Audit Elective FAE 2012

Jamesw2

I don't think there is. However there is a sample audit report in that credit union practice note that has it. Sorry can't be of more use. I know its not on the competency statement but I wouldnt rely on it anyways. Sink or swim..

notanocelot

What do we actually need to get to pass the elective?

For example, I just did Sim 3 from last year and from self-marking estimate that I got 2 Cs, 1 RC and 1 borderline RC/NC. If that was extrapolated across all the paper, is that a pass? A fail? How much do RCs count for? Anyone know?

Edited to specify that it can't be 'you must do well across each area' because one of the principles of the new FAE is that one indicator can't sink you, and with 10 indicators or so there isn't room for multiple indicators in each of the 6 areas identified in the competency statement.

KenHy

Short answer - nobody knows.

Long answer - works the same as sufficiency for the core, so for each HC & C, you'll get a certain (publicly unknowen) score - for a RC you'll get something less than that (How much less nobody knows) and you get nothing for NC or NA.

If these unkowen numbers add up to another unkowen number (to be decided by the FAE board) or above, you'll pass.

Guesswork - Sean Murry said in a lecture if you got 6 C/HC scores he'd be surprised if you didn't pass.

Jamesw2

Is there a sample paper 2 for audit elective? Cant find it on the student website? Anyone know if there's one?

alphacalc

Hi

Could somebody put up the Ballydegan case and solution, please?

figrolls

Just wondering if anybody has a summary/index of case studies by indicator for the audit elective?

Would be much appreciated if anybody could help us all out!

figrolls

alphacalc wrote: »

Hi

Could somebody put up the Ballydegan case and solution, please?

http://students.charteredaccountants.ie/student-information/Courses/New-Syllabus/Sample-Papers--Solutions/FAE-Sample-Papers-and-Solutions/FAE-Elective-Sample-Papers/

its sim 1 of the sample paper

funkymonkey9

Here's some audit work programmes for different accounts split by assertion

figrolls

Thanks very much for that,its greatly appreciated!!

Peanut_M

Does anyone have the solution for Pension Fund Limited??

Can't believe the exam is Thursday week!

figrolls

Peanut_M wrote: »

Does anyone have the solution for Pension Fund Limited??

Can't believe the exam is Thursday week!

here you go!

barrystealover

how do they get average contribution per limiting factor of 39 in the mock 2012 core comp paper.???

Peanut_M

Thanks Figrolls!

Jamesw2

Has anyone got the question to Pension Funds?

figrolls

Jamesw2 wrote: »

Has anyone got the question to Pension Funds?

there you go

tomfoolery60

Jamesw2 wrote: »

Is there a sample paper 2 for audit elective? Cant find it on the student website? Anyone know if there's one?

No there is no second sample paper - it was something the poor sods in 2010 were giving out a stink about. Also, I reckon that Credit Union case in Sample Paper 1 is outside of the competency statement.

Peanut_M

tomfoolery60 wrote: »

No there is no second sample paper - it was something the poor sods in 2010 were giving out a stink about. Also, I reckon that Credit Union case in Sample Paper 1 is outside of the competency statement.

That credit union case is horrendous!! Not overly fond of any of sample paper 1 to be honest ... hope we get a more do-able paper!

Username2011

Hi guys - just wondering if anyone has looked at SIM 3 of the Audit elective paper in 2011?
It's the RX Pharmaceutical products where you are looking at their revenue recognition.

The solution has the journal as follows:

Primary Indicator #3
[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]Correcting entries as follows:
DR Trade debtors / Accrued income 660,000
CR Revenue 660,000
being recording of sale to customer

DR Cost of sales 600,000
CR Trade creditors / accruals 600,000
being recognition of invoices from Medical Suppliers Inc.

But a note in the examiner comments says:
Credit was given for recognising stock at year end if appropriate assumptions were adequately documented.

I had my journal as
Dr Consignment stock 600k
Cr Trade creditors / accruals 600k

I was just wondering if Consignment stock was what the examiner was referring to here?
[/FONT][/FONT]

Username2011

Another question if that's ok.

It's to do with reports to third parties
I understand the the differences between a review (ISRE 2400), agreed upon procedures (ISR 4400) and a compilation (ISR 4410).
However, what is confusing me is how M39 Reporting third parties relates to this.

Take for example the 2011 audit elective paper. The audit senior was asked by his client Chevhall to prepare an agreed upon procedures report on a company who holds a franchise with Chevahall. The solution states:

"We have performed the procedures agreed with you and detailed below with respect to the consignment inventory held by Executive Motors Limited, set forth in the accompanying schedules. Our engagement was undertaken in accordance with Miscellaneous Technical Statement M39 "Reporting to Third Parties" OR the International Standard on Related Services applicable to agreed-upon procedures engagements. "

If I was preparing the solution to this I would have stated "Our engagement was undertaken in accordance with ISRS 4400". Would this have been correct? And if so, in what circumstances does one ever use M39?

funkymonkey9

Username2011 wrote: »

Another question if that's ok.

It's to do with reports to third parties
I understand the the differences between a review (ISRE 2400), agreed upon procedures (ISR 4400) and a compilation (ISR 4410).
However, what is confusing me is how M39 Reporting third parties relates to this.

Take for example the 2011 audit elective paper. The audit senior was asked by his client Chevhall to prepare an agreed upon procedures report on a company who holds a franchise with Chevahall. The solution states:

"We have performed the procedures agreed with you and detailed below with respect to the consignment inventory held by Executive Motors Limited, set forth in the accompanying schedules. Our engagement was undertaken in accordance with Miscellaneous Technical Statement M39 "Reporting to Third Parties" OR the International Standard on Related Services applicable to agreed-upon procedures engagements. "

If I was preparing the solution to this I would have stated "Our engagement was undertaken in accordance with ISRS 4400". Would this have been correct? And if so, in what circumstances does one ever use M39?

Sean said in the lecture on those standards to ignore para 29 to 38 of m39 as it is covered in Isrs4400,I think the key thing to take from m39 is the contents of appendix 2 where it describes wording you should avoid in reporting to third parties,like don't say we reviewed something and ensure they know the work was not an audit,I have the following paragraphs highlighted from watching the lecture 7,10,14-19,23-25,26,28. Also in the wrap up lecture I actually crossed m39 off my competency statement because read said if aup comes up,the isrs is the relevant document!additionally it's doubtful that will appear again this year and Sean had a strong feeling it will be prospective financial information.

Username2011

funkymonkey9 wrote: »

Sean said in the lecture on those standards to ignore para 29 to 38 of m39 as it is covered in Isrs4400,I think the key thing to take from m39 is the contents of appendix 2 where it describes wording you should avoid in reporting to third parties,like don't say we reviewed something and ensure they know the work was not an audit,I have the following paragraphs highlighted from watching the lecture 7,10,14-19,23-25,26,28. Also in the wrap up lecture I actually crossed m39 off my competency statement because read said if aup comes up,the isrs is the relevant document!additionally it's doubtful that will appear again this year and Sean had a strong feeling it will be prospective financial information.

Thanks! That really helps! Thanks!

figrolls

probably have left this waaay too late but,

was going to look at the sean murray online lectures this week as I was unable to go to my lectures due to work

are they worth it? or would my time be better spent reading the ISA's?

funkymonkey9

figrolls wrote: »

probably have left this waaay too late but,

was going to look at the sean murray online lectures this week as I was unable to go to my lectures due to work

are they worth it? or would my time be better spent reading the ISA's?

Don't start watching lectures at this stage,I'd advise you look at the revision document for session 9 I think and look at the standards on it,Sean had a feeling Isa 600 and prospective financial info are going to come up and Isa 402,no going concern Isa 570 inside out especially the impact on the audit report of the different scenarios,Isqc1 in particular engagement acceptance and Isa 240!maybe Isa 610 too,think doing the cases would be a good thing to do as a lot of things can't be learned from standards like controls,reviewing a workpaper,identifying risks and designing procedures,practise is important for those areas!

figrolls

funkymonkey9 wrote: »

Don't start watching lectures at this stage,I'd advise you look at the revision document for session 9 I think and look at the standards on it,Sean had a feeling Isa 600 and prospective financial info are going to come up and Isa 402,no going concern Isa 570 inside out especially the impact on the audit report of the different scenarios,Isqc1 in particular engagement acceptance and Isa 240!maybe Isa 610 too,think doing the cases would be a good thing to do as a lot of things can't be learned from standards like controls,reviewing a workpaper,identifying risks and designing procedures,practise is important for those areas!

Thanks for that!

Have gone through most of the ISA's at this stage and have done all the questions at least once, found the mock and past papers way better than the resource pack questions

thanks again for your advice!

KenHy

Username2011 wrote: »

Another question if that's ok.

It's to do with reports to third parties
I understand the the differences between a review (ISRE 2400), agreed upon procedures (ISR 4400) and a compilation (ISR 4410).
However, what is confusing me is how M39 Reporting third parties relates to this.

Take for example the 2011 audit elective paper. The audit senior was asked by his client Chevhall to prepare an agreed upon procedures report on a company who holds a franchise with Chevahall. The solution states:

"We have performed the procedures agreed with you and detailed below with respect to the consignment inventory held by Executive Motors Limited, set forth in the accompanying schedules. Our engagement was undertaken in accordance with Miscellaneous Technical Statement M39 "Reporting to Third Parties" OR the International Standard on Related Services applicable to agreed-upon procedures engagements. "

If I was preparing the solution to this I would have stated "Our engagement was undertaken in accordance with ISRS 4400". Would this have been correct? And if so, in what circumstances does one ever use M39?

on M39 - I always saw it as supplementary to the others - I know Sean said that you could use other standards instead, but most of them reference back to M39! It's specifically for when the report is for an external 3rd party (e.g. a bank), so ISRS 4400 is relevant for AUP engagements - that's all you have to worry about if it's been performed for say senior management in a divisionlised organisation, but in the Chavell case, I think both are independently relevant as you are performing an AUP engagement for a 3rd party.

Just my view on it, could be wrong, but my reading of the standards and the lectures would not lead me to think that you could ignore M39 in favour of something else - nothing else deals with limiting your liability to 3rd parties so there is nothing that replaces it!

figrolls wrote: »

probably have left this waaay too late but,

was going to look at the sean murray online lectures this week as I was unable to go to my lectures due to work

are they worth it? or would my time be better spent reading the ISA's?

I found the lectures very useful (I watched all of them online, but it was just after the mocks!) - if you feel like your a bit of the ball on some of the standards I'd definitely watch, maybe have a read through the session notes first to see if you want to spend time on whatever standards he covers in that particular lecture. I think it's much easier to learn them with someone pointing out the important bits and putting them into a context (would be time consuming at this stage though!) -

If your confident enough on them already and just want to make sure you've got everything, just give the standards a read and make sure there's nothing on them that somehow passed you by previously, no need to see lectures at that stage

notanocelot

Don't cross off M39.

M39 is about limiting our liability to the third parties which is VERY IMPORTANT.

An indicator along the lines of "client wants us to do up this thing to show to the bank, can you look at that and tell me what sort of engagement letter we should do up?"

is going to require

i) IS?? xxxx (The actual engagement and how we perform it)
and
ii) M39 (the different ways we can cover ourselves with regard to the third party, like setting a liability cap, or getting them to acknowledge that we have no liability)

because if we just go ahead with the non-audit engagement without putting any of these caveats in place bad things could happen.

figrolls

Just came across this in the 2011 fae thread, the second tab is indicators idex for the audit elective, needs to be updated for Mock 2012 and 2011 paper but might be some help to us!

tomfoolery60

Username2011 wrote: »

Hi guys - just wondering if anyone has looked at SIM 3 of the Audit elective paper in 2011?
It's the RX Pharmaceutical products where you are looking at their revenue recognition.

The solution has the journal as follows:

Primary Indicator #3
[FONT=Arial,Arial][FONT=Arial,Arial]Correcting entries as follows:
DR Trade debtors / Accrued income 660,000
CR Revenue 660,000
being recording of sale to customer

DR Cost of sales 600,000
CR Trade creditors / accruals 600,000
being recognition of invoices from Medical Suppliers Inc.

But a note in the examiner comments says:
Credit was given for recognising stock at year end if appropriate assumptions were adequately documented.

I had my journal as
Dr Consignment stock 600k
Cr Trade creditors / accruals 600k

I was just wondering if Consignment stock was what the examiner was referring to here?
[/FONT][/FONT]

It would just be stock, rather than consignment stock (the idea being that RX had the stock on their premisies - not stock it owned at another location). If you meant to indicate that it was not really RX's stock, then the sale would be the appropriate treatment (you wouldn't recognise the stock in RX's books in that instance).

Username2011

tomfoolery60 wrote: »

It would just be stock, rather than consignment stock (the idea being that RX had the stock on their premisies - not stock it owned at another location). If you meant to indicate that it was not really RX's stock, then the sale would be the appropriate treatment (you wouldn't recognise the stock in RX's books in that instance).

Oh yes, that's right. It definitely wouldn't have been consignment stock in hindsight. Thanks!

funkymonkey9

Can anyone tell me when revenue should be recognised in the accounts?is it on despatch of goods,is it when the customer signs the delivery docket or is it when we send an invoice?also in terms of services,do we recognise revenue when we've completed the service or when we invoice for it? Thanks