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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:34:58] Ansi: SESSION 1 - Introduction , Concept of auditing and other assurance engagements
[21:35:23] Ansi: So let’s start : )
F8 exam is going to take place on 8th of December, that means we have 21 weeks to prepare for it.
Those who will sit F7 together with F8 , that will be a real challenge, since F7 exam will take place on 7th of dec, that
leaves you with only one night of “last minute prep”.
[21:35:34] Ansi: Please do participate actively in sessions and feel free to tell all your ideas and suggestions, including
those regarding our schedules and order of topic that we follow.
Now I need to say some things before we start.
[21:35:44] Ansi: Firstly, I will repeat that our sessions will be mainly based on syllabus, which you can download here:
http://www2.accaglobal.com/pubs/students/acca/exams/f8/syllabus/f8int_syll_sg2011.pdf
Syllabus is divided to parts A,B , C etc, and subparts 1, 2,3 we will call chapters.
[21:35:56] Ansi: Secondly, there is a separate portal for F8 at ACCA website:
http://www2.accaglobal.com/students/acca/paperf8/
[21:36:06] Ansi: You can start by reading examiner’s approach for F8 :
http://www2.accaglobal.com/pubs/students/acca/exams/f8/syllabus/f8int_syll_sg2011.pdf
[21:36:20] Ansi: Plus you need to check examinable documents:
http://www2.accaglobal.com/pubs/students/acca/exams/f8/examinable/IntUK2011examnotes.pdf
F8 is based on International Standards on Auditing – ISAs, issued by International Auditing and Assurance Standards
Board (IAASB) : http://www.ifac.org/IAASB/
[21:36:35] Ansi: However not only IASs are included to our examinable documents, but also International Auditing
Practice Statements (IASPs) , 1 standard on assurance engagements, ACCA code of ethics and conduct and Uk Corporate
Governance Code as an example of code of best practice.
[21:36:50] Ansi: Exam will consist of 5 relatively lengthy questions, all of them are compulsory. Questions will mostly
require a narrative response. However calculations and interpretations of basic ratios will be included as some parts of
questions in the context of audit planning and review.
[21:37:01] Ansi: . If you previously sat F3 or similar paper, that basic accounting knowledge will be highly relative.
[21:37:12] Ansi: Question 1 – scenario based case study question worth 30 marks. It will be broken down to range of
sub-questions, which will examine different audit procedures.
[21:37:25] Ansi: Scenario will be most likely based on profit making company. Previously examined areas for question 1
are : identification of system deficiencies, implications of these and recommendations, writing of management reports,
control objectives and tests of control, substantive procedures over income
[21:37:35] Ansi: statement and SFP entries, audit evidence and audit planning. Examiner says that they will be continue
to be examined in question 1, as well as audit risk, internal audit and assurance etc.
[21:37:45] Ansi: Question 2 – knowledge based question, worth 10 marks. It’s a short factual question, usually based on
ISA’s , but might also cover other some other technical areas. Normally it contains 2-3 requirements (e.g. some terms
from this or that ISA, different lists etc) covering different areas. There
[21:37:56] Ansi: is no credit for ISA numbers.
[21:38:05] Ansi: Question 3, 4, 5 – can be set in any way and examine any part of syllabus. Each of them is worth 20
marks.
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:38:13] Ansi: Question 3 and 4 – scenario – based either on profit or non – for profit entity.
Question 5 – mainly based on audit review and reporting.
[21:38:23] Ansi: In order to ease your preparation, you can benefit from BPP and Kaplan ‘s past paper questions
analysis, which outlines which areas of syllabus where examined and when.
[21:38:33] Ansi: In our post about schedule :
http://opentuition.com/groups/f8-audit-and-assurance/forum/topic/f8-int-group-study-sessions-%e2%80%93-dec2011/#post-68549
[21:38:40] Ansi: I will explain in more details what to prepare for this or that session and will try to provide any useful
links that I have.
[21:38:52] Ansi: For the moment I have already uploaded quite a lot of links there. Please do benefit from those
resources.
Now I also wanted to give you some resources that I can’t publish at forum. Here they are
[21:39:20] Ansi: http://ebooks2000.blogspot.com/search/label/ACCA%20Study%20Material
http://www.filesonic.com/folder/71b55e291ace2973f
http://pakaccountants.com/
http://www.acca-london.blogspot.com/
http://accabooks.blogspot.com/search/label/F7%20Financial%20Reporting
http://www.mockaccacat.blogspot.com/
[21:39:31] Ansi: I have already downloaded all what I could find for F8 and grouped them together.
As long as we are going to study all together, I decided to share all those with you. You can download all of them here :
http://www.zshare.net/download/92597300f774b655/ (this link might not work for some countries , don’t know why)
[21:39:43] Ansi: As for the rest of materials we will use 2010 books for the moment, until we all get our 2011 materials,
but will check 2011 syllabus, to ensure that we study relevant topics.
Please try to get either Kaplan or BPP 2011 books, or both of them.
[21:39:55] Ansi: IF anyone finds links to free BPP 2011 books for F8 , please share with us..!!
Hopefully our sessions will be beneficial and not just a time waste. And also hope that it will be not only me who share
materials here : )
[21:40:00] Ansi: END
[21:40:15] Ansi: i'll wait till you finish reading
[21:40:17] sajjadchangezi: 1st link is not working
[21:40:19] Ansi: or scrolling :)
[21:40:26] lizabeth: done
[21:40:29] sajjadchangezi: <a href='http://ebooks2000.blogspot.com/search/label/ACCA%20Study%20Material
[21:40:29] Ansi: i might mistype the end
[21:40:30] sajjadchangezi: this one
[21:40:32] mazed132: i think i have let me check
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:40:38] Ansi: try to open simply till com
[21:40:47] Ansi: i mean http://ebooks2000.blogspot.com
[21:40:55] Ansi: i use this site every day and it is woking
[21:41:06] Ansi: as for path , i'm sure i just forgot any letter or symbol at the end
[21:41:28] Ansi: {mazed132} hi mazed :) nice to see that u joined us
[21:42:02] Ansi: sajjad, working now?
[21:42:15] mazed132: {Ansi} thanks :)
[21:42:19] sajjadchangezi: {Ansi} last one is also not working :(
[21:42:19] Ansi: welcome
[21:42:32] Ansi: zhare?
[21:43:12] mazed132: http://sites.google.com/site/accastudymaterial/system/app/pages/search?q=f8&scope=searchsite&offset=20
[21:43:14] lizabeth: how does zshare work?
[21:43:16] Ansi: i checked them all just today ...if it's not working then , there must be some mistake in links ..due to
recopying
[21:43:24] Ansi: lol
[21:43:29] Ansi: look at last link
[21:43:29] lizabeth: it works in mine
[21:43:31] mazed132: u will find bpp study text there int variant
[21:43:33] Ansi: it's just too together
[21:43:37] Ansi: devide them
[21:43:55] Ansi: {mazed132} but not 2011
[21:43:57] sajjadchangezi: {mazed132} thanks .. that link works :)
[21:43:59] Ansi: i searched all over internet
[21:44:04] Ansi: if anyone DOWNLOADED IT
[21:44:07] Ansi: then tell me
[21:44:22] lizabeth: zshare is for what?
[21:44:32] mazed132: ok stand by then
[21:44:35] littlestart: {Ansi} thanks for your hard working
[21:44:39] Ansi: my collection of mateials
[21:44:40] lizabeth: i dont understand the website :(
[21:44:42] Ansi: you are welcome fish
[21:44:47] Ansi: lizzy
[21:44:53] Ansi: it's just a site to upload stuff
[21:45:00] lizabeth: oww
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:45:00] Ansi: i uploaded my collection of materials there
[21:45:01] lizabeth: ok
[21:45:41] sajjadchangezi: {Ansi} whr ?? sorry can u tell again please ?
[21:45:48] lizabeth: oh..i understand
[21:45:56] Ansi: i'm sorry, tell what again?
[21:46:09] sajjadchangezi: {Ansi} that u uploaded ur materials
[21:46:17] sajjadchangezi: where did u uploaded ?
[21:46:45] Ansi: http://www.zshare.net/download/92597300f774b655/
[21:47:05] sajjadchangezi: {Ansi} thanks :)
[21:47:21] lizabeth: so is it Q&A time:)
[21:47:30] Ansi: yes
[21:47:37] sajjadchangezi: {Ansi} i hav security issue now at my pc . .thats y its not opening i think
[21:47:48] Ansi: okay guys
[21:47:53] mazed132: yes bro my link works but its for 2010 will that do?
[21:47:53] Ansi: i just need to tell something
[21:47:54] lizabeth: yep
[21:48:00] Ansi: if y ou have any problems with those links
[21:48:01] mazed132: otherwise i have kaplan 2011
[21:48:05] Ansi: please don't post about it on forum
[21:48:11] Ansi: just addme as friends and send PM
[21:48:12] Ansi: there
[21:48:19] lizabeth: kk
[21:48:23] Ansi: otherwise your post will be simply deleted
[21:48:30] sajjadchangezi: {Ansi} ok thanks .. but only private members can pm u
[21:48:39] Ansi: no
[21:48:45] Ansi: on forum if u add me
[21:48:49] Ansi: anyone can pm me
[21:48:50] Ansi: :D
[21:48:56] sajjadchangezi: hmm .. yeh i can .. :)
[21:49:07] Ansi: i mean forum , not chat room :D
[21:49:11] Ansi: hope u got it
[21:49:17] sajjadchangezi: {Ansi} lol .. sure
[21:49:18] Ansi: nadeem is the most silent here
[21:49:24] Ansi: nadeem , are you studying F8?
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:49:45] lizabeth: maybe not..maybe yes
[21:49:49] nadeem_baig75: i have passed
[21:49:54] sajjadchangezi: ok so which varient are we goin to study here ?
[21:49:54] lizabeth: lmao
[21:49:58] Ansi: oh ...congratulations!!! :)
[21:50:08] Ansi: so we wil be looking at u and envy you :)
[21:50:11] Ansi: okay guys
[21:50:12] lizabeth: so u are invigilating?
[21:50:15] Ansi: let's start then :)
[21:50:24] lizabeth: ok..
[21:50:29] Ansi: hehe , it's nice to have some seniors around :)
[21:50:47] Ansi: okay .. audit framework and regulation
[21:50:58] Ansi: the concept of adutig and other assurance engagement
[21:51:01] Ansi: well
[21:51:07] Ansi: the most obvious question
[21:51:10] Ansi: what is an audit
[21:51:14] Ansi: and what is an assurance
[21:51:18] Ansi: what's the difference?
[21:51:51] sajjadchangezi: an auditor audits to give assurance to stakeholders ...
[21:51:52] Ansi: ah btw...after checking several books, surprisingly i found Emile Wolf quite helpful
[21:51:56] lizabeth: audit is giving an idependent opinion of a group of FS
[21:52:01] Ansi: kaplan was okay as well ..didnt' check bpp yet
[21:52:25] Ansi: {sajjadchangezi} good, but could be better to ad what he audits
[21:52:30] Ansi: {lizabeth} yea
[21:52:33] sajjadchangezi: the f/s
[21:52:34] lizabeth: to the owners...
[21:52:35] SadiaQtr: Audit is of high level
[21:52:43] SadiaQtr: whereas assurance is of moderate level
[21:52:49] SadiaQtr: its not as deep as audit
[21:52:49] Ansi: so it's the examination of accounts with the purpose of giving an opinion about them
[21:52:54] lizabeth: assurance isnt comulsory
[21:52:55] lizabeth: ..
[21:53:02] Ansi: {SadiaQtr} hi , welcome to the session
[21:53:06] SadiaQtr: Thnx
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:53:09] sajjadchangezi: {SadiaQtr} welcome :)
[21:53:14] mazed132: audit isn't also compulsory for everyone
[21:53:15] SadiaQtr: {SadiaQtr} was it rite?
[21:53:37] faizmalik: yes
[21:54:02] faizmalik: normilly external audit is complsory
[21:54:09] SadiaQtr: {Ansi} whts the diff
[21:54:10] lizabeth: audit..external is compulsory
[21:54:16] mazed132: nope not for small companies
[21:54:17] SadiaQtr: plz tell it fast i have to leave
[21:54:19] sajjadchangezi: yeah coz its statutory
[21:54:25] lizabeth: ..well for companies with income >6.5 m
[21:54:40] lizabeth: pounds..
[21:54:47] Ansi: sorry, was distracted
[21:55:03] faizmalik: but for some business internat audit is also complsry
[21:55:22] Ansi: well there are very many different definitions
[21:55:23] sudeepshrestha: whats happening
[21:55:30] mazed132: {lizabeth} :yes:
[21:56:03] Ansi: but generally audit is the official procedure , examination of fS , while assurance is rather the purpose
for which the work is done
[21:56:17] mazed132: ok
[21:56:20] faizmalik: can any explain why audit necessary
[21:56:25] Ansi: LSBF even explains it as an emotional state that shereholders get after all the audit
[21:56:26] Ansi: but
[21:56:33] Ansi: i'm not very happy with that explanation
[21:56:36] Ansi: that's why i was askingyou
[21:56:38] lizabeth: yeah
[21:56:42] Ansi: to hear different opinion
[21:56:47] lizabeth: its not clear
[21:56:50] mazed132: {faizmalik} to provide reasonable assureance to stakeholders about teh fairness of fiancial
statements
[21:57:02] Ansi: well yes , that's why it's called assurance
[21:57:05] sudeepshrestha: {faizmalik} internal or external
[21:57:21] faizmalik: as general
[21:57:22] lizabeth: ok
[21:57:30] Ansi: can anyone asswer the question of faizmalik
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[21:57:31] lizabeth: i got a definition here
[21:57:33] Ansi: why audit is necessary
[21:57:35] Ansi: and guys
[21:57:42] Ansi: it could be good if we discuss one question at time
[21:57:46] Ansi: otherwise it will be a bit messy
[21:57:47] lizabeth: ok
[21:57:49] sudeepshrestha: becoz
[21:57:57] faizmalik: yeah
[21:58:01] sudeepshrestha: 1st internal audit okay
[21:58:08] faizmalik: ok
[21:58:17] lizabeth: about assurance...
[21:58:18] Ansi: {lizabeth} go ahead
[21:58:25] Ansi: kaplan has one as well
[21:58:35] sajjadchangezi: the primary reason .. coz statute says it to audit ..
[21:58:45] sajjadchangezi: its compulsory
[21:58:49] lizabeth: its an engagement i which a practitioner expresses a conclusion...
[21:59:06] lizabeth: designed to enhance d degree of confidence
[21:59:09] faizmalik: internal audit is for to check system of company runinga
[21:59:23] lizabeth: of the intended users
[21:59:26] lizabeth: .
[21:59:35] Ansi: {lizabeth} yea , that's true , but does it distinguish it from audit?
[21:59:35] faizmalik: it report to audit committe not to shareholders
[21:59:51] lizabeth: its like a conclussion...
[21:59:56] sudeepshrestha: there are two kinds of audit and they are different
[22:00:05] faizmalik: how
[22:00:07] Ansi: okay
[22:00:08] Ansi: look
[22:00:10] Ansi: right now
[22:00:12] lizabeth: kinda like a final statement..to back up the audit result
[22:00:15] Ansi: we will dicuss only external audit
[22:00:20] lizabeth: kk
[22:00:21] Ansi: internal one will be in separate session
[22:00:24] sudeepshrestha: okay
[22:00:42] sudeepshrestha: share holder need some reliable information
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:00:55] sudeepshrestha: whether to trust directors or not
[22:00:56] asb006: hi..
[22:01:04] Ansi: {asb006} hi
[22:01:06] lizabeth: hi asb006
[22:01:22] asb006: where are we??
[22:01:32] Ansi: {asb006} i'm trying to figure it out myself
[22:01:39] lizabeth: audit and assurance
[22:01:40] Ansi: any more ideas about why we need audit?
[22:01:43] lizabeth: difference
[22:01:49] lizabeth: why?
[22:01:49] Ansi: {lizabeth} :)
[22:01:56] asb006: to satisfy the shareholder
[22:02:04] sudeepshrestha: so they hire some indipendent trustworthy people
[22:02:17] Ansi: yea
[22:02:17] lizabeth: for idle partners....that have no freaking idea of wats going on..
[22:02:22] lizabeth: also
[22:02:22] Ansi: :))
[22:02:27] lizabeth: for tax purposes
[22:02:40] asb006: for statutory need
[22:03:04] Ansi: okay
[22:03:20] Ansi: so , to satisfy the requirement of regulation
[22:03:27] lizabeth: good...
[22:03:32] Ansi: and to provide necessary info to shareholders
[22:03:36] Ansi: those are two main ones
[22:03:42] Ansi: thought there might be more
[22:03:43] Ansi: now
[22:03:57] Ansi: while you were discussing all that , i guess i got the difference between audit and assurance
[22:04:09] Ansi: and someone who answered that question before was correct
[22:04:24] Ansi: assurance is a more wide notion then audit
[22:04:31] Ansi: EW, p. 18
[22:04:42] lizabeth: ?
[22:04:51] faizmalik: audit is one type of assurance
[22:04:54] Ansi: yes!
[22:04:55] lizabeth: whats EW?
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:04:57] Ansi: what is the second type
[22:05:06] Ansi: EW - Emile Wolf
[22:05:08] faizmalik: review
[22:05:11] Ansi: yeap
[22:05:11] lizabeth: oww
[22:05:17] Ansi: {faizmalik} perfect
[22:05:17] faizmalik: others manay
[22:05:30] Ansi: so assurance can be provided by either audit
[22:05:32] Ansi: or review
[22:05:34] faizmalik: but focus in f8 audit
[22:05:39] Ansi: and what is review btw
[22:05:44] Ansi: what's the difference from audit
[22:05:50] sudeepshrestha has added a drawing:
[22:06:06] faizmalik: audit has legaly reguired
[22:06:23] Ansi: sudeep , not very nice of u :)
[22:06:24] lizabeth: review is the opposite...non legal req
[22:06:25] faizmalik: and is taken by shareholders
[22:06:50] faizmalik: but review is taken by banks , investers...........
[22:06:57] Ansi: okay but
[22:07:02] lizabeth: 3rd party yeah?
[22:07:02] Ansi: if u think of result
[22:07:06] Ansi: and dgree of assurance
[22:07:10] Ansi: that you receive by audit
[22:07:13] Ansi: and by review
[22:07:20] Ansi: which one gives a stronger assurance
[22:07:22] lizabeth: negative assurance...
[22:07:23] faizmalik: audit
[22:07:36] Ansi: right
[22:07:37] Ansi: why
[22:07:42] lizabeth: audit is stronger..i guess
[22:07:44] Ansi: what is the principle differnce betweeen those
[22:07:47] Ansi: yes liz
[22:07:50] faizmalik: has positive assuranc
[22:07:52] lizabeth: hmmm
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:08:07] faizmalik: high level of assurance
[22:08:08] Ansi: {faizmalik} yea post often it is expressed in form of positive assurance
[22:08:16] Ansi: btw, what is the difference between positive and negative one
[22:08:17] Ansi: :P
[22:08:26] faizmalik: i think
[22:08:35] lizabeth: :?
[22:09:02] faizmalik: that positive has more detail work than review
[22:09:15] lizabeth: yeah...faizmalik...
[22:09:21] lizabeth: i think he is right
[22:09:22] Ansi: well
[22:09:23] Ansi: positive
[22:09:26] Ansi: is when u check
[22:09:26] lizabeth: umm
[22:09:31] Ansi: and give an opinion
[22:09:38] Ansi: whether job is done properly or not
[22:09:45] Ansi: when alot of detailed checking is done
[22:09:52] Ansi: so that u got enough of information
[22:09:55] faizmalik: in audit
[22:09:55] lizabeth: ok
[22:09:58] Ansi: to provide that conclusion
[22:10:02] Ansi: but
[22:10:08] Ansi: if u get access to elss info
[22:10:19] Ansi: u might only report as "no errors were found"
[22:10:26] lizabeth: yes
[22:10:30] Ansi: however u can't claim that there are no errors at all
[22:10:35] lizabeth: ansi u are right
[22:10:35] Ansi: see this small difference
[22:10:42] Ansi: it simply means that YOU didn't find it
[22:10:56] Ansi: {lizabeth} i hope i am , iti s from lsbf
[22:10:58] Ansi: p. 13
[22:11:10] faizmalik: it is negitive assuranc
[22:11:11] lizabeth: its clearer
[22:11:12] Ansi: so that is a negative assurance
[22:11:18] Ansi: i had a good example of what they write in report
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:11:20] lizabeth: ok
[22:11:21] Ansi: but just can't fid it
[22:11:46] Ansi: ah
[22:11:47] Ansi: found
[22:11:49] Ansi: OT slides
[22:11:49] lizabeth: "nothing has come to my attention "...some thing in those words
[22:11:55] Ansi: slide 12
[22:11:57] faizmalik: {Ansi} also negatibe
[22:12:05] Ansi: Postive form
[22:12:10] faizmalik: not
[22:12:27] Ansi: "In our opinion internaal control is effective in all material respects based on XYZ criteria"
[22:12:28] faizmalik: becase has negative sense
[22:13:26] Ansi: Negative form : based on our work described in this report nothing has come on our attention that
causes us t o believe taht internal control is not effective, in all material respects , based on XYZ criteria
[22:13:45] lizabeth: ok
[22:13:46] Ansi: positive one ..as u analyze in details is a reasonable assurance engagement
[22:13:56] Ansi: as it gives reasonalbe level of assurance
[22:14:00] Ansi: and negative is limited
[22:14:01] Ansi: uf
[22:14:05] Ansi: hope u got it :)
[22:14:14] Ansi: sorry was talking too much
[22:14:15] lizabeth: yep
[22:14:18] Ansi: :D now it's your turn
[22:14:28] Ansi: returning to audit and review
[22:14:28] asb006: what is XYZ criteria?
[22:14:31] Ansi: just to be clear
[22:14:42] lizabeth: xyz...is just an example
[22:14:49] Ansi: yes
[22:14:58] Ansi: but here u need to understand what is meant by cretia
[22:15:01] Ansi: criteria
[22:15:11] Ansi: do u know ? :)
[22:15:12] asb006: ?
[22:15:16] lizabeth: conditions?
[22:15:27] Ansi: well
[22:15:34] Ansi: we will return to it during assurance engagements
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:15:42] Ansi: otherwise too many questions will arise immediately
[22:15:44] asb006: ok
[22:15:45] Ansi: just in some minutes
[22:15:49] Ansi: so again
[22:15:52] Ansi: audit and review
[22:15:57] Ansi: simple and brief answer
[22:16:00] Ansi: about dfiference
[22:16:03] Ansi: anyone?
[22:16:08] Ansi: fish?!
[22:16:20] littlestart: yes i was disconnected
[22:16:26] Ansi: well, welcome back
[22:16:50] Ansi: {littlestart} actually i meant that i want u to answer
[22:16:51] lizabeth: difference= legal/nonlegal req
[22:17:00] Ansi: yea
[22:17:00] lizabeth: ooops
[22:17:09] Ansi: this as well
[22:17:10] Ansi: soemhow
[22:17:21] Ansi: review is voluntary
[22:17:26] Ansi: voluntary investigation
[22:17:35] lizabeth: difference= negative/positive assur
[22:17:40] Ansi: yeap
[22:17:46] lizabeth: correct?
[22:17:50] Ansi: yes
[22:17:56] lizabeth: k
[22:17:58] Ansi: review provides moderate level of assurance
[22:18:01] saline: hello what are we discussing :?
[22:18:02] Ansi: audit provides reasonalbe one
[22:18:15] Ansi: {saline} basic concepts of audit and assurance
[22:18:25] saline: hmm :) good
[22:18:43] Ansi: so here u can say
[22:18:48] Ansi: some things like
[22:18:49] lizabeth: moderate and reasonable..got it
[22:18:51] Ansi: audit is more costy
[22:18:55] Ansi: more time consumming
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:18:56] Ansi: etc
[22:19:20] Ansi: pity that faizmalik left
[22:19:33] lizabeth: while review is...cheaper?
[22:19:50] Ansi: during review you get access to less information
[22:20:00] Ansi: so obviously it's cheaper and takes less time
[22:20:00] lizabeth: kk
[22:20:56] Ansi: okay
[22:20:59] Ansi: now
[22:21:13] lizabeth: {cuteleo110} i dont understand...
[22:21:20] Ansi: now
[22:21:51] Ansi: do you know what is the agency theory
[22:22:18] saline: its the conflict between manager and shareholder
[22:22:24] lizabeth: agency theory?
[22:22:39] Ansi: conflict ...well conflict is just one of the problem
[22:22:39] lizabeth: {saline} sure?
[22:22:46] Ansi: it doesn't reflect this theory in full
[22:22:51] saline: it arises because manager are involved in day to day operations while the shareholders are not
involved in it
[22:23:06] Ansi: thank u
[22:23:18] Ansi: and what about AGENCY theory
[22:23:24] Ansi: what are the 2 types of agents here
[22:23:26] lizabeth: ok...clash in interests
[22:23:35] lizabeth: i get it
[22:23:38] saline: so most of the timese direcotrs wants to persude their own benefits rather than the the benefit of
organisation or shareholder
[22:23:56] Ansi: {saline} u must be close to affiliate i guess :)
[22:24:08] saline: 2 types of agent :?
[22:24:20] Ansi: well okay
[22:24:33] Ansi: your syllabus asks to describe development of audit
[22:24:40] Ansi: so think why it was developed and how
[22:24:46] Ansi: you have a company
[22:24:53] Ansi: on the top of it shareholders
[22:24:57] Ansi: who don't have time to manage it
[22:25:09] Ansi: so the delegate some of their duties to whom?
[22:25:19] lizabeth: managers
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:25:26] Ansi: yea, managers and directors
[22:25:26] lizabeth: and directors
[22:25:30] Ansi: yea
[22:25:42] Ansi: those directors play stewardship role
[22:25:44] Ansi: what does it mean?
[22:25:56] lizabeth: taking care of some one elses stuuf
[22:26:02] lizabeth: stuff*
[22:26:08] Ansi: yes
[22:26:11] lizabeth: accountability
[22:26:15] Ansi: here this stuff is affairs of company
[22:26:21] Ansi: which is the stuff of shareholders
[22:26:24] Ansi: i likethis word :D
[22:26:30] Ansi: assets etc
[22:26:36] lizabeth: yeah
[22:26:46] lizabeth: lol
[22:26:46] Ansi: now
[22:26:48] Ansi: think of it
[22:26:54] Ansi: there is a company
[22:26:59] Ansi: there is a principal
[22:27:04] Ansi: those aer shareholders
[22:27:12] Ansi: and there are other related parties
[22:27:23] Ansi: but shareholders don't do their work themeselfs
[22:27:25] lizabeth: k..
[22:27:28] Ansi: they delated it to directors
[22:27:33] lizabeth: yes...
[22:27:35] Ansi: so directors are agents
[22:27:43] lizabeth: aha
[22:27:51] Ansi: that's 1st type of agents here
[22:28:03] Ansi: now guess what is the second
[22:28:15] asb006: auditor
[22:28:16] lizabeth: shareholder?
[22:28:20] Ansi: right asb!
[22:28:25] Ansi: good to see anyone else speaking
[22:28:25] lizabeth: ok
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:28:35] Ansi: and bad to see fish silent!
[22:28:50] Ansi: it's auditor liz
[22:28:52] asb006: am awake
[22:28:53] Ansi: asb explain why
[22:29:01] Ansi: {asb006} you yes, but littlestart
[22:29:22] asb006: they are independent and work on behalf of director
[22:29:28] littlestart: yes i am here
[22:29:37] asb006: present their report to shareholder for approval
[22:29:51] asb006: am I right
[22:30:04] Ansi: well actually
[22:30:08] Ansi: yes you are
[22:30:12] Ansi: just some small nuance
[22:30:15] Ansi: according to lsbf
[22:30:26] Ansi: auditors are deemed to be appointd by shareholders
[22:30:32] Ansi: i mean those are agents of shareholders
[22:30:32] lizabeth: k..
[22:30:38] Ansi: though in relaity of course those are directors
[22:30:41] asb006: oh!
[22:30:45] Ansi: that searh for them and appoint them
[22:31:04] Ansi: why this second agent is needed
[22:31:09] Ansi: u said it before
[22:31:25] Ansi: because ...directors might compose reports in such a way that is beneficial for them
[22:31:30] Ansi: so they shoudl be checked
[22:31:38] lizabeth: ok
[22:31:41] littlestart: yes
[22:31:46] Ansi: we mentioned two concepts
[22:31:51] Ansi: stewardship and agency
[22:31:55] Ansi: what about accountability
[22:31:55] lizabeth: yep
[22:32:01] Ansi: what is that one
[22:32:12] lizabeth: held responsible?
[22:32:20] lizabeth: answerable?
[22:32:53] Ansi: yes
[22:32:59] asb006: so they prepare financial statements
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:33:02] Ansi: but it's has a certain form
[22:33:06] Ansi: yes asb!
[22:33:08] Ansi: FS or reports
[22:33:22] Ansi: that's how they show their accountability
[22:33:41] Ansi: so they prepare FS for the approval of shareholders
[22:33:46] lizabeth: ok
[22:33:47] Ansi: shareholders cant' just trust directors
[22:33:52] Ansi: so they appoint auditors
[22:33:54] Ansi: those check it
[22:33:56] Ansi: give opinion
[22:33:59] Ansi: if everything is ok
[22:34:01] Ansi: then fine
[22:34:03] Ansi: they are approved
[22:34:04] lizabeth: aha
[22:34:07] asb006: correct
[22:34:08] Ansi: well that's ideally
[22:34:13] Ansi: let's move on
[22:34:22] littlestart: ok
[22:34:29] Ansi: faizmalik , nice to see u back
[22:35:09] Ansi: we are saying that audit
[22:35:14] Ansi: provides reasonable assurance
[22:35:19] Ansi: why only reasonable
[22:35:23] Ansi: why not absolute
[22:35:27] Ansi: or ..however u call it
[22:35:29] Ansi: when tis' 100%
[22:35:39] saline: beacuse it involves judgement
[22:35:51] Ansi: yes of course
[22:35:51] saline: which can be varied from auditor to auditor
[22:35:57] Ansi: and judgement is subjective
[22:36:00] Ansi: yea
[22:36:04] saline: and secondly audit is on test basis
[22:36:16] lizabeth: judgment is subjective...noted.
[22:36:28] Ansi: {saline} oh perfect
[22:36:29] lizabeth: {saline} exactly
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:36:32] Ansi: what does it mean this test basis
[22:36:34] saline: {lizabeth} that is you don't select all of the transaction just samples :)
[22:36:44] Ansi: awesome
[22:36:45] Ansi: thanks :)
[22:37:01] saline: means I can select any of the transtions form the 100% available
[22:37:07] saline: not all it would be hectic
[22:37:09] Ansi: yea
[22:37:10] saline: wastage of time
[22:37:17] saline: costly
[22:37:20] Ansi: well it would be really intersting if they wanted to check all
[22:37:29] Ansi: like imagine fS for 12 months
[22:37:30] Ansi: and
[22:37:35] Ansi: alllllllllllllllllll the documentation
[22:37:39] Ansi: based on whih they are done
[22:37:41] saline: :d
[22:37:44] Ansi: imagine those shelves
[22:37:44] lizabeth: for a big company too
[22:37:44] Ansi: :D
[22:37:56] lizabeth: impossible
[22:38:04] Ansi: u know we always watch with smile how auditors come , take all the documents from shelves
[22:38:08] Ansi: in several turns
[22:38:10] Ansi: :D
[22:38:15] Ansi: it would take them a year to read all that
[22:38:29] Ansi: so test basis
[22:38:37] lizabeth: lmao
[22:38:44] Ansi: there is a thing called expectations gap
[22:38:47] Ansi: just in case ..what is that
[22:38:59] lizabeth: epectation gap mis
[22:39:11] saline: lmao
[22:39:14] saline: whats this
[22:39:15] saline: ?
[22:39:17] saline: means
[22:39:25] saline: "IMAO"
[22:39:28] lizabeth: is wats our responsiblity and wat the public view as our resp
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:39:37] lizabeth: does that make sense?
[22:39:39] Ansi: {saline} ? it's something about laughing :)
[22:39:50] Ansi: if u want i could say :)
[22:39:58] Ansi: but i guess we better discuss audit
[22:40:28] Ansi: {lizabeth} it makes
[22:40:34] Ansi: but u can rather say
[22:40:44] Ansi: well yea u can say this way
[22:40:53] lizabeth: kk..
[22:40:55] Ansi: difference between what role you play
[22:41:02] Ansi: and what parties expect from
[22:41:02] Ansi: u
[22:41:13] lizabeth: good way u put it
[22:41:21] Ansi: like some people might think that auditors check 100% of transactions
[22:41:31] Ansi: or
[22:41:40] Ansi: that auditors are responsible to prepare FS
[22:41:54] lizabeth: yeah
[22:41:58] Ansi: or that they are required to detect fraud
[22:42:08] Ansi: btw
[22:42:10] lizabeth: lol....magician
[22:42:13] Ansi: explain the last one
[22:42:21] Ansi: instead of detecting fraud
[22:42:23] Ansi: what auditors do
[22:42:34] asb006: make suggestions
[22:42:40] pearly2: Who says auditors prepare F/S?
[22:42:53] lizabeth: {asb006} i dont think so
[22:42:54] asb006: on how they improve their performance
[22:42:58] saline: auditor has to be professionally skeptic
[22:43:04] saline: druing audit
[22:43:22] Ansi: {pearly2} we are talking about common missundertanding of auditor's role
[22:43:29] pearly2: ok
[22:43:49] Ansi: {saline} yes
[22:43:52] Ansi: very nie one btw
[22:43:59] Ansi: what does i mean professionally skeptic
[22:44:01] lizabeth: {pearly2} no,u shld read other posts b4 that
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:44:07] Ansi: {asb006} yes
[22:44:23] asb006: good
[22:44:24] lizabeth: so wats the answer?
[22:44:58] Ansi: the answer is that auditor's role is to give opinion that the FS are fre from material misstatement
[22:45:10] saline: is an attitude and approach that includes a questioning mind, careful thought, and critical assessment
of all information.
[22:45:22] lizabeth: okk
[22:45:26] lizabeth: i get it
[22:45:26] Ansi: {saline} yes!
[22:45:27] Ansi: great
[22:45:31] Ansi: {lizabeth} :)
[22:45:40] saline: means neither u consider the client as honest nor dishonest
[22:45:56] lizabeth: ie,keeping an open mind right?
[22:45:59] Ansi: yea
[22:46:03] Ansi: it's quite nice u know
[22:46:04] Ansi: diplomatic
[22:46:08] lizabeth: kk
[22:46:09] asb006: one question - if I do not use bookish language, will my mark be less
[22:46:10] Ansi: like ...i just say my opinion
[22:46:13] Ansi: nothing personal :D
[22:46:14] Ansi: lol
[22:46:25] lizabeth: yeah..
[22:46:29] Ansi: {asb006} it depends
[22:46:48] asb006: I can't remember those words
[22:46:50] Ansi: if u write in your answer : yo man, well i think aaa emm in audit u wanna ..well em
[22:46:55] Ansi: then u might not score high
[22:46:59] Ansi: but if u explain in plain english
[22:47:03] Ansi: understandable one
[22:47:04] lizabeth: lolzzz
[22:47:08] Ansi: u will get credit
[22:47:17] Ansi: examiner mentions in her article
[22:47:28] asb006: relieved
[22:47:28] Ansi: that she doesn't expect that candidates know ISA's byheart
[22:47:39] Ansi: but that they are able to interpret them
[22:47:42] Ansi: in their words
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:47:46] Ansi: but however
[22:47:51] Ansi: u need to remember some key terms
[22:48:02] Ansi: and beleive me , you will remember them
[22:48:03] Ansi: :)
[22:48:07] Ansi: cos they will be repeated
[22:48:12] lizabeth: kk
[22:48:13] asb006: like accoutability
[22:48:16] Ansi: and once u will want to open dictionary and see what is that
[22:48:17] Ansi: :D
[22:49:22] Ansi: okay, why everyone is silent :)
[22:49:27] Ansi: let's continue, it's getting late
[22:49:28] lizabeth: lol
[22:49:31] lizabeth: yeah
[22:49:32] saline: :)
[22:49:36] lizabeth: its very late here
[22:49:39] asb006: waiting for your command
[22:49:42] lizabeth: my gmt
[22:49:43] Ansi: haha :D:D
[22:49:49] Ansi: i feel myself a teacher lol
[22:49:55] Ansi: oh my ...
[22:50:00] lizabeth: when are we gonna finish today?
[22:50:06] Ansi: it's bad when you don't know it all too well
[22:50:06] lizabeth: and the nex class?
[22:50:13] Ansi: next one is next thursday
[22:50:16] Ansi: okay
[22:50:21] lizabeth: same time?
[22:50:25] Ansi: give me five elements of assurance engagement
[22:50:28] Ansi: yes liz
[22:50:32] Ansi: and we will explain each of them
[22:50:56] asb006: practitioner
[22:50:56] Ansi: they are well explained in OT slides btw
[22:50:57] lizabeth: 5 lements
[22:51:02] Ansi: {asb006} nah
[22:51:02] asb006: intended user
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:51:04] Ansi: elements
[22:51:07] Ansi: asb! :)
[22:51:09] lizabeth: as in...code of ethics?
[22:51:09] saline: its really my test as well
[22:51:16] saline: :8)
[22:51:23] saline: :o
[22:51:26] Ansi: {lizabeth} not really
[22:51:30] lizabeth: lol
[22:51:32] lizabeth: ok
[22:51:37] Ansi: asb
[22:51:38] saline: ansi
[22:51:40] Ansi: you were close
[22:51:42] Ansi: :)
[22:51:47] saline: tell the first one
[22:51:49] Ansi: just u should say taht those are elements of what
[22:51:50] saline: ;)
[22:51:56] asb006: auditor
[22:51:57] Ansi: saline well
[22:52:01] saline: then rest I will try
[22:52:04] Ansi: it's what poor asb is trying to say
[22:52:06] Ansi: and i don't let him
[22:52:07] Ansi: :)
[22:52:10] asb006: director
[22:52:14] Ansi: 3 party relationship
[22:52:15] asb006: shareholder
[22:52:20] Ansi: that is first element
[22:52:25] Ansi: just what asb said
[22:52:31] lizabeth: wats the Q again?
[22:52:32] Ansi: practicioner
[22:52:34] lizabeth: sorry...
[22:52:38] Ansi: , responsible party
[22:52:43] Ansi: and intended users
[22:52:53] Ansi: quetion is about elements of assurance engagmeent
[22:52:56] Ansi: now asb
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:52:59] asb006: ?
[22:53:02] Ansi: explain each of those 3 parties
[22:53:09] Ansi: i know u said already
[22:53:12] Ansi: but i interrupted
[22:53:14] Ansi: sorry
[22:53:26] Ansi: practicioner
[22:53:27] Ansi: who is that
[22:53:43] asb006: the reviewer of th einfo
[22:53:48] lizabeth: auditor?
[22:53:49] Ansi: ues
[22:53:51] Ansi: right liz!
[22:53:53] asb006: who is expert
[22:54:01] Ansi: auditor as example
[22:54:19] Ansi: he is reviewing information and is responsible for what
[22:54:20] lizabeth: okk
[22:54:31] asb006: making opinion
[22:54:42] lizabeth: providing asurance?
[22:54:42] asb006: what went wrong if there was any
[22:54:55] Ansi: yea , to analyze their nature , timing , extent of procedures
[22:54:59] Ansi: and give opinion
[22:55:10] Ansi: he must estimate whether material modification should be made
[22:55:15] lizabeth: give opinion..got it
[22:55:26] Ansi: please don't get confused practicioner is not only an auditor
[22:55:33] Ansi: just i don't know other examples for the moment
[22:55:36] Ansi: if anyone knows that they it
[22:55:48] asb006: there is an example in Kaplan
[22:55:52] lizabeth: ok...practitioner isnt auditor
[22:56:06] Ansi: in anyone it's the one who reviwe information in that 3 party relationship
[22:56:34] asb006: but I can't copy and paste this here
[22:56:42] Ansi: ah yea
[22:56:46] Ansi: it's a long one
[22:56:58] Ansi: after mntioning 2 other parties, i might copy part of it
[22:57:02] asb006: very helpful
[22:57:10] Ansi: 2nd - responsible party
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[22:57:13] Ansi: who is that
[22:57:21] lizabeth: director
[22:57:27] lizabeth: management?
[22:57:37] lizabeth: sorry manager
[22:57:48] saline: can u summarise what are the 3 parties
[22:57:51] saline: involved
[22:57:52] saline: ?
[22:58:11] asb006: auditor/expert/shareholder/director
[22:58:13] Ansi: asb could
[22:58:18] Ansi: yea
[22:58:28] asb006: auditor or anyone who is an expert on subject matter
[22:58:33] Ansi: responsible party is the one who is responsible for information
[22:58:46] asb006: director
[22:58:49] asb006: ?
[22:58:55] Ansi: or the one who prepares it
[22:58:55] Ansi: yes
[22:58:56] lizabeth: cld be
[22:58:59] Ansi: can be a director
[22:59:08] Ansi: and finally intented users
[22:59:13] lizabeth: sh
[22:59:18] lizabeth: share holders
[22:59:23] Ansi: uhum
[22:59:24] asb006: shareholder anyone who wish to invest
[22:59:31] Ansi: the perfson for whom practicioner actaully work
[22:59:35] Ansi: and provides his opinion
[22:59:36] lizabeth: so the 3 are?>
[22:59:37] Ansi: yea
[22:59:48] Ansi: Practicioner - the one who check
[22:59:55] lizabeth: ok
[22:59:56] Ansi: Responsible party - the one whom u check
[23:00:02] lizabeth: ok
[23:00:05] Ansi: Intented users - the one for whom u check
[23:00:08] Ansi: sensible ? :)
[23:00:11] lizabeth: good...
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:00:19] Ansi: yea i know :8
[23:00:23] Ansi: :8)
[23:00:26] Ansi: just invented it
[23:00:27] Ansi: :D
[23:00:35] lizabeth: :)
[23:00:39] asb006: In a company, 1. Auditor 2. director 3, shareholder
[23:00:43] Ansi: yea
[23:00:54] Ansi: as for example from kaplan
[23:00:58] lizabeth: so is that al for today?
[23:01:00] Ansi: they are talking about purchse of house
[23:01:07] Ansi: well not really liz
[23:01:09] Ansi: there are much to do
[23:01:15] Ansi: and with such speed we will never finish
[23:01:16] lizabeth: kk
[23:01:16] Ansi: :)
[23:01:20] Ansi: but it's my fault ..anyway
[23:01:29] Ansi: it was a test session ..i got used to make them a bit too detailed
[23:01:30] lizabeth: hw?
[23:01:37] Ansi: will try to be more to the point next time
[23:01:38] Ansi: :)
[23:01:39] lizabeth: ow
[23:01:46] Ansi: okay
[23:01:47] lizabeth: kk
[23:01:52] Ansi: what is the second element
[23:02:06] Ansi: i guess y ou already forgot what we were discussing :D
[23:02:12] Ansi: asb
[23:02:12] littlestart: the subject matter under scrutiny;
[23:02:14] Ansi: i know u know
[23:02:17] Ansi: wow fish :D
[23:02:20] Ansi: good morning
[23:02:28] littlestart: yes just wake up
[23:02:34] Ansi: yes, an ppropriate subject matter
[23:02:44] Ansi: examples on the table!
[23:02:49] lizabeth: 2nd element
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:02:57] Ansi: anyone
[23:02:59] Ansi: saline?!
[23:03:00] Ansi: as
[23:03:01] Ansi: b
[23:03:05] rollee123: financial sgtatement
[23:03:08] Ansi: yea
[23:03:15] Ansi: ups no :D
[23:03:16] rollee123: or any other financial report to be examined :D
[23:03:19] Ansi: rather financial performnce
[23:03:20] rollee123: :D
[23:03:21] rollee123: ehehe
[23:03:31] Ansi: any other examples
[23:03:48] asb006: I was reading kaplan...sorry
[23:03:48] rollee123: on which auditors opinion to be based
[23:03:56] asb006: yup
[23:04:00] Ansi: {asb006} good to read it sometimes :) it's a nice book
[23:04:05] Ansi: perfect to read before sleeping
[23:04:10] Ansi: a deepest sleep guranteed
[23:04:14] Ansi: ;)
[23:04:18] lizabeth: lol
[23:04:21] Ansi: well bpp is better for this role actaully
[23:04:24] Ansi: bu still
[23:04:29] asb006: positive or negative??
[23:04:37] Ansi: em...positive
[23:04:42] Ansi: why u mention it now
[23:04:49] Ansi: ah rolee
[23:05:08] Ansi: guys i was asking about examples of subject metter
[23:05:11] Ansi: matter
[23:05:16] Ansi: which is under scrunity
[23:05:21] Ansi: financila performance that is number one
[23:05:23] Ansi: anything else
[23:05:40] lizabeth: i cant think of any
[23:05:44] Ansi: well
[23:05:48] Ansi: if u have finncial performance
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:05:52] Ansi: then think of non financial one
[23:06:04] lizabeth: oww yes..
[23:06:04] Ansi: at least key indicators of efficiency and effectiveness
[23:06:06] asb006: overall assessment of data
[23:06:15] Ansi: asb
[23:06:18] Ansi: excessive :D
[23:06:19] asb006: qualititive and quantitive
[23:06:33] Ansi: okay , other examples from OT
[23:06:36] lizabeth: VFM
[23:06:50] Ansi: systems and processes .e.g entity's internal control or IT system
[23:07:00] lizabeth: hmmm
[23:07:06] Ansi: because mostly we use computer based systems now :D
[23:07:13] lizabeth: yep
[23:07:26] Ansi: behaviour e.g. corporate governance , complience with regulation
[23:07:50] Ansi: we have someone in the room who finished acca by age of 18 :)
[23:07:53] Ansi: so u can clap etc :D
[23:07:58] saline: wowwwwwwwwww
[23:08:00] saline: :)
[23:08:04] saline: whos is the one
[23:08:10] saline: can u please tell
[23:08:17] Ansi: well , hope he won't kill me
[23:08:22] saline: no noo
[23:08:24] rollee123: wowwwww ?
[23:08:24] Ansi: sn0b01
[23:08:26] saline: he won't
[23:08:31] saline: :D
[23:08:33] rollee123: reallyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy ?
[23:08:37] saline: SNOB really??????????
[23:08:40] lizabeth: hmm
[23:08:41] rollee123: snobbbbbbbbbbb
[23:08:43] saline: larkey ...........................
[23:08:44] lizabeth: nice:)
[23:08:52] rollee123: chupay rustum :D
[23:09:05] saline: :?
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:09:09] asb006: sn0
[23:09:19] rollee123: sharmaying?:D
[23:09:27] saline: snob.........
[23:09:33] saline: he is away
[23:09:40] saline: or donot want to response
[23:09:41] Ansi: he is really a legend , but well ..let's atleast finish it by age of 30 :D
[23:09:43] saline: I think so
[23:09:47] Ansi: he is shy
[23:09:59] lizabeth: hehe
[23:10:11] Ansi: oaky
[23:10:12] taimurshahzad: hi all
[23:10:16] Ansi: i think we will never finish elements :D
[23:10:22] lizabeth: {taimurshahzad} hi
[23:10:23] Ansi: {taimurshahzad} hi :)
[23:10:35] taimurshahzad: how u all doin?
[23:10:43] Ansi: doing amazing after 2 horus of session
[23:10:49] lizabeth: wow
[23:10:54] Ansi: okay
[23:10:54] taimurshahzad: lol
[23:11:00] Ansi: we say appropriate subject matter
[23:11:08] Ansi: how u distinguish appropriate
[23:11:33] lizabeth: :no:
[23:11:42] Ansi: :yes:
[23:11:52] lizabeth: i dont knw..lol
[23:11:53] Ansi: :no: :yes:
[23:11:59] Ansi: i know u don't know :)
[23:12:04] Ansi: it must be
[23:12:09] Ansi: 1. identifiable
[23:12:18] Ansi: and possible to evaluate
[23:12:28] Ansi: or mesusure against certain criteria
[23:12:31] Ansi: and
[23:12:57] Ansi: 2. it can be subjected to procedutres for gathering sufficient appropriate evidence
[23:12:57] Ansi: so
[23:13:00] Ansi: in other words
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:13:17] Ansi: it must be something that u can ..analyze or measure or distinguish from all other stuff
[23:13:30] Ansi: and it must be enough to make your opinion
[23:13:51] lizabeth: kk
[23:13:53] Ansi: now criteria
[23:13:59] Ansi: i told u wwe will erturn to it
[23:14:03] Ansi: what is a criteria
[23:14:12] Ansi: a benchmark!
[23:14:17] saline: its the benchmark which is considered
[23:14:18] lizabeth: ok
[23:14:19] saline: yes
[23:14:26] Ansi: u use it to evaluate or measure the subject matter
[23:14:28] Ansi: yes saline
[23:14:29] Ansi: :)
[23:14:31] saline: or it would be termed as a level
[23:14:45] Ansi: yea
[23:14:49] Ansi: good that u opened slides
[23:14:54] Ansi: so examples?
[23:15:00] saline: of errors taht could be permitted without materially affecting the financial statement
[23:15:29] saline: do u people have account of email on accagloabal.com
[23:15:31] saline: ?
[23:15:37] lizabeth: eg of criteria?
[23:15:48] Ansi: yes
[23:15:55] Ansi: {saline} i don't ..
[23:16:02] Ansi: examples are
[23:16:04] Ansi: FS
[23:16:09] Ansi: Internal control
[23:16:13] Ansi: it's framework
[23:16:17] Ansi: Copliance
[23:16:23] Ansi: applicable alw or regulation
[23:16:40] Ansi: so it's something that u use to evaluate that subject matter
[23:16:41] lizabeth: wats copliance?
[23:16:43] Ansi: on which u bse
[23:17:11] Ansi: compliance is ...mm ...something that satisfies requirements
[23:17:12] Ansi: like
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:17:18] Ansi: this is done in compliance with law
[23:17:20] Ansi: that means
[23:17:24] saline: well I suggest to remember two things one is INTERNAL control and another one is substantive
procedure which are use to determine the criteria
[23:17:25] Ansi: under provisions of law
[23:17:26] lizabeth: oh ok...compliance
[23:18:00] Ansi: em ...yea...those are a must to remember
[23:18:06] Ansi: Criteria was a 3rd element btw
[23:18:14] saline: Internal control includes all the emelents such as compliance, risk assessment procedure, applciable
laws and regulations
[23:18:15] Ansi: give it a try to mention other two
[23:18:17] lizabeth: {saline} substantive proce goes along wit test ofcontrols
[23:18:24] Ansi: what else is insdie assurance engagmenet
[23:18:30] Ansi: we mentioned parties and subject matter
[23:18:34] lizabeth: which is a form of internal control...
[23:18:35] Ansi: and criteria for that subject matter
[23:18:56] saline: hmm assurance engagements is mostly done in interim audit
[23:19:01] Ansi: good to see that you all already know about internal control
[23:19:04] Ansi: i don't yet :)
[23:19:12] saline: which is not full accounting
[23:19:30] lizabeth: saline ur pace is a bit fast..:)
[23:19:32] Ansi: okay
[23:19:36] taimurshahzad: evidence n assurance report
[23:19:46] Ansi: thanks taimur
[23:19:48] Ansi: right!
[23:19:56] Ansi: 4th one is evidence
[23:20:03] Ansi: sufficient appropriate evidence
[23:20:16] Ansi: what is that one btw
[23:20:45] Ansi: engagement should be performed with ... ?
[23:20:47] lizabeth: back up documents used during audit
[23:20:48] abdulwahid72: {Ansi} ?
[23:20:55] Ansi: not just a bride and a groom :D
[23:20:58] Ansi: something else as well :D
[23:21:22] taimurshahzad: u mean the 3 parties?
[23:21:37] lizabeth: wat???
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:21:59] Ansi: what are you al talkinga bout
[23:22:10] Ansi: well i made a joke
[23:22:13] Ansi: anyway
[23:22:15] taimurshahzad: lol
[23:22:23] Ansi: evidence ... involves
[23:22:37] Ansi: prfessional skepticism that we mentined above
[23:23:01] Ansi: yes of curse it's based on documents liz
[23:23:17] Ansi: the indicator of it's sufficiency is simly quantity
[23:23:32] Ansi: and the indicator of appropriatness?
[23:23:33] lizabeth: kk
[23:23:37] Ansi: as it should be appropriate
[23:24:01] Ansi: quality
[23:24:30] adilqureshi: relevance and reliability
[23:24:44] Ansi: yes
[23:24:54] Ansi: that is returning to suitable criteria
[23:25:08] Ansi: a criteria should pocess which qualities to be suitable
[23:25:45] Ansi: everyone got bored? :(
[23:25:55] Ansi: asb, fish, saline , liz
[23:26:22] lizabeth: yes
[23:26:26] asb006: could not finish those ....so can't participate
[23:26:32] Ansi: i see
[23:26:33] saline: {Ansi} I amdoing some work simultaneously
[23:26:33] asb006: am still here
[23:26:43] Ansi: well remember parts of IASB's framework from f7
[23:26:44] saline: no you are leading it actively ver y good
[23:26:48] saline: :star:
[23:26:49] Ansi: those terms could help u here
[23:27:08] Ansi: thank you saline .. ..
[23:27:14] Ansi: relevance
[23:27:17] Ansi: completeness
[23:27:19] Ansi: realiability
[23:27:22] Ansi: neutrality
[23:27:26] Ansi: understandability
[23:27:38] Ansi: we could explain each ofthose ..but i hope so much that you aalready understand them
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:27:41] lizabeth: hmmm
[23:27:54] lizabeth: yes
[23:28:02] Ansi: tired. .to kick people already
[23:28:09] lizabeth: lol
[23:28:10] Ansi: why everyone wants to chit chat so much i wonder :)
[23:28:16] Ansi: okay
[23:28:20] Ansi: that was 4th element
[23:28:22] Ansi: what i a final one
[23:28:35] lizabeth: sorry
[23:28:36] Ansi: result of yuor work
[23:28:38] lizabeth: ?
[23:28:41] adilqureshi: plx explain relevance
[23:28:49] taimurshahzad: da report
[23:29:11] Ansi: relevance is when it is dierctly related to it ..here u have the concept of materiality as well
[23:29:34] lizabeth: yes..i get that
[23:29:43] Ansi: when this criteria plays a role for decision making
[23:29:51] lizabeth: how abt neutrality...
[23:29:53] Ansi: by intrtnal users
[23:30:00] lizabeth: cant seem to fig]?
[23:30:02] Ansi: immaterial things don't affect decision making
[23:30:05] adilqureshi: while test of control wat is relevant for us
[23:30:09] adilqureshi: ?
[23:30:28] Ansi: i didn't study that yet :)
[23:30:33] Ansi: maybe saline can answer
[23:30:38] lizabeth: {adilqureshi} we are not there yet
[23:30:46] adilqureshi: sorry
[23:30:56] adilqureshi: actually i got prob
[23:30:58] saline: {adilqureshi} what dude?
[23:31:06] saline: what u are stuck into
[23:31:12] Ansi: oh my god
[23:31:13] Ansi: :D
[23:31:16] saline: can me and cuteleo try
[23:31:19] saline: :?
[23:31:20] Ansi: that looks like a start of big discussion
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:31:25] Ansi: guys please pm each other
[23:31:25] Ansi: :D
[23:31:26] saline: {Ansi} u carry on
[23:31:28] saline: sure
[23:31:30] Ansi: cos i want to finish one day :D
[23:31:35] adilqureshi: while test of control wat is relevant for us
[23:31:45] adilqureshi: i want expalin
[23:31:46] lizabeth: ansi...wat do we have left for today?
[23:31:47] Ansi: neutrality is from it's free from immaterial errors and bias
[23:31:54] lizabeth: okk
[23:31:58] Ansi: {lizabeth} some minor porints
[23:32:00] Ansi: we are almost done
[23:32:07] lizabeth: kk
[23:32:12] Ansi: final element is report
[23:32:25] Ansi: written assurance report
[23:32:32] lizabeth: report...yes
[23:32:33] Ansi: in the appropriate form
[23:32:42] lizabeth: aha
[23:33:01] lizabeth: do u have to follow a format for this
[23:33:02] Ansi: and about forms
[23:33:06] Ansi: we already discussed
[23:33:11] Ansi: positive and negative
[23:33:16] Ansi: well
[23:33:19] Ansi: we will study report
[23:33:24] lizabeth: k
[23:33:25] Ansi: almost at end of course
[23:33:26] Ansi: so
[23:33:29] Ansi: we will figure out
[23:33:30] Ansi: :)
[23:33:31] lizabeth: negative
[23:33:35] lizabeth: ?
[23:33:40] Ansi: negative?
[23:33:47] lizabeth: positve?
[23:33:49] Ansi: :D
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:33:50] Ansi: both
[23:33:54] lizabeth: lol
[23:34:02] Ansi: okay
[23:34:08] Ansi: we didn't mention one important thing
[23:34:19] lizabeth: which is?
[23:34:28] Ansi: concept of true and fair presentation
[23:34:41] lizabeth: kk
[23:34:48] Ansi: so tell me about it :P
[23:34:50] hassanmalik: true is
[23:34:52] Ansi: what does it mean
[23:35:06] lizabeth: true and fair...freefrm mat miastatement
[23:35:15] lizabeth: and not bias
[23:35:17] lizabeth: correct?
[23:35:23] Ansi: ye that means reasonably accurate
[23:35:25] Ansi: just
[23:35:28] Ansi: always add
[23:35:31] Ansi: free from material
[23:35:34] Ansi: misstatement
[23:35:40] lizabeth: kk
[23:35:55] hassanmalik: true usually taken to be a reference to the resonable accuracy of the numbers
[23:35:57] Ansi: as we said , auditor doesn't say that ..i checked it all , it's all 100% correct bro
[23:36:02] hassanmalik: and fair view is
[23:36:03] Ansi: they say , in our opinion it's true and fair
[23:36:42] lizabeth: accuracy is impossible and unrealistic
[23:36:49] Ansi: {lizabeth} yes
[23:36:52] lizabeth: :accuracy"
[23:37:02] hassanmalik: RESONABLE ACCURACY
[23:37:10] Ansi: {hassanmalik} thank u
[23:37:20] Ansi: so reasonably accurate
[23:37:21] hassanmalik: :-)
[23:37:25] Ansi: prepared iin accordance with laws
[23:37:34] Ansi: free from immaterial bias
[23:37:35] Ansi: and clear
[23:37:38] Ansi: undertandable
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:37:57] Ansi: that's when u can report that FS are true and fair
[23:37:58] hassanmalik: FAIR VIEW IS USUALLY TAKEN TO BE A REFERENCE TO THE CLARITY ABD HONESTY OF
PRESENTATION
[23:38:22] Ansi: {hassanmalik} can u make me a small favour
[23:38:28] Ansi: click on caps lock, just once
[23:38:29] Ansi: :)
[23:38:38] hassanmalik: OK
[23:38:44] Ansi: THANK YOU :D
[23:38:53] hassanmalik: :-)
[23:38:54] Ansi: {hassanmalik} you are right
[23:39:01] Ansi: thank you for clearing the diffference
[23:39:02] Ansi: okay
[23:39:07] Ansi: we are too late already
[23:39:14] Ansi: covered some basic things
[23:39:21] Ansi: will have to work much harder next time
[23:39:21] lizabeth: yep
[23:39:25] hassanmalik: hmm gr8
[23:39:28] lizabeth: i agreee
[23:39:29] Ansi: we didn't cover chapter 2
[23:39:29] hassanmalik: but i need ur help
[23:39:30] Ansi: so
[23:39:32] Ansi: 2,3 4
[23:39:34] lizabeth: lol
[23:39:35] Ansi: are all for next time
[23:39:42] Ansi: {hassanmalik} yea, how can i help u
[23:39:42] lizabeth: sure
[23:39:52] Ansi: well :)
[23:39:54] lizabeth: so thats all for today?
[23:39:56] Ansi: what i can say
[23:40:02] Ansi: thanks for coming and participating
[23:40:02] hassanmalik: what u brothers did today
[23:40:13] Ansi: {hassanmalik} had fun , played chess
[23:40:14] Ansi: :)
[23:40:20] lizabeth: hehe
[23:40:22] hassanmalik: i:-)
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:40:24] Ansi: session is over , everyone is free
[23:40:25] lizabeth: :D
[23:40:33] Ansi: chat log will be uploaded at forum in a while
[23:40:37] hassanmalik: when its start
[23:40:40] lizabeth: Thnx ansi
[23:40:42] Ansi: have a nice week till next session
[23:40:50] Ansi: study hard, practice past paper questions
[23:40:52] hassanmalik: hmm i m new user of this side
[23:40:55] saline: {Ansi} thanks :)
[23:40:55] lizabeth: this is really helpful
[23:40:56] Ansi: related to current topics
[23:40:59] Ansi: and kits
[23:41:04] Ansi: try to get 2011 materials
[23:41:07] Ansi: :)
[23:41:07] saline: which slides u r referring again and again
[23:41:10] lizabeth: kk
[23:41:10] Ansi: i'm happy you liked it liz
[23:41:13] saline: :?
[23:41:16] Ansi: and i hope to see u next time
[23:41:16] lizabeth: bye:)
[23:41:19] lizabeth: sure
[23:41:20] Ansi: OT slides
[23:41:25] Ansi: u can download them from opentuition
[23:41:29] Ansi: in F8 section
[23:41:34] Ansi: where there are notes andvideos
[23:41:38] lizabeth: kk
[23:41:41] hassanmalik: can any one gudie me how this side will be usefull for me
[23:41:55] hassanmalik: i m new
[23:42:00] hassanmalik: :-1
[23:42:14] Ansi: {hassanmalik} hassanmalik
[23:42:21] Ansi: i suggest u to go to F8 forum
[23:42:25] Ansi: open our shedule
[23:42:26] hassanmalik: ok
[23:42:29] Ansi: it's called : sessions
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F8 (Int) – Session 1
14/07/2011 – F8 chat room
[23:42:29] hassanmalik: hmm
[23:42:33] Ansi: F8 session etc
[23:42:36] Ansi: in yellow
[23:42:37] hassanmalik: ok
[23:42:40] Ansi: then
[23:42:43] Ansi: see below it
[23:42:44] Ansi: my post
[23:42:50] Ansi: there are explain many tings
[23:42:51] Ansi: later
[23:42:57] Ansi: when u open OT link that i provide there
[23:43:02] hassanmalik: thats so nice of u
[23:43:04] Ansi: u will see separate OT page for F8
[23:43:10] Ansi: with notes
[23:43:12] Ansi: slides
[23:43:13] Ansi: videos
[23:43:18] Ansi: some videos are based on slides
[23:43:24] hassanmalik: hmm
[23:43:27] Ansi: so they are helpful as additonal material
[23:43:42] hassanmalik: :-)\
[23:43:42] hassanmalik: \
[23:43:51] hassanmalik: thanks
[23:44:24] Ansi: welcome
[23:44:28] hassanmalik: let me check how exactly it works
[23:44:29] Ansi: so see you next time everyone!
[23:44:35] asb006: see you....
[23:44:36] hassanmalik: :-)
[23:44:37] taimurshahzad: cya
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