[22:37:48] geoklean: wht about Cleeves ? from dec 06?

[22:38:07] balbina: Q67 [22:38:11] balbina: i ve got it [22:38:16] balbina: reporting :) [22:38:23] geoklean: yes [22:38:25] balbina: it will wake me up [22:38:25] geoklean: 15 marks [22:38:36] geoklean: for sure :) [22:38:59] poswal11: state the requirements clearly please [22:40:10] geoklean: ok let us read the qn and we will tell [22:40:21] poswal11: ok [22:41:01] fgassita: {seagoat} what is the auditors response to a 1st year audit [22:41:03] fgassita: ? [22:41:32] balbina: {geoklean} ok I read more less [22:41:42] seagoat: {fgassita} full substantive testing? [22:42:03] fgassita: increased substantive tests [22:42:10] geoklean: ok [22:42:12] geoklean: part a [22:42:14] seagoat: ok [22:42:45] balbina: a) [22:42:54] poswal11: {fgassita} system documentation is a key [22:42:56] geoklean: it says: Explain the auditor's responsibilities for reporting non-compliance that comes to the auditor's attention during the conduct of an audit [22:43:13] balbina: ISA 250 Consideration of laws and regulations in an audit of financial statements [22:43:17] fgassita: {poswal11} nice one.....plz elaborate [22:43:18] geoklean: ISA 520 Consideration of Laws and Regulations in an Audit of FS [22:43:23] geoklean: :) [22:43:47] poswal11: {fgassita} first this question please

[22:44:02] poswal11: then at the end we will shed some light on it [22:44:23] balbina: 250 os 520? [22:44:30] balbina: i dont remember them [22:44:34] fgassita: non-compliance with ifrs? [22:44:34] geoklean: 250! sorry [22:44:44] poswal11: {geoklean} this question some broad aspects [22:44:48] balbina: i though they made mistake and i need to correct it [22:44:51] geoklean: yes [22:44:52] poswal11: or this requirement [22:44:58] balbina: 520 is GC or smth? [22:45:06] geoklean: oh..let me check then my notes [22:45:30] fgassita: {geoklean} it should be reported to high level of management and local authorities [22:45:33] geoklean: ours now is correct..250. [22:45:33] balbina: 250 was correct [22:45:43] poswal11: 250 it is [22:45:44] balbina: 520 analytical procedures [22:45:51] balbina: 570 gc [22:46:05] geoklean: yes..i made mistake before..typing error [22:46:39] balbina: i really thought it was mistake lol [22:46:59] fgassita: {balbina} who cares?numbers arent important [22:47:32] geoklean: no marks gained, but probably will loose if you put wrong number.. [22:47:41] geoklean: so i think is better to avoid that [22:47:57] fgassita: {geoklean} yup......avoid putting numbers [22:48:00] balbina: {geoklean} yes [22:48:05] balbina: unless you are sure [22:48:17] geoklean: of course :) [22:48:27] geoklean: back to qn. part a

[22:48:28] poswal11: can we start question please [22:48:31] balbina: ok so a part [22:48:38] balbina: no other topics :) [22:48:47] balbina: so responsibilities right? [22:49:38] poswal11: there is no as such duty of auditors when a compliance comes as long as it doest not effect to the financial statement and it should be material [22:50:05] geoklean: {balbina} on reporting non-compliance [22:51:34] harmony1605: which question are y ou doing [22:51:46] harmony1605: please [22:51:52] geoklean: cleeves [22:52:07] geoklean: from dec 06 [22:52:23] harmony1605: oh that far back [22:52:24] geoklean: {poswal11} can you explain that please? [22:52:36] balbina: right [22:52:51] balbina: its management responsibility to be familiar with laws and regulations [22:53:17] poswal11: those thing are important which are material to the financial statements [22:53:28] balbina: auditor is only responsible to detect any material misstatement regarding not fulfilling laws and regulations by client [22:53:50] poswal11: that affects the understanding of the users of the financial statement [22:54:11] balbina: yeah auditor need to be familiar with laws and regulations regarding client [22:54:25] balbina: so need to understand the branch of client [22:54:53] geoklean: ooo ok [22:54:54] poswal11: if auditors found that entity is not complying then need to ask from those who are charged of governance [22:54:58] geoklean: now i understand!! [22:55:10] balbina: can ask expert [22:55:38] poswal11: if auditors think mgt is collusion delibberatelt then audit committee first [22:55:53] poswal11: *deliberately [22:56:58] balbina: then shareholders

[22:57:05] geoklean: ok if there is no audit committee? [22:57:16] balbina: sh? [22:57:33] geoklean: yes [22:57:33] balbina: report to acca :D [22:57:53] poswal11: in come cases non compilance is not material but still auditors need to work out BEcause it caste doubs on the integrity of management [22:58:08] cheeta0123: {balbina} u did p4? [22:58:13] balbina: {cheeta0123} nope [22:58:24] balbina: {poswal11} but there is no scenario [22:58:32] cheeta0123: {balbina} thats why u smiling :cry: [22:58:33] balbina: so we need to consider materiality [22:58:44] poswal11: ok [22:58:45] balbina: if material then report non-compliance [22:58:50] balbina: if not material? [22:58:56] balbina: do nothing? [22:59:14] cheeta0123: {balbina} put in ML [22:59:21] poswal11: {balbina} it still caste doubt on the integrity of a mgt [22:59:26] balbina: ML? [22:59:35] cheeta0123: management letter [22:59:39] balbina: aaa [22:59:56] poswal11: legal assistance [23:00:06] cheeta0123: i m senior auditor :) [23:00:21] geoklean: if the involvement of management? to whom we report? [23:00:30] poswal11: audit committee [23:01:07] geoklean: ok, if the auditor believes that the AC will do nothing? [23:01:21] poswal11: if there is suspect at highest possible level then legal assistance [23:01:30] geoklean: :) [23:01:31] geoklean: thanks

[23:01:55] balbina: {cheeta0123} :star: [23:02:31] poswal11: audit opinion will be directly releated to the evidence [23:03:00] balbina: enough for 5 marks? [23:03:10] poswal11: if it has not been adequately disclosed and material then qualified opinion [23:03:40] geoklean: {balbina} no [23:03:48] balbina: except for paragraph [23:04:00] poswal11: if there is limmitation of scope then disclaimer should be issued [23:04:55] seagoat: ok... [23:04:59] seagoat: but [23:05:04] seagoat: WHAT DOES THE FOX SAY ?!?! [23:05:25] poswal11: there is also a responsibility of auditor to report non compilance to the reporting organization considering interests of different parties [23:06:08] balbina: {seagoat} cant listen that [23:06:45] poswal11: {cheeta0123} where he lost,spoiler :P [23:07:32] geoklean: and when the auditor disclose info to regulatory and enforcement authorities? [23:07:56] fgassita: {geoklean} suspect and discovers fraud [23:08:17] poswal11: and in interests of the public [23:08:31] poswal11: treason [23:08:39] poswal11: money laundering [23:09:11] geoklean: the auditor needs to consider duty of confidentiality before disclose anything [23:09:40] geoklean: and may seek legal advise on that [23:09:44] poswal11: yes but he needs to evaluate the interests as well at the same time [23:09:55] geoklean: yes [23:10:22] geoklean: ok [23:10:24] geoklean: part b) [23:11:04] balbina: first what i see there is no "basis for ... opinion" [23:11:25] balbina: there is no info inthe next paragraph title what opinion it is [23:12:33] geoklean: ok, is not properly headed

[23:13:06] geoklean: what else? [23:14:00] geoklean: babli something on ISA 36? [23:14:01] balbina: its written note 11 and 15 [23:14:12] geoklean: IAS 36..sorry again :/ [23:14:16] balbina: it is not well known what they are related to [23:14:38] balbina: impairment loss related to ias 36 [23:14:40] balbina: right [23:15:02] poswal11: {balbina} 36 here???????? [23:15:22] geoklean: yes [23:15:26] balbina: imp? [23:15:38] poswal11: why here [23:15:50] geoklean: the title of ias 36 should be stated in full in the audit report [23:16:18] balbina: auditor state that is should have been recognised [23:16:24] geoklean: {poswal11} part b i gives us a case study..an audit opinion and we have to comment on that [23:16:31] poswal11: it does not make sense [23:16:52] poswal11: ok ithought u guys are still on a [23:16:55] balbina: directors are not able to quantify the loss [23:17:23] poswal11: i cant go through it as i dnt have now sorry [23:17:28] balbina: and we are also unable to do so [23:17:56] balbina: i dont know what i should do with that [23:18:07] poswal11: {balbina} u dnt have book? [23:18:08] geoklean: i dont like these kind of questions :( it playys with words! [23:19:19] seagoat: :) [23:19:30] geoklean: it says on the answer: [23:21:07] balbina: we cannot quantify it and mgnt neither [23:21:16] geoklean: since impairements should be quantifiable and not quantified and "inability" suggest an inability to gather sufficient appropriate evidence, in which case the opinon should be disclaimed (or except for) on grounds of lack of evidence rether than material misstatement

[23:21:54] balbina: aa so that we are unable to state an opinion [23:21:56] balbina: ok [23:22:06] balbina: so material and pervasive [23:22:08] balbina: ok [23:22:21] balbina: next paragraph? [23:22:34] balbina: opinion may be too strong [23:22:47] balbina: they say fs do not show true and fair view [23:23:17] balbina: do not show is adverse opinion [23:23:34] balbina: so it should be disclaimer [23:23:36] balbina: right? [23:24:10] seagoat: yes [23:24:26] seagoat: insufficient information = disclaimer (if the insufficiency is pervasive) [23:24:37] geoklean: yes [23:26:33] seagoat: :) [23:27:09] geoklean: ? [23:27:11] geoklean: noo [23:27:17] geoklean: adversee [23:27:19] seagoat: no? [23:27:20] geoklean: :p [23:27:26] geoklean: adverse opinion [23:27:46] seagoat: scope of limitation = disclaimer [23:28:07] seagoat: disagreement = adverse [23:28:15] balbina: {seagoat} yes [23:28:16] geoklean: no [23:28:18] seagoat: yes [23:28:42] balbina: guys what are you talking about? is it private discussion? :) [23:28:53] geoklean: if it is very material is disclaimer yes..but if it is not, then is except for....this is for limitation of scope

[23:29:33] geoklean: disagreement, agaain if it is very material is adverse, if just material is except for [23:29:36] poswal11: renderd meaningless [23:29:44] balbina: {geoklean} yes [23:29:48] geoklean: {poswal11} halp? [23:29:55] geoklean: *help [23:30:05] seagoat: what does it mean [23:30:08] seagoat: "very material" [23:30:16] balbina: geo is drinking :) [23:30:21] balbina: halp [23:30:28] geoklean: very material = disclaimer/ adverse [23:30:31] poswal11: drunkard [23:30:35] seagoat: lol [23:30:36] geoklean: ? :( [23:30:38] seagoat: geoklan [23:30:39] poswal11: {geoklean} u r righttttttttttttttttttttttttttttttttt [23:30:41] balbina: {poswal11} yes [23:30:42] seagoat: there is not such thing [23:30:43] seagoat: as [23:30:47] seagoat: "very material" [23:30:50] seagoat: dont write this on exam [23:30:59] seagoat: you have [23:31:02] seagoat: 1. Immaterial [23:31:02] geoklean: no re seagoat [23:31:03] seagoat: 2. Material [23:31:08] seagoat: 3. Pervasive [23:31:28] geoklean: just explaining to make it clear whjat i mean and to be easiest for us to identify what opinion we should give

[23:31:34] seagoat: ok [23:31:36] seagoat: sorry [23:32:35] seagoat: and "Mieszanka" company has a VAT refund [23:32:35] seagoat: of [23:32:54] seagoat: outstounding [23:32:58] seagoat: 4 814 PLN [23:33:04] seagoat: which is 1 200 EUR [23:33:04] poswal11: material lack of evidence then qualified except for [23:33:30] poswal11: pervasive lack of evidence then disclaimer of opinion [23:34:02] geoklean: thank you! [23:34:28] poswal11: i thought u guys were kidding [23:34:42] poswal11: but it is getting serious on opinions :D [23:35:03] geoklean: ok [23:35:10] geoklean: balbi? finish for today? [23:35:25] seagoat: disclaimer of opinion or adverse opinion [23:35:31] seagoat: if pervasive [23:36:50] poswal11: if misstatement is pervasive then modified opinion called adverse opinion [23:37:03] seagoat: yes [23:37:17] seagoat: is scope of limitation is pervasive then opinion is a disclaimer [23:37:24] seagoat: *if [23:37:29] poswal11: {seagoat} agreed [23:37:44] seagoat: if "just" material [23:37:56] poswal11: then adverses [23:37:59] seagoat: then opinion is qualified except for disagreement [23:38:05] seagoat: of the material mistatement [23:38:16] seagoat: or disagreement for scope of limitation [23:38:41] poswal11: is it p7 or sleepy room?

[23:38:56] seagoat: well im listening to music so no sleeping :D [23:38:57] seagoat: tonight [23:39:18] poswal11: no dance? [23:39:40] geoklean: balbina [23:39:45] balbina: yep [23:39:49] geoklean: what about Prior year audit report? [23:40:01] balbina: it was nmodifeid [23:40:06] geoklean: it was written idintically it says [23:40:07] balbina: wait [23:40:11] balbina: let me read it [23:40:23] balbina: or write here so the rest can see [23:40:52] geoklean: identically report for previous year also [23:40:56] geoklean: what that means? [23:41:07] geoklean: unsolved issues [23:41:43] balbina: the last sentence you mean? [23:42:05] geoklean: yes [23:42:10] balbina: it seems it was last year report [23:42:26] balbina: the same words? [23:42:46] balbina: i dont understand it [23:42:48] geoklean: last year report was worded identically [23:42:58] geoklean: exact same report as this year [23:43:06] balbina: do they mean that opinion was written exactly the same? [23:43:27] geoklean: yes [23:43:29] balbina: or that it was ias 36 issue [23:43:45] geoklean: with adverse opinion for same issues [23:43:51] balbina: so maybe the quality of the report was not good [23:43:51] geoklean: everything

[23:44:01] balbina: aaa it was adverse [23:44:08] balbina: but why not disclaimer? [23:44:43] geoklean: ok [23:44:51] balbina: please elaborate [23:45:46] geoklean: is an adverse for 2006 in a because: the effects of non compliance with IAS 36 are to overstate the carrying amounts of non-current assets and to understate the loss. [23:46:36] geoklean: FS are not as a whole not complete or misleading [23:47:10] geoklean: a loss is already being reported [23:47:28] geoklean: so it is not that a reported profit would be turned into less [23:47:44] geoklean: so..more appropriate opinion is advverse [23:47:57] geoklean: rather than pervasive [23:48:17] geoklean: {balbina} agree? [23:48:36] balbina: i m not sure [23:48:52] geoklean: ok [23:49:12] seagoat: adverse opinion is because of pervasive mistatement [23:49:15] balbina: so they state that not compliance with ias 36 is so material that ruins the whole picture of fs [23:49:20] geoklean: the mistatement is not very material because the image of the company is not changing materially [23:49:34] balbina: {geoklean} so why adverse? [23:50:11] balbina: i dont get it or its just too late [23:50:33] seagoat: i recommend avoiding saying "very material" [23:50:41] seagoat: "very material" = pervasive [23:50:58] balbina: {seagoat} :) [23:51:04] balbina: he is right lol [23:51:15] seagoat: there are 3 stages [23:51:20] seagoat: of misstatement [23:51:23] seagoat: 1. Immaterial [23:51:30] seagoat: 2. Material (but NOT pervasive)

[23:51:40] seagoat: 3. Pervasive ( "very material" ) [23:51:49] geoklean: hmm ok [23:51:52] geoklean: u r right [23:51:59] seagoat: when you decide on the significance [23:52:03] geoklean: :| [23:52:03] seagoat: of the mistatement [23:52:06] seagoat: you then decide [23:52:12] seagoat: whether its because of an ERROR [23:52:13] seagoat: or [23:52:27] seagoat: SCOPE OF LIMITATION (auditor was unable to review some part of FS) [23:52:37] seagoat: so in this case above [23:52:39] seagoat: IAS 36 [23:52:45] seagoat: it was ERROR [23:52:56] seagoat: a pervasive error [23:53:03] seagoat: pervasive misstatement [23:53:07] seagoat: so ADVERSE OPINION [23:54:07] geoklean: ok, the answer says that it would be more appropriate to give except for opinion, rather than adverse opinion [23:54:26] balbina: {geoklean} i would give excpt for [23:54:33] poswal11: {seagoat} auditor was unable to get sufficient evidence t(scope limitation) [23:54:39] seagoat: yeah maybe [23:54:42] seagoat: i dont see the question [23:54:48] seagoat: i only base on what u saying :) [23:54:48] geoklean: {balbina} yes [23:54:56] balbina: its just one thing which is material and fs shows true and fair view [23:55:08] geoklean: yes [23:55:11] balbina: so what is the last sentence about [23:55:17] geoklean: so..for prior year now

[23:55:22] balbina: prior year opinion [23:55:35] balbina: they said its adverse right [23:55:41] geoklean: yes [23:55:47] balbina: even if we think its different [23:55:54] balbina: what shoud we do? [23:56:00] balbina: can we amend the report? [23:56:10] balbina: last year report stay the same [23:56:41] balbina: this year report? [23:57:07] geoklean: well, we should give modified opinion regarding the corresponding figures [23:57:32] geoklean: because the previous issues are unresolved [23:58:04] geoklean: which those issues resulted to the modification [23:58:11] geoklean: for both year [23:59:30] geoklean: and also, this years report doesnot refer to the prior year modification nor highlighting that the matter reslting in the current period modification is not new. [23:59:57] balbina: {geoklean} right they should refer [00:00:38] geoklean: yes [00:00:45] geoklean: part b) ii) [00:00:58] balbina: :sleep: :) [00:01:05] balbina: because its late [00:01:09] geoklean: :) [00:01:15] geoklean: yea..here is 1am :\ [00:01:16] poswal11: i am in [00:01:18] seagoat: :) [00:01:37] geoklean: balbi is 3 marks [00:01:46] balbina: exam must be close :) [00:02:06] balbina: we are sitting doing Qs in the middle of night at working day [00:02:14] seagoat: as we are sitting longer and longer [00:02:15] balbina: what acca done with us

[00:02:17] seagoat: (later and later) [00:02:18] geoklean: dont remind me :p [00:02:23] balbina: ok so [00:02:26] poswal11: {geoklean} where are u located? [00:02:32] geoklean: Cyprus [00:02:34] geoklean: u? [00:02:38] poswal11: uk [00:02:41] seagoat: ive been to Cyprus once [00:02:50] geoklean: :) [00:02:56] poswal11: i have been to poland once [00:02:56] geoklean: u liked it? [00:03:02] seagoat: Limassol [00:03:06] seagoat: yes very much [00:03:06] balbina: me too :) [00:03:19] geoklean: you should all come again :) [00:03:23] geoklean: acca meeting :D [00:03:28] balbina: after we pass audit [00:03:34] poswal11: {geoklean} my best frnd gf is from cyprus:D [00:03:35] geoklean: ok [00:03:38] geoklean: Qn [00:03:43] geoklean: part b) ii [00:03:47] geoklean: and then finish :D [00:04:04] balbina: so Hogward is 100% owned by parr [00:04:04] geoklean: implications on the consolidated FS [00:04:06] poswal11: {balbina} what if some 1 is already passed [00:04:13] balbina: and its material for parent [00:04:34] geoklean: {poswal11} you have to wait for us to finish too :D

[00:04:34] seagoat: 50 points to Gryfindor ! [00:05:02] balbina: {seagoat} did u take smth? :) [00:05:11] seagoat: no [00:05:14] seagoat: :) [00:05:38] balbina: so i guess if there is material thing in hogward then it has the impact on parr [00:05:42] geoklean: focus on qn pleaseee [00:05:49] geoklean: o :D [00:05:52] seagoat: yes sry [00:06:10] poswal11: {geoklean} which question it is? [00:06:21] seagoat: but Gryfindor is part of Hogwarts :| [00:06:22] seagoat: :( [00:06:23] seagoat: okay [00:06:25] seagoat: sorry [00:06:35] balbina: so if hogward is qualified, then parr qualified as well [00:06:42] balbina: because its material [00:06:54] balbina: if hogward is adverse [00:07:03] geoklean: Cleeves Dec 06!! [00:07:06] balbina: then parr what? except for enough? [00:07:21] geoklean: implications on the consolidated FS [00:07:39] balbina: parr has consolidaed fs [00:08:14] geoklean: maybe is not material to the group [00:08:25] balbina: so hogward cas can impact on qualified opinion of consolidated fs [00:08:40] balbina: so then what? [00:09:03] geoklean: :| ok [00:09:18] geoklean: if no material to the Group FS, no implication [00:09:36] geoklean: if material, then adverse opinion [00:10:01] geoklean: but most probably will not have implication to the group FS

[00:10:07] poswal11: {geoklean} but we need to deal things to individual fs [00:10:30] geoklean: yes [00:11:10] poswal11: it will be qualified at its own level [00:11:14] geoklean: the auditor should be able to request FS of the sub [00:11:50] balbina: lol i just read its not Hogward but Howard :D [00:11:59] geoklean: am too sleepy to understand what am reading :| [00:12:07] balbina: {geoklean} me too :) [00:12:12] balbina: lets finish [00:12:25] balbina: i guess u r right [00:12:31] balbina: everyone agree :D [00:12:33] seagoat: :) [00:12:42] seagoat: by silence i agree [00:12:43] seagoat: :D [00:12:43] poswal11: me not :D [00:12:48] geoklean: :) [00:12:50] balbina: {poswal11} speak [00:12:59] geoklean: fast :D [00:13:00] poswal11: do studies [00:13:12] balbina: {poswal11} be fast [00:13:24] poswal11: yeah start studying plz [00:13:27] balbina: and speak now please or be silent for ever [00:13:37] poswal11: i am speaking [00:13:55] balbina: why u disagree [00:14:02] geoklean: ok we are done for today [00:14:07] geoklean: he agrees [00:14:10] poswal11: u guys just lest with a few days [00:14:23] poswal11: *left

[00:14:39] poswal11: upto u guys i dnt see any prbm [00:14:47] balbina: i m so hugry :( [00:14:55] poswal11: eat me [00:15:08] balbina: :) [00:15:13] poswal11: :P [00:15:23] balbina: fast replay [00:15:23] geoklean: ok [00:15:25] geoklean: balbi [00:15:30] balbina: yeah [00:15:33] balbina: sleep? [00:15:33] geoklean: am leaving [00:15:38] balbina: me too [00:15:40] geoklean: 1:15 am here [00:15:47] balbina: we are crazy [00:15:50] geoklean: work tomorrow [00:15:50] seagoat: 00:15 [00:15:54] balbina: but tomorrow we replay :) [00:15:58] poswal11: 11 15 [00:16:16] geoklean: yea..the last part of this qn [00:16:19] geoklean: ok.. [00:16:21] balbina: kalinihta and efharisto poli :) [00:16:23] geoklean: thank you everyone [00:16:28] geoklean: good night [00:16:30] geoklean: :D [00:16:30] poswal11: i will ask a book then knock u all out:D [00:16:37] seagoat: bye bye geo :) [00:16:42] balbina: {geoklean} :* for good night

[00:16:44] poswal11: bye [00:16:50] geoklean: bye :D