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!