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CHAT SESSION WITH ACCA F8 TUTOR
How to answer the questions like control objectives and controls; they somehow have a way to answer that
right?
ACCA Tutor: Trouble is that there are many situations. For control objectives you need to think "What could
go wrong?"
Sometimes i just seem to miss simple things but i am trying to keep a more open mind as i do the questions
ACCA Tutor: Things go missing, arithmetic errors, mispostings etc are scenario based
I'm trying to think where I went wrong last time the only problem I could think of was timing, Every time
I've sat the paper I've gone overtime on question one
ACCA Tutor: Well set your watch/time and move on. There are always easy marks elsewhere.
How to use the reading and planning time?
ACCA Tutor: Try concentrating on getting to grips with Q1 Biggest, most information. Remember: Answer the
question. Especially difficult when there are several verbs: identify, describe, I recommend underline those
because marks will be divided over them. Pay attention to the details in the scenario - nothing is there for
decoration. Explain as though you were explaining to a 15 year old person.
Can you explain adjusting events?
ACCA Tutor: Adjusting events give evidence of what existed at BS date. E.g. a pharmaceutical firm discovers on
15 Jan that one of their important drugs has bad side-effects That will affect the valuation of their closing
inventory: that inventory was bad on 31/12, so adjust Non Adjusting - factory burns doen 15/1 Factory was fin
on 431/12, so a non-adjusting event. But disclose in notes
How straightforward to you think Pami's Q1 this time will be? The Q1's seem to have become more wordy
and confusing with time?
ACCA Tutor: I think Pami tries to be fine - no evidence of a warped mind (yet). I think so - on many questions
the scenario is broken down into numbered points. It's a good rule to assume each point raises at least one
issue. Nothing in a question is pointless (usually). The examiner claims to have evidence that answering Q1
first is better. Problem is if you don't you have to leave time to read and understand it and that's not factored
into your time allocations.
Can we answer questions in table form?
ACCA Tutor: Depends on what's asked, but on the multi-verb requirements it's very efficient
We don’t use the word 'weakness' now right? There's a different term is it?
ACCA Tutor: Don't think so. I would still talk about an internal control weakness
I'm trying to work out a way of writing as few words as possible like "Stock may be over or understated if
the perpetual stock counts are not complete or accurate" Could be "Lack of completeness/accuracy in
perpetual stock counts" as a risk in stock systems Sound good?
ACCA Tutor: Well be careful about that. Very short answers can make it hard to award many marks. I suggest
10 marks = at least a page. If a question is broken down into 8, 5, 4, 3 marks (= 20) it doesn’t not matter how
much time you spend on (a) you will never get more than 8 and there are 12 elsewhere
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I heard from my lecturer they change it to deficiency instead of weakness, is it true?
ACCA Tutor: I haven't come across that, but it might be right. I don't think it will make much difference to your
marks.
What’s the difference of audit procedures and control procedures?
ACCA Tutor: A control procedure is what the client does (e.g. authorising overtime); and Audit procedure is
what the auditor does to carry out audit tests.
Control procedure is, like, a foreman controlling what constitutes overtime in a wages system?
ACCA Tutor: Yes - somewhere a control is performed.
TOC is used for control objective and SP is used for controls?
ACCA Tutor: A Test of control must test controls - e.g. segregation of duties, authorisation reconciliations. It
might be to ensure that all orders are authorised to ensure they stay under a credit limit.
A SP does not test controls; it goes directly to the data. It will look at receivables at the end of the year and rey
to assess whether, inspite of ToC there might be valuation issues with receivables. So will look at aged
analyses etc
Is it correct to say that a decision to make a stock counting team one person from the warehouse and one
from the finance staff is a control decision and substantive procedures detect material misstatements?
ACCA Tutor: I think that's right: there might be no controls but that does not mean that there are material
misstatements. ToC should prevent, detect and correct errors. If the controls are not working then material
misstatements can get through to FS and then they are detected by SP.
Do we need to go very deep in Corporate Gov?
ACCA Tutor: I think you should know the reasons why and the importance (or purpose) of non-execs, audit
committees, remuneration committees, and nomination committees.
Is there a low possibility of questions coming out which are the same as the previous sitting?
ACCA Tutor: Well they try to move through the syllabus Low risk of J10 repeating in D10, but the syllabus is
finite and must repeat at some point.
What’s the difference of management letter and letter of weakness?
ACCA Tutor: They are the same.
Management letter and letter of weakness aren’t they the same as Letter of Representation?
ACCA Tutor: No Letter of Representation is from the client to the auditors, saying things like no liabilities left
out, no material irregularities, no plans to close down part of operations, inventory properly valued. Prime
function is to talk about where some things are only in directors' minds e.g. to close down something other
purpose is to concentrate directors' attention on matters, like liabilities.
Does covering all the past papers, Mock 1 or 2 from BPP book and Pilot Paper prepares you up well?
ACCA Tutor: It should do
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When do we qualify audit reports? When do we use emphasis on matter paragraph or other matters?
ACCA Tutor: Correct EoM is not a qualification. When the auditor wishes to draw attention to a key matter in
the FS's. There are two qualifications:
Qualification (unable to obtain sufficient audit evidence)
Qualification (material misstatement)
So when is modification done?
ACCA Tutor: Modification means any change from the simple T&F opinion could be EoM (not a qualification)
or a qualification (something the matter with the accounts/audit) e.g. how provisions are made are the
modified options
The clarity project changed the meaning of the terms “Unable to obtain sufficient evidence” I think it means
what it says, basically! regarding the financial statements
ACCA Tutor: Yes - auditors don't know
I think Material misstatement is when the auditor disagrees about an item in the FSs So, it's about drawing
attention, not having enough evidence, or disagreeing
ACCA Tutor: Yes, but 'disagreement' no longer used
Provisions are usually brought into play in legal cases or the over or understatement of figures. Am I right?
ACCA Tutor: Yet it is used with respect to depreciation and receivables!
Provision for doubtful debts?
ACCA Tutor: Yes to write them down. But that's not really a liability. There's a lot of informal language about
Bad debts, can they be irrecoverable balances?
ACCA Tutor: That's what they are
If the auditors disagree with how the client treats it?
ACCA Tutor: Then the auditors would say that there's a material misstatement
Would this be a reason to qualify the report then? What would be the correct thing to do?
ACCA Tutor: Absolutely - provided the amount is material. Auditors rule OK!
Is it advisable to do and revise past year questions? I heard, some students in the end answer the
memorised answers instead of answering that particular question.
ACCA Tutor: That's daft. This is an exam based on scenarios and they will change.
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