :-D

20 Times 20 Times

Anyone want to tell me why Ethical standard 5 is not mentioned in Display craft solution - as we are offering advice on financial reporting to the client ??

IR1SH RANG3R

Anyone have any good notes which summarise the standards? Heard a couple of CAP 2 revision day notes are good but I don't have access to any notes?

Dellboy2007

20 Times 20 Times wrote: »

Anyone want to tell me why Ethical standard 5 is not mentioned in Display craft solution - as we are offering advice on financial reporting to the client ??

Do you mean ethical standard 1 in relation to a possible self-review threat regarding the client asking for advice on whether or not to capitalise costs associated with the industrial premises purchase?

I took the view that the client has already told you how they have accounted for them. We are not taking a management decision, the client has implemented the incorrect treatment and we must now correct them.

20 Times 20 Times

Dellboy2007 wrote: »

Do you mean ethical standard 1 in relation to a possible self-review threat regarding the client asking for advice on whether or not to capitalise costs associated with the industrial premises purchase?

I took the view that the client has already told you how they have accounted for them. We are not taking a management decision, the client has implemented the incorrect treatment and we must now correct them.

Sorry I meant ES1 - threats to our independence i.e management and self review.

What you think?

Dellboy2007

20 Times 20 Times wrote: »

Sorry I meant ES1 - threats to our independence i.e management and self review.

What you think?

As per above, I think it's slightly different in this case as the client has already accounted for it. They have expensed when they should have capitalised. If they had came to you prior to doing anything and said, what should we do, Then you would breach ES1. As it stands the client is currently not accounting for it correctly and unless you tell them otherwise the premises are going to be materially misstated.

Dellboy2007

Does anyone know what the main update to ISA 610 is?

AuditAgain

Not too sure. The back of the revised ISA 610 shows where references to ISA 610 in other ISAs have been updated though. The main one appears to be a new update that "The engagement team excludes individuals in the entities internal audit function who provide direct assistance...".

My understanding is that this isn't relavent to us as direct assistance isn't allowed in the UK and Ireland.

If anyone else knows of anything else, let us know!

QueenV

Hi guys,

How are people studying for this ?I have kinda neglected the elective due to the monster that is Core! Two weeks to go and not sure where to start?

Any ideas will be greatly appreciated.

Dellboy2007

Don't have my FR notes on me but can't work out why they didn't mention in the Pybex case the possibility of the joint venture being reclassified as a discontinued operation. Anyone any thoughts?

AuditAgain

I'll have to have a look at it tomorrow.

It'd be unusual for a complex(ish) FR issue like that to come up in the elective though would it not? That'd be a disaster.

Speak of ... Anyone just doing the elective -.what kind of FR prep are you doing?

And are the new FRS101/102 relevant to the audit elective? Or just core? (I'm only sitting elective).

If so - do any core people have summary notes on that??

Dellboy2007

AuditAgain wrote: »

I'll have to have a look at it tomorrow.

It'd be unusual for a complex(ish) FR issue like that to come up in the elective though would it not? That'd be a disaster.

Speak of ... Anyone just doing the elective -.what kind of FR prep are you doing?

And are the new FRS101/102 relevant to the audit elective? Or just core? (I'm only sitting elective).

If so - do any core people have summary notes on that??

Well it was a mock paper, which are normally a lot harder.

AuditAgain

Does anyone have a copy of the Rowland case? Can only seem to see the mark scheme up on the portal.

Also - how are others preparing for the elective? Any tips from people that have passed?

AuditAgain

How are people getting on now?

I've had a worrying thought that I hope doesn't materialise. They don't usually have complex FR on the elective (which is about right because it's examined elsewhere I.e. at core, aafrp etc).

But I remember last year being a shock compared to previous years. My nightmare would be if something like incorrect accounting for an acquisition in a Group came up. Or the audit risks are related to construction contracts. They might justify it as 'there's increased FR focus at FAE core so your expected to be comfortable with it'. But as a resitter it'd be a disaster.

It's unlikely Id say. But I might take a quick look at group accounting notes at some stage in the next week.

20 Times 20 Times

Bit worried myself about it now , expecting some sort of director transaction this year

AuditAgain

That's something I actually haven't looked at. Not even sure where that's covered in my notes!

Dellboy2007

I'd say a complex accounting treatment question is highly likely. The plus side of this is that it's one indicator, and chances are most people will bollocks it up. They don't tend to examine obscure things too often. Ultimately you're probably going to get one on ethics, one on risks, 2 on substantive, 1 on fraud/laws and regs, one on audit report, one on other engagements. If you know them areas well you have the paper passed.

Torres999

I think I am a lot better prepared this year, i'm struggling to do full days study in the last week. I think i've looked at everything but then do a case and there's something new.

Just gonna keep doing cases in the morning and topics 1-6 in the evening for the next 6 days. Chill next Wednesday and then hopefully never look or work in audit again.

FR and Corp Gov are my biggest fears because I haven't looked at them in a year.

Im also massively hoping the pass rate rises a bit this year.

Torres999

Also if equity settled share based payments comes up like in that steps case ill collapse onto the ground

20 Times 20 Times

Torres999 wrote: »

Also if equity settled share based payments comes up like in that steps case ill collapse onto the ground

God I haven't looked at that steps case in a few weeks think I might go over them again !! I'm same as yourself can't even do a full day study at the moment last three weeks on audit have been painful !!

AuditAgain

Torres999 wrote: »

Also if equity settled share based payments comes up like in that steps case ill collapse onto the ground

Sure that would be brilliant - we'd have the answer in our folders

Think if anything complex comes up the emphasis is more on gaining sufficient appropriate audit evidence (and having enough understanding of the accounting standards to spot if they've done something fundamentally wrong). Like in that steps case, the point seems to be that we haven't done enough work or got enough evidence as opposed to any technical accounting.

Calculations etc. of anything more than a simple nature really should be outside the scope of the elective.

I hope that belief doesn't get disproved by examiners looking to **** **** up.

Dellboy2007

I'm hoping investments comes up. Would be nice to see a more FS style paper for once, especially given that 99% of all papers so far have been industry.

Inventory - what is that?!

AuditAgain

God don't jynx it.

FS would be a disaster for me. I think they probably stick to industry as it's seen as the 'norm', so people can't complain that people benefited from specialist experience.

Which must be fairly annoying for around half the Big 4 trainees in Dublin working in FS.

You have me panicked now!

Dellboy2007

AuditAgain wrote: »

God don't jynx it.

FS would be a disaster for me. I think they probably stick to industry as it's seen as the 'norm', so people can't complain that people benefited from specialist experience.

Which must be fairly annoying for around half the Big 4 trainees in Dublin working in FS.

You have me panicked now!

Well technically people working in industry have "specialist experience" as they work in them areas where as we don't. I think it is only fair that they should balance it out a bit, especially considering investments is actually a part of the syllabus and the massive FS industry operating in Ireland. I think more than half of big 4 work in FS, albeit most of pwc asset management now do APM.

I reckon the reason they don't is probably because those involved in lecturing/setting exams would have trained in industry.

20 Times 20 Times

Dellboy2007 wrote: »

Well technically people working in industry have "specialist experience" as they work in them areas where as we don't. I think it is only fair that they should balance it out a bit, especially considering investments is actually a part of the syllabus and the massive FS industry operating in Ireland. I think more than half of big 4 work in FS, albeit most of pwc asset management now do APM.

I reckon the reason they don't is probably because those involved in lecturing/setting exams would have trained in industry.

Financial services audit comes up the pass rate wil be low again !!

Dellboy2007

People don't fail this exam on one indicator

20 Times 20 Times

Dellboy2007 wrote: »

People don't fail this exam on one indicator

I understand that but given the high stakes and pressure involved this year I don't think they will ask an industry out of the norm !!

Biggest industries in ireland will be tested , manufacturing , pharma , along with with hotel industry or charity in my opinion !

That's my guess at the three cases

Torres999

Id love the hotel industry, especially after doing the Perchant Hotels case today, and I've looked over charities too because I have a feeling about that.

FS services can f*** right off.

Dellboy2007

20 Times 20 Times wrote: »

I understand that but given the high stakes and pressure involved this year I don't think they will ask an industry out of the norm !!

Biggest industries in ireland will be tested , manufacturing , pharma , along with with hotel industry or charity in my opinion !

That's my guess at the three cases

The standard ones will come up I agree, but I fancy either an aircraft leasing or fund to come up also. Investments or PPE both due up.

Over 40% of global funds are adminisrated here and over 50% of aircraft leasing companies.

Will just have to wait and see I guess

Torres999

At the risk of jinxing it, there's no a hope of aircraft leasing, there would be uproar and that's the last thing they need after last year. Last year was straight forward and had a low pass rate, don't think they'll be throwing stuff like that in tbh. Nobody outside the Big 4 would have ever seen Funds or Aircraft Leasing audit

Dellboy2007

Torres999 wrote: »

At the risk of jinxing it, there's no a hope of aircraft leasing, there would be uproar and that's the last thing they need after last year. Last year was straight forward and had a low pass rate, don't think they'll be throwing stuff like that in tbh. Nobody outside the Big 4 would have ever seen Funds or Aircraft Leasing audit

I don't see why not, an aircraft leasing company would be no more different than any other company. I also don't get why there would be uproar, should people in FS have caused uproar when inventory cycle came up last year? It's as foreign to us as aircraft leasing is to you!

Torres999

Thats just simply untrue. Inventory systems is basic and comes up at Cap 2 level regularly

Dellboy2007

Torres999 wrote: »

Thats just simply untrue. Inventory systems is basic and comes up at Cap 2 level regularly

You're missing the point.

So should people in FS who are doing cap 2 go mad that inventory comes up?

Torres999

Yeah if you want I dont really care

Dellboy2007

Torres999 wrote: »

Yeah if you want I dont really care

Funny how you cared 2 minutes ago

Confused Accountant

Torres999 wrote: »

Thats just simply untrue. Inventory systems is basic and comes up at Cap 2 level regularly

I'd agree with this. Inventory etc. are basic areas of a basic company that even though we in FS don't see it in our day to day work it doesn't take a genius to know how they should work. Even working in FS, I'd be screwed if aircraft leasing came up because I don't work in that area (only a relatively small portion do) and they would have a way bigger advantage over everyone else than someone working in general audit has when it comes to something simple like inventory or debtors.

A lot of people had a big cry last year when they failed because it's so general audit focused but the reality is this isn't that big an advantage and the specific areas they ask are basic areas that we've seen in all exams to date!

Dellboy2007

I think people working in industry would have been able to look at that industry cycle last year and immediately see issues. So despite it being a "basic" area of auditing, there is still an advantage there. My point is that even if they examined an FS area once every couple of years it might balance it out a bit!

Confused Accountant

They're not gonna do any highly specialised areas such as funds or aircraft leasing any time soon. They'll stick with general areas like inventory, debtors, purchases etc. that FS people can practice through the numerous cases that deal with them areas. There's no workbook cases or anything that deal with investing activities in a fund so no way for prior practice!

20 Times 20 Times

Possibly a charity but apart from that I think it wil be the usual industry's !

Getting a bit apprehensive about this exam now at this stage ! Still 7 full days left to clear things off though !

Dellboy2007

Confused Accountant wrote: »

They're not gonna do any highly specialised areas such as funds or aircraft leasing any time soon. They'll stick with general areas like inventory, debtors, purchases etc. that FS people can practice through the numerous cases that deal with them areas. There's no workbook cases or anything that deal with investing activities in a fund so no way for prior practice!

Yeah that's a good point actuall, didn't think of that

AuditAgain

Yeah, I can see how it might be frustrating for FS people. But even though it's a large industry in Ireland, it is specialised. 'Industry' is a catch all term for 'normal' companies in a worldwide sense.

I don't think it's beyond coming up though. Financial advisors came up in 2013 and I think aircraft leasing has been on either CAP2 FR or core. Can anybody remember a question to do with aircrafts? Want to look at it now I'm paranoid it's been jinxed haha.

AuditAgain

Did the 2014 paper today under time constraints and think I possibly would have scrapped a pass.

Which isn't that great considering I sat that paper last year, analysed it at length afterwards, and have been through the mark scheme.

20 Times 20 Times

AuditAgain wrote: »

Did the 2014 paper today under time constraints and think I possibly would have scrapped a pass.

Which isn't that great considering I sat that paper last year, analysed it at length afterwards, and have been through the mark scheme.

Sitting it tomorrow , looking forward see how ip get on

Dellboy2007

20 Times 20 Times wrote: »

Sitting it tomorrow , looking forward see how ip get on

I think it's so different doing it without the pressure on, like I could barely read the paper last year after the 2 days of doing core.

Torres999

I did it again last week and actually could barely remember it from last year, it was all a blur day 3. I actually thought it was ok with no pressure on. Didnt have a clue what was going on with the group audit question last year but found it grand then last week. There just seems to be so much more in the audit elective compared with the other two and after 2 days of core its just a step too far

Confused Accountant

I think anyone repeating just audit elective this year is in a strong position. Thinking about it logically were graded on a curve (no offence meant) but we're not gonna have two days of core on our backs when we walk in. We have also devoted FAR more time to the elective this year compared to last year and will purely be in an audit headspace rather than an "I have to think of everything" headspace you need in core. Hopefully I don't jinx anything but I think things could be worse!

Torres999

Yeah I agree, my main worry was that I wouldn't be to speed with doing case studies like people doing the core but think i've done enough cases in the last 2/3 weeks now. Its always a worry for things like FR but even if worst case scenario and an obscure FR indicator comes up its 1/9 indicators.

If I think back to last year I used to do one elective day a week so probably looked it 10-12 times in total last year before the exam, I had never even heard of things like ISQC 1 and some other basics going in to the exam.

AuditAgain

Yeah I hope it works out that way. I definitely feel more confident with the material. I've been into that APB standards book more than I ever though I would. Used to think it was useless.

My worry though (can't help but worry) is that people sitting both are definitely more practiced at doing case studies under time pressure/spotting things in cases and also this year with the increased focus in FR they'll be stronger in that department too.

The truth is though if there wasn't only one sitting a year I'd feel fully confident. The fact that there's only one leaves me liable to panic/freak out.

20 Times 20 Times

Why is the pass rate for second time repeats not better then ?? If we have spent more time and less obstacles in our way ! I had this conversation with a friend and that's what I can't get my head around!

Confused Accountant

AuditAgain wrote: »

Yeah I hope it works out that way. I definitely feel more confident with the material. I've been into that APB standards book more than I ever though I would. Used to think it was useless.

My worry though (can't help but worry) is that people sitting both are definitely more practiced at doing case studies under time pressure/spotting things in cases and also this year with the increased focus in FR they'll be stronger in that department too.

The truth is though if there wasn't only one sitting a year I'd feel fully confident. The fact that there's only one leaves me liable to panic/freak out.

What do you find yourself using the standards book for? I find I have rarely used it up to now, more using the lecture notes and my own knowledge. The only time I really open the standards book is for something very specific I need to look up. I don't use it that much because I know they don't like transposing from standards.

Torres999

20 Times 20 Times wrote: »

Why is the pass rate for second time repeats not better then ?? If we have spent more time and less obstacles in our way ! I had this conversation with a friend and that's what I can't get my head around!

I purposely haven't looked at the pass rate for repeats just so I wouldn't get nervous, I'm hoping a lot for those repeats are also doing core