[19:13:38] balbina: P7 Session study [19:13:42] balbina: today topic is [19:13:52] balbina: E Other assignments 1. Audit-related services 2.

Assurance services 3. Prospective financial information4. Forensic audits5. Internal audit6. Outsourcing [19:14:00] balbina: now [19:14:10] balbina: lets start with 1. Audit-related services [19:14:51] balbina: here we need to know the difference between two assurance [19:15:08] balbina: do you know what kind of assurance engaganet do we have? [19:15:44] balbina: ISA 300 covers assurance engagement [19:16:07] balbina: reasonable and limited assurance engagement [19:16:17] balbina: have you heard about that? [19:16:42] geoklean: yes.. [19:16:57] taimooriqbal: yes [19:17:03] balbina: what about posotive and negative assurance? [19:17:42] geoklean: yes..but not sure exactly what they are :/ [19:18:00] balbina: so its good i mentioned that :) [19:18:04] taimooriqbal: positive assurance is anmnual audi [19:18:30] balbina: {taimooriqbal} can you explain pls [19:19:00] balbina: anmnual audi? [19:19:17] taimooriqbal: yes the audi of annual fin statement [19:19:31] balbina: audit? [19:19:34] geoklean: annual audit [19:19:40] taimooriqbal: whr u give positive assurance [19:19:55] balbina: aaa ok thx [19:19:59] balbina: yep good point

[19:20:22] taimooriqbal: positive assurance is giving that financial statment show true nd fair view [19:20:35] balbina: so positive assurance also called reasonable assurance [19:20:50] taimooriqbal: whr as negative assurance is in the case of other assignment e.g [19:21:06] balbina: negative also limited [19:21:16] taimooriqbal: yup [19:21:39] balbina: its when audidor cannot give opinion [19:21:42] taimooriqbal: in the case of DUE DILIGENCE ETC [19:21:54] balbina: he can only say that nothing has came into attention [19:22:02] geoklean: positive or negative..is distninguished from the wording of the opinion [19:22:09] balbina: its on forecast for example [19:22:26] balbina: negative doeasnt mean smth bad [19:22:31] taimooriqbal: whr u state that nothing has come to our attention that causes us to belive that fin statment do not present true nd fair view [19:22:36] balbina: its just they cannot give assurane [19:22:48] geoklean: no..just the way the conclusion is written [19:23:07] taimooriqbal: yes .. because of the limited information nd limited time available [19:23:09] balbina: its not an assurnace [19:23:15] balbina: yes [19:23:28] balbina: positive you give opinion on fs [19:23:36] geoklean: what u mean is not an ssurance? [19:23:39] balbina: you can say if it reflects true and fair view [19:24:06] balbina: {geoklean} sorry i wrote it in bad way [19:24:13] balbina: its limited assurance [19:24:30] balbina: positive is higher level of assurance [19:24:31] geoklean: a ok. thanks [19:24:58] balbina: good example is as taimpooriqbal wrote due dilligence [19:25:01] balbina: forecast [19:25:55] taimooriqbal: forecasr

[19:26:12] balbina: hmm reasonable assurance is mostly an audit, basicly talking [19:26:22] balbina: and limited assurance in an review [19:26:36] balbina: they have different procedures [19:26:37] taimooriqbal: exactly [19:26:44] geoklean: yeap :) clear :) [19:26:46] balbina: and audit is more detailed [19:27:07] balbina: i will refer to due dilligence [19:27:22] balbina: what ind of due dilligence can auditor do? [19:27:50] balbina: DD is very common with taking over [19:27:55] balbina: right? [19:28:04] taimooriqbal: examples [19:28:12] taimooriqbal: due diligence [19:28:16] balbina: auditr help to asses material risk [19:28:47] taimooriqbal: PURPOSE IS TO GATHER INFO abt [19:28:53] taimooriqbal: financial issues [19:28:59] taimooriqbal: operational issues [19:29:03] balbina: yep :) [19:29:05] taimooriqbal: legalissues [19:29:09] balbina: :) [19:29:11] taimooriqbal: taxation [19:29:26] balbina: what else? [19:29:31] balbina: people? [19:29:43] balbina: law and regulations [19:30:06] balbina: ok [19:30:25] taimooriqbal: procedures for due dilligence [19:30:47] taimooriqbal: debt / equity finance [19:31:28] balbina: ok i think i mixed two topics 1 and 2 :)

[19:31:37] balbina: 1. Audit-related services 2. Assurance services [19:31:48] balbina: the most important we wrote [19:31:58] balbina: 3. Prospective financial information [19:32:25] balbina: here we should be able to distinguisk between froecast and projection [19:32:36] balbina: do you know the difference between them? [19:33:28] balbina: what do you think? [19:33:32] balbina: common sense [19:33:58] balbina: what is foreacst? [19:35:43] geoklean: basis of assumptions [19:35:51] balbina: great [19:35:52] balbina: yes [19:36:08] balbina: its financial information based on assumptions [19:36:22] balbina: and projection [19:36:54] balbina: its more hypotetical assumptions [19:37:18] balbina: forecast is more related to managament actions [19:37:43] tusharacca: mixture of best estimate & hypothetical assumptions [19:37:45] balbina: projection is more mixture of best estimate and hypotetical assumptions [19:37:57] balbina: {tusharacca} yep :) thank you [19:38:09] tusharacca: welcome :D [19:38:10] balbina: so forecast is more certain [19:38:37] tusharacca: might b [19:38:44] balbina: ok now acca requires us to know the difference between hypothetical illustration and target [19:38:54] balbina: what is arget? [19:38:57] balbina: target [19:39:51] balbina: is what we want to achieve in the future? [19:40:07] taimooriqbal: wut did i miss ..?

[19:40:27] balbina: {taimooriqbal} the difference between hypothetical illustration and target [19:40:27] geoklean: target is a desired future outcome [19:40:33] balbina: {geoklean} :) [19:40:51] balbina: and hypothecial illustration? [19:41:31] geoklean: imagining the future outcome? [19:41:43] geoklean: sorry i dont remember the correct words on that :p [19:42:07] balbina: somehow [19:42:30] balbina: better words to be used can be uncertain future outomes [19:42:38] balbina: but you know the meaning :) [19:42:56] balbina: so target is specified for company, we know the direction [19:43:36] balbina: hypotetical illustration its about uncertain future events [19:43:44] balbina: its strage syllabus :) [19:43:54] balbina: dont you think so? [19:43:55] balbina: :) [19:44:26] geoklean: strange paper :) [19:44:32] balbina: hahah lol right :) [19:44:41] balbina: theory is raugh [19:44:55] balbina: but we need it before me start doing exam qs [19:45:03] balbina: that will be.. :) [19:45:26] balbina: 4. Forensic audits [19:45:42] balbina: its the process [19:46:10] balbina: we have specified procedures [19:46:46] balbina: it help us to gather, analyse, report on data, it helps us to gather evidence, facts [19:47:07] balbina: it also and advice to prevent some kind of situations [19:47:20] balbina: do you know OPTIC? [19:47:38] geoklean: no...? [19:47:41] taimooriqbal: no

[19:47:50] balbina: Objectivity [19:48:00] balbina: professional behavious [19:48:17] balbina: behaviour sorry :) [19:48:37] balbina: integrity [19:48:49] balbina: confidentiality [19:49:06] balbina: professional competence and due care [19:49:08] tusharacca: ACCA code of ethics and conduct Fundamental priciples [19:49:10] tusharacca: :D [19:49:17] balbina: {tusharacca} thank you again :) [19:49:23] taimooriqbal: y r we discussing it over her e [19:49:26] tusharacca: :D [19:49:28] geoklean: the T what is stands for? [19:49:50] balbina: dont remember :) [19:49:54] balbina: wait I look [19:50:45] balbina: sorry it should be OPPTIC [19:50:55] balbina: then t is technical standards [19:51:18] balbina: but in books i always saw 5 named above [19:51:34] taimooriqbal: its 5 normally [19:51:37] balbina: balbina: Objectivity balbina: behaviour sorry balbina: integrity balbina: confidentialitybalbina: professional competence and due care [19:51:38] geoklean: technical standards..meaning? [19:52:01] balbina: my teacher wrote that to us [19:52:51] geoklean: ok [19:52:52] balbina: hmm sorry i dont have the exact meaning for that [19:53:02] balbina: i shoulndt mention that

[19:53:17] balbina: 5 fundamenta priciples [19:53:22] taimooriqbal: techinical standards might mean standards required to carry out audit [19:53:30] taimooriqbal: e.g qualioty control standards [19:53:30] balbina: if you dont remember them try mnemonic opptic [19:53:34] taimooriqbal: for qc [19:54:01] geoklean: {taimooriqbal} yeap..ok :) thanks [19:54:14] balbina: well i checked mnemonics [19:54:18] balbina: and i found also [19:54:22] balbina: POPCI :D [19:54:57] balbina: but i remember OPTIC and it helps me a lot [19:55:20] taimooriqbal: lemme recaal [19:55:24] taimooriqbal: objectiovity [19:55:25] balbina: ?? [19:55:35] taimooriqbal: professional behaviour n due care. [19:55:41] taimooriqbal: technial standards [19:55:45] taimooriqbal: integrity [19:55:53] taimooriqbal: confidentiality [19:56:00] balbina: :) [19:56:23] balbina: one more p [19:56:50] taimooriqbal: umm ? [19:56:52] balbina: professional behaviour [19:56:58] geoklean: its mix in one :) [19:57:02] taimooriqbal: thts the ist one i wrote [19:57:02] balbina: yes [19:57:09] balbina: which one? [19:57:19] balbina: aah right [19:57:20] balbina: sorry

[19:57:34] geoklean: 1) Professional competence and due care 2) Professional behaviour [19:57:45] taimooriqbal: ahhh [19:57:51] balbina: {geoklean} yes [19:58:41] balbina: ok my dear friends [19:59:02] balbina: so we have forensic auditing investigation and accounting [19:59:18] balbina: forensic auditing we mentioned already [19:59:42] balbina: forensic investigation related more to criminal cases [20:00:01] balbina: we can investigate fraud, money laundering [20:00:35] taimooriqbal: investigation is presenting the facts in front of the judge i guess [20:01:31] balbina: but here it has bad meaning [20:01:36] balbina: asset tracing [20:01:43] balbina: fraud [20:01:46] balbina: money laundering [20:01:57] taimooriqbal: yea.. investigating all of these [20:02:04] balbina: we have also investigation in forensic accounting [20:02:27] balbina: here we need to investigate as well but its more about some particular event [20:02:44] balbina: in case of disputes [20:02:47] balbina: to use in court [20:03:31] balbina: auditors are called expert witnesses :) [20:03:57] balbina: :) [20:04:20] balbina: we have stil two topics 5 INternal audit 6 outsourcing [20:04:28] balbina: do you want to do it now? [20:04:34] taimooriqbal: yea.. [20:04:41] balbina: ok [20:05:00] balbina: 5 internal auidt [20:05:05] balbina: what is it? [20:05:52] taimooriqbal: internal audit is the operational investigation of the company

[20:06:02] balbina: {balbina} great [20:06:19] balbina: what is the difference to external audit? [20:06:44] taimooriqbal: all the procedures that r used on daily basis as well as on monthly or annually basis questioning there effectiveness [20:07:34] taimooriqbal: difference is .. [20:07:56] taimooriqbal: that external audit is red by law. nd its for shareholders [20:08:02] balbina: :) [20:08:26] taimooriqbal: internal audit is the effectivness of the procedures which directors wana know [20:08:42] balbina: :) [20:09:01] balbina: lets make some comparison [20:09:10] balbina: what are objectives of [20:09:15] balbina: external audit? [20:09:59] taimooriqbal: audit of financial statement [20:10:09] geoklean: to give an opinion on true and fair view of the FS [20:10:23] balbina: great [20:10:43] balbina: to give independent opion [20:10:48] balbina: and interna audit? [20:11:21] taimooriqbal: to verify the efficiency of processes [20:11:34] balbina: yep [20:11:44] balbina: can be many objectives [20:11:56] geoklean: risk assessments [20:12:32] balbina: in my company internal auditor controls all the risky transactions [20:13:02] balbina: company is taking over and shareholders drust internal auditor more than management board :) [20:13:24] balbina: External auditors report to who? [20:13:49] geoklean: shareholders..? [20:13:57] balbina: yes :) [20:13:59] taimooriqbal: yup

[20:14:03] balbina: and internal auditors? [20:14:18] taimooriqbal: to board of directors [20:14:23] balbina: also [20:14:33] balbina: to whom else? [20:14:46] balbina: AC [20:14:49] balbina: :) [20:14:54] taimooriqbal: AC? [20:14:55] strangerx2: internal auditors report to audit committee. [20:15:02] balbina: yes :) [20:15:28] taimooriqbal: yea [20:15:30] balbina: what about qualifications of external auditor [20:15:47] strangerx2: it depends country to country.. [20:16:02] strangerx2: in UK...ICAEW OR ACCA [20:16:10] taimooriqbal: member of a recognized accountancy body] [20:16:13] strangerx2: in pakistan CA [20:16:19] balbina: we take P7 INT :) [20:16:39] strangerx2: we are studying international.. [20:16:42] balbina: lets think more general :) [20:17:26] balbina: external auditor must be qualified memeber of recognised professional body [20:17:32] strangerx2: but acca is not recognised in every country....they dont hve the signing power. [20:17:47] balbina: its more general [20:17:52] strangerx2: yes ryt. [20:18:10] balbina: and also marker will give us mark faster :) [20:18:17] balbina: and internal auditor? [20:18:27] balbina: what qualifications are needed? [20:19:25] strangerx2: no requirement for qualification but it is preferable that he/she must be qualified from recognised body [20:19:39] balbina: {strangerx2} perfect

[20:19:42] balbina: 1 point :) [20:19:44] strangerx2: thanx.. [20:20:00] strangerx2: are we testing each other knowledge? [20:20:08] strangerx2: others* [20:20:09] balbina: yep :) [20:20:16] balbina: we are studying [20:20:34] balbina: we all are not sure about our knowlege so good if someone cinfirms :) [20:20:35] strangerx2: alryt tel me how many types audit strategies are there?. [20:21:14] balbina: we are at point 5 and 6 you know? [20:21:23] balbina: 5. Internal audit 6. Outsourcing [20:21:41] strangerx2: ohhk... [20:21:44] balbina: so i wanted to move forward to outsourcing [20:22:06] balbina: can you name me any benefits of having outsourcing? [20:22:14] strangerx2: ok...ask anything...i think its really basic.. [20:22:16] taimooriqbal: many [20:22:24] strangerx2: yes... [20:22:26] balbina: ok go on [20:22:33] taimooriqbal: independant opinion [20:22:36] balbina: common sense [20:22:36] omer321: concentrate on ur comapnies strenghts [20:22:37] taimooriqbal: expert advice [20:22:43] strangerx2: ryt.. [20:22:48] strangerx2: and? [20:22:51] taimooriqbal: etc etc etc [20:23:02] taimooriqbal: cost nd time effective [20:23:07] balbina: quality?

[20:23:12] taimooriqbal: efficient utilization of resources [20:23:19] strangerx2: and? [20:23:19] balbina: yess time effective especially [20:23:38] balbina: and disadvanteges? [20:23:46] omer321: quality could be compramised if u havent choosen the outsourcing firm well [20:24:20] strangerx2: inital cost. [20:24:28] strangerx2: of internal setup [20:24:38] geoklean: inflexibility of contracts [20:24:59] taimooriqbal: confidentiality sacrificed [20:25:09] balbina: {taimooriqbal} good one [20:25:20] balbina: limited knowlege about the company [20:25:28] omer321: fee incrementals could result in disputes [20:25:28] strangerx2: no i think confidentiality is sacrificed by outsourcing.. [20:25:43] taimooriqbal: cultural differnces [20:26:46] strangerx2: companies setup internal setup only due to confidentiality.. [20:26:46] balbina: may lose control [20:27:22] balbina: may create opposition from employees [20:27:30] strangerx2: how they loose control? [20:27:42] taimooriqbal: move forward [20:27:55] strangerx2: how outsourcing create opposition from employees? [20:28:01] geoklean: lose control of a business process or function [20:28:04] strangerx2: justify. [20:28:08] balbina: internal audit is dependent [20:28:24] strangerx2: business process is nothing to do with internal auditing? [20:28:25] balbina: outsourced is more indepenedent [20:28:53] strangerx2: yes.. [20:28:59] balbina: ok guys

[20:29:15] balbina: and we are done with part D :) [20:29:21] balbina: im so praud of you :) [20:29:31] omer321: proud..lol [20:29:45] balbina: for the next session part E next MOnday 6pm uk [20:29:47] strangerx2: have u finsihed prior partS? [20:30:09] balbina: we finished A-D [20:30:28] strangerx2: ohk great? [20:30:34] balbina: ? [20:30:34] strangerx2: when do u people to revise? [20:30:53] balbina: after 2 weeks probably [20:31:23] strangerx2: i didnt know about this i just visited p7 section...and with ongoing discussion decided to take part.. [20:31:40] strangerx2: i was searching for study buddy for p6 p7 [20:31:44] balbina: ohhh its topic on forum [20:31:47] strangerx2: ohk alryt.. [20:31:51] balbina: P7 forum [20:32:38] strangerx2: i am only silent users..i dont visit forums mostly... [20:32:45] strangerx2: user* [20:33:00] strangerx2: so thats y.. [20:33:13] balbina: The session is over, you may go :) [20:33:17] balbina: LOL [20:33:30] balbina: thank you very much for participation :) [20:33:32] strangerx2: which paper are you studying other than p7? [20:33:35] geoklean: :) [20:33:37] balbina: and see you next MOnday [20:33:58] strangerx2: ohk alryt..