[19:03:27] balbina: P7 STUDY SESSION 5 [19:03:37] balbina: Today the topic is [19:03:59] balbina: D Audit of historical financial information

[19:04:00] balbina: 3. Evaluation and review [19:04:09] balbina: 4. Group audit [19:04:35] balbina: first 3. Evaluation and review then [19:05:39] balbina: for me point 3 is totally P2 [19:05:46] balbina: dont you think so? [19:06:18] balbina: here we can find almost all ias and ifrs [19:06:39] balbina: do you remember them? [19:06:50] nokia: yes [19:07:00] nokia: u r right [19:07:02] balbina: are you confident with ias, ifrs? [19:07:08] nokia: 102% [19:07:15] balbina: wow [19:07:19] nokia: over confident i m :D [19:07:24] balbina: really 102%? [19:07:29] balbina: the others? [19:07:46] balbina: are you aware that also in P7 we need to know them? [19:07:50] nokia: they are sleeping i guess [19:08:02] nokia: yes i m aware madam [19:08:17] geoklean: nokia arent you already qualified? [19:08:22] nokia: yup [19:08:24] nokia: i m [19:08:28] geoklean: ok [19:08:45] nokia: just want to gain knowledge [19:09:05] nokia: {geoklean} how the hell u know that i m qualified?

[19:09:08] nokia: :) [19:09:39] geoklean: {balbina} continue with session [19:09:53] nokia: ok balbina [19:09:54] nokia: go on [19:10:50] nokia: :sleep: [19:12:05] balbina: its going to be boring but i think its good to make review [19:12:09] balbina: through all ias [19:12:16] nokia: {balbina} ok [19:12:18] taimooriqbal: ok... [19:12:21] balbina: r u ready? [19:12:26] nokia: yessss!! [19:12:29] geoklean: {balbina} that will be good [19:12:31] balbina: i put the number and you write what is it about [19:12:32] taimooriqbal: do we need to bring out sme notes or nything? [19:12:35] nokia: if you smeeellll but the rock is coookin [19:12:43] nokia: ok [19:12:44] balbina: lets get start it [19:12:46] nokia: ok [19:12:48] balbina: IAS 1 [19:12:56] nokia: presentation of FS [19:13:00] balbina: great [19:13:04] balbina: nokia 1 point [19:13:07] balbina: IAS 2 [19:13:12] nokia: inventry [19:13:20] balbina: nokia 2 points [19:13:23] nokia: lower of cost and NRV [19:13:25] balbina: IAS 3

[19:13:27] balbina: :P [19:13:30] nokia: lol [19:13:33] nokia: funny [19:13:50] taimooriqbal: wts this ? [19:13:54] balbina: IAS 7 [19:14:00] nokia: cashflo [19:14:03] taimooriqbal: cash flow [19:14:11] balbina: nokia 3 point [19:14:14] geoklean: {taimooriqbal} isa 3 does not exist :) [19:14:21] balbina: :) [19:14:23] balbina: yep [19:14:25] balbina: IAS 8 [19:14:28] nokia: changes in ac policy estimare and error [19:14:30] geoklean: ias * sorry [19:14:30] nokia: lol [19:14:32] taimooriqbal: estimates [19:14:33] nokia: 4 points [19:14:38] nokia: i have [19:14:45] balbina: nokia 4 points [19:14:47] geoklean: well done nokia! [19:14:54] nokia: events after the bs date ias 10 [19:15:00] balbina: IAS 17 [19:15:00] nokia: ias 11 construciton contrsds [19:15:04] nokia: leases [19:15:12] balbina: nokia 5 points [19:15:12] nokia: lol [19:15:20] balbina: IAS 27

[19:15:28] nokia: consolidartee and seperte fs [19:15:30] geoklean: i guess nokia should take the exam for us! you know everything [19:15:54] nokia: 6 points i have [19:15:57] balbina: separate fs [19:15:58] nokia: :O [19:16:00] balbina: yep [19:16:01] nokia: yes [19:16:07] balbina: IAS 39 [19:16:18] taimooriqbal: guys smthing prodcutive plllz [19:16:25] taimooriqbal: financial ins [19:16:26] nokia: financial instuments presentation [19:16:30] nokia: lol [19:16:42] balbina: taimooriqbal 1 point [19:16:46] nokia: hahahaha [19:16:53] balbina: nokia still 6 points [19:16:58] nokia: oh :( [19:17:01] balbina: IAS 33 [19:17:01] taimooriqbal: ohhh come on ... [19:17:02] nokia: :P [19:17:04] nokia: eps [19:17:12] nokia: earing per share [19:17:13] balbina: nokia 7 p [19:17:16] taimooriqbal: i wasnt evn racing .. [19:17:21] nokia: hahah [19:17:23] nokia: next pls [19:17:27] balbina: IAS 21 [19:17:29] taimooriqbal: 34?

[19:17:30] nokia: it funny and dam easy [19:17:37] nokia: gov grant [19:17:49] nokia: {taimooriqbal} interim FS i\ [19:17:50] nokia: ? [19:18:08] balbina: no... [19:18:10] nokia: {balbina} 21 is govt grants? [19:18:14] balbina: nope [19:18:19] nokia: {balbina} forting currency? [19:18:22] nokia: foreign? [19:18:24] balbina: yep forex [19:18:28] nokia: wow [19:18:33] balbina: nokia 8 points [19:18:33] nokia: 8 p [19:18:39] balbina: lol :) [19:18:47] taimooriqbal: ok ok [19:18:48] balbina: IAS 19 [19:18:50] taimooriqbal: nokia won... [19:18:54] nokia: {balbina} thanks balbina : :-@> [19:18:57] taimooriqbal: employee ben [19:19:00] nokia: employee ben [19:19:02] nokia: lol [19:19:04] balbina: {taimooriqbal} 2 points [19:19:08] balbina: {nokia} 8 points [19:19:10] taimooriqbal: oh seriouslyyy [19:19:23] balbina: i dont like this one... [19:19:28] balbina: ias 19 [19:19:35] balbina: IAS 16

[19:19:37] taimooriqbal: i didnt hv the strenght to type .. otherwise i wud hv earned all the gold cons [19:19:39] taimooriqbal: i mean points [19:19:40] nokia: pPE [19:19:46] nokia: prop plant and equip[ [19:19:49] balbina: nokia 9 points [19:19:53] balbina: IAS 11 [19:19:59] nokia: cons contracts [19:19:59] taimooriqbal: :sleep: [19:20:06] balbina: nokia 10 points [19:20:14] nokia: {balbina} haha ;) [19:20:15] balbina: IAS 40 [19:20:16] geoklean: {taimooriqbal} r u qualified too? [19:20:18] taimooriqbal: is that goana go on n on ? [19:20:22] nokia: ionvestment property [19:20:28] balbina: nokia 11 points [19:20:35] nokia: {taimooriqbal} its b/w me and balbi :D [19:20:37] balbina: yes we name all IAS [19:20:42] taimooriqbal: no .. deduct the points for spelling mistake [19:20:48] balbina: hahaha [19:20:49] nokia: {taimooriqbal} lol [19:20:51] balbina: IAS 12 [19:20:59] nokia: {balbina} leases [19:21:02] nokia: defer tax [19:21:08] balbina: noooo [19:21:13] nokia: taxation [19:21:18] balbina: income tax [19:21:23] nokia: oooooo

[19:21:25] balbina: 12 points [19:21:34] nokia: ;) [19:21:34] balbina: IAS 10 [19:21:41] nokia: events aftr bs date [19:21:42] taimooriqbal: events [19:21:52] balbina: nokia 13 points [19:22:00] balbina: IAS 38 [19:22:02] taimooriqbal: goodness gracious wut r v studying ? [19:22:06] nokia: intangioble assets [19:22:08] taimooriqbal: intangible [19:22:12] taimooriqbal: urghhhhhhhhhhh [19:22:14] balbina: nokia 14 points [19:22:18] balbina: IAS 23 [19:22:23] taimooriqbal: borroow [19:22:26] nokia: govt grant [19:22:32] balbina: {taimooriqbal} 3 points [19:22:36] nokia: nokia 15??? [19:22:38] taimooriqbal: yeeehaaa [19:22:41] nokia: hahaha [19:22:45] taimooriqbal: all i wanted in life [19:22:50] nokia: {balbi thats wrong [19:22:53] balbina: nokia for every mistake i should deduct :D [19:23:02] nokia: {balbina} haha :P [19:23:21] balbina: IAS 37 [19:23:22] taimooriqbal: ok done wid this game .. shud v play musical chair now? [19:23:30] taimooriqbal: dep [19:23:46] nokia: IFRS 13??

[19:23:46] balbina: ? [19:24:09] taimooriqbal: amortisation .. [19:24:19] taimooriqbal: oh i m forgetting this [19:24:30] taimooriqbal: Gwill? [19:24:39] nokia: ias 37 exists??? [19:24:44] taimooriqbal: yes [19:24:56] balbina: the most common ias 37 [19:25:02] nokia: provision [19:25:06] geoklean: wow! there is something that you dont know! [19:25:06] nokia: contingent assets [19:25:12] nokia: and cont liab [19:25:18] nokia: {geoklean} i know :) [19:25:27] taimooriqbal: u r googling it [19:25:32] balbina: lol [19:25:35] nokia: so quick i m not lol [19:25:36] taimooriqbal: ias 36 [19:25:37] balbina: no point then [19:25:45] taimooriqbal: impairmebt [19:25:47] balbina: imp of assets [19:25:52] taimooriqbal: u guys were gna miss that [19:26:10] nokia: ias 26? [19:26:34] sali110: {nokia} give others to think and answer [19:26:35] sali110: time* [19:26:41] nokia: {sali110} ok [19:26:42] sali110: :) [19:27:04] balbina: :) [19:27:08] balbina: quick

[19:27:15] balbina: we dont have much time left [19:27:17] sali110: {nokia} appreciate [19:27:41] nokia: ok frds got to go now [19:27:56] nokia: bye [19:27:57] balbina: hmm [19:28:08] nokia: balbi nice to have session with u bye :) [19:28:11] balbina: ok bye nokia, thanks for participation [19:28:12] nokia: vye sali [19:28:18] nokia: bye geoclean [19:28:22] nokia: bye taimoor [19:28:25] balbina: ok lets move on [19:28:32] taimooriqbal: bye [19:28:35] balbina: very common is IFRS 5 [19:28:44] balbina: in qs [19:28:51] balbina: do u remeber that one? [19:28:54] taimooriqbal: Gwill [19:29:11] balbina: not really [19:29:24] geoklean: non current assets held for sale and discontinue operations [19:29:25] sali110: accounting for discontnued operations [19:29:32] balbina: {geoklean} 1 point :) [19:29:32] taimooriqbal: oh crap [19:29:38] sali110: {geoklean} :star: [19:30:06] balbina: ok i think everyone is tired of he game now [19:30:09] balbina: nokia won [19:30:29] taimooriqbal: :%%: [19:30:30] balbina: lets move to other parts of our p7 topiv [19:30:40] balbina: this is the best to do qs

[19:31:06] balbina: and i think we will prictice lots of qs with ias, ifrs when we cover all theory [19:31:19] taimooriqbal: ahan [19:31:42] balbina: acca also mentions such things as ISA 510 [19:31:50] sali110: give a big hand for nokia [19:32:19] taimooriqbal: which is? [19:32:31] balbina: it mostly about first year of the audit' [19:32:47] taimooriqbal: initial engagement.. [19:32:55] balbina: when we start working with new client and we need to use other auditors report [19:33:10] balbina: or its first year audit for client [19:33:14] balbina: {taimooriqbal} yep [19:33:52] balbina: what auditor can do when cannot obtain last year auditor report? [19:34:19] taimooriqbal: can audit opening balance [19:34:29] taimooriqbal: apply procedures on aopening balances [19:34:56] balbina: ok what if client says no when we want to contact client? [19:35:09] balbina: *contact previus auditor [19:35:20] taimooriqbal: discuss wid the client the importance of this .. [19:35:29] taimooriqbal: describe the effects on audit report [19:35:41] balbina: do we? [19:35:42] geoklean: think of not take the engagement [19:35:48] balbina: {geoklean} yes [19:36:09] taimooriqbal: thaTS the last stp [19:36:10] balbina: if client has some doubts or reasons not to let us contact we should resign [19:36:12] taimooriqbal: i guess [19:36:37] balbina: {taimooriqbal} may be, but the point is not to take this client [19:37:05] balbina: ISA 560 [19:37:13] balbina: subsequent events [19:37:24] balbina: its stil mixed for me

[19:37:41] balbina: hope someone explain in nice easy way [19:38:00] balbina: what do we do when smth come up before FS is issued? [19:38:10] balbina: lets say material matter [19:38:14] taimooriqbal: there r two parts to it [19:38:25] balbina: such as fire of whole inventory [19:38:32] taimooriqbal: adjusting and non adjusting events [19:38:38] balbina: yes [19:38:42] balbina: accorind to IAS 10 [19:38:51] taimooriqbal: nd there r three point of time [19:39:07] geoklean: if it is materinal then you have to make adjustments in the FS [19:39:18] balbina: {geoklean} it depends [19:39:23] balbina: on time [19:39:34] taimooriqbal: the date on which fs r authorized to issue [19:40:19] tusharacca: {geoklean} if it provides further evidence of conditions that existed at the year end then you have to adjust [19:40:52] balbina: {taimooriqbal} go on [19:41:01] geoklean: well subsequent events are events occuring and facts discovered between the period end and the date the FS are authorised for issue.. [19:41:36] taimooriqbal: {geoklean} but sum events r adjustable evn after the FS r issued [19:41:37] geoklean: thats the time [19:41:53] taimooriqbal: pervasive ion nature [19:41:57] balbina: {geoklean} yep [19:42:26] taimooriqbal: i that case u nid to ask the client to re issue the FS [19:43:08] geoklean: {taimooriqbal} how? [19:43:20] geoklean: you already sign your report and the FS are issued [19:43:33] taimooriqbal: for example a condition did not existed at the year end .. [19:43:49] taimooriqbal: bnd FS were issued unqualified [19:44:16] taimooriqbal: lets take the case of fire in inventory ..

[19:44:25] taimooriqbal: u r no longer to continue the business [19:44:30] taimooriqbal: then wut u do is .. [19:44:43] balbina: consider going concern issue [19:44:46] taimooriqbal: recall ur previous issued fs [19:44:57] taimooriqbal: ask the client to do it [19:45:03] taimooriqbal: nd then issue a new 1 [19:45:37] taimooriqbal: e,g fire, a scandle in newspaper, legislation, foriegn pressure [19:45:39] balbina: well fire could be before balance sheet date [19:45:59] balbina: more scandale, legislation [19:46:20] balbina: we could not know about it at bs date, but it could start before it [19:46:22] taimooriqbal: taking the example of after the balance sheet date non adjustable evnts which subsequently become adjustable [19:46:36] balbina: and we didnt know about effect of it yet [19:46:50] taimooriqbal: but we cannot simply ignore these [19:47:45] taimooriqbal: can a co FS show true nd fair view ( Goingf Concern) if it accidently seized its operation for ny reason watsoever [19:48:07] balbina: yep [19:48:26] balbina: in that matter we should always talk to mngt about it [19:48:40] balbina: what about auditor report? [19:48:41] taimooriqbal: wt wud we talk to mngmt ? [19:49:08] taimooriqbal: we ask them to recall the issued FS if possible nd then issue the new set of FS [19:49:09] balbina: about the matter, consider going concern issue, i they are going to change fs or not [19:49:37] balbina: ok so what we do when mngt doesnt want to change fs, while they should do so? [19:49:40] taimooriqbal: i gave u the example [19:49:51] balbina: what we can do in our report? [19:50:03] taimooriqbal: this is the case of the area reporting [19:50:13] taimooriqbal: it is described by

[19:50:29] taimooriqbal: seriousness of the issue. [19:50:35] taimooriqbal: material or pervasive [19:52:20] taimooriqbal: material the issue .. due to disagreement wid mngmnt we isue disclaimer. and pervasive the issue we seek guidance from our lawyer [19:52:45] taimooriqbal: aftr that issue qualified [19:53:34] balbina: modify the audit report [19:53:41] taimooriqbal: yes [19:53:42] hilariousastal: i guess telling shareholders in AGM that report they have is not changed an newer one is necessary. or seek legal advice or resign from audit and this depends on whether auditors have passive duty or active duty to report changes [19:54:21] balbina: and if mngt agre to change fs? [19:54:42] taimooriqbal: {hilariousastal} whenevr the effect is material or pervasive that duty becomes active [19:54:53] taimooriqbal: then u change it\\ [19:54:54] hilariousastal: {taimooriqbal} ok [19:55:30] hilariousastal: then u auditor also needs to see whether other things in FS are not changed by client [19:56:03] taimooriqbal: in case of issuing new fs .. things automatically change\ [19:56:09] taimooriqbal: hiii pllluuuuuuu [19:56:14] hilariousastal: i mean if mngmt agrees to change FS [19:57:20] balbina: and if there is going concern matter and mngt agree with us? what should we state in our report? [19:58:24] tusharacca: {balbina} then amended audit report will contain an emphasis of matter paragraph [19:58:39] balbina: yep [19:58:43] taimooriqbal: firstly remap the fs on break up basis and then i think emphasis of matter describing the issue . nd then unmodified report [19:58:50] balbina: is it modified or unmodifeid report? [19:59:01] taimooriqbal: modified [19:59:12] balbina: hmm

[19:59:14] hilariousastal: needs to see if the disclosures in respect of IAS1 are intact only then its an unmodified report+ emphasis of matter [19:59:25] balbina: {hilariousastal} yep [19:59:50] balbina: we agree that fs shows true and fair view, we just want to draw attention at going condern matter [19:59:57] balbina: unmodified [20:00:26] balbina: ok shall we move to point 4 [20:00:31] balbina: which is [20:00:40] balbina: group audits [20:00:53] taimooriqbal: isa? [20:01:03] balbina: ISA 600 [20:01:11] taimooriqbal: name [20:01:14] balbina: i ve heard that it is very examinable [20:01:21] taimooriqbal: it is.. [20:01:35] balbina: Special Considerations [20:01:40] taimooriqbal: as it caters G will, Dep, Amortisation , Coi [20:01:44] balbina: audit of group fs [20:02:07] balbina: we have group engagment team [20:02:17] taimooriqbal: hmm .. [20:02:24] balbina: and we have group engagement partner [20:02:37] tusharacca: we also have component auditors [20:02:52] taimooriqbal: it also includes. relying in the work of others [20:02:54] balbina: when client is big, and we have consolidated accounts [20:03:06] balbina: {tusharacca} yep [20:03:36] taimooriqbal: eg a foreign sub audited by other audit firm [20:03:42] balbina: so on top we have group auditor who have component auditor [20:03:49] balbina: {taimooriqbal} yes [20:04:09] balbina: component auditr reports to group auditor

[20:04:45] taimooriqbal: guys i m terribly sorry .. i hv to rush to a firends birthday .. [20:04:54] taimooriqbal: :( sorry [20:04:55] balbina: what should we focus in such big audits [20:05:06] taimooriqbal: its 11 [20:05:12] balbina: {taimooriqbal} ohhh , ok take care [20:05:21] taimooriqbal: thanks u 2 [20:05:22] taimooriqbal: tc [20:05:26] balbina: we finish group audits and we are done [20:05:32] balbina: {taimooriqbal} thank you [20:05:45] taimooriqbal: wenz the enxt tym u guys will b on? [20:05:57] balbina: next Monday [20:06:03] taimooriqbal: wott ? [20:06:07] taimooriqbal: anytym soon? [20:06:13] balbina: ? [20:06:29] taimooriqbal: whole week without studying ? [20:06:49] balbina: next session is next Monday [20:06:58] taimooriqbal: ok. [20:07:42] balbina: what kind f issues can arise when component is located abroad? [20:08:43] tusharacca: defferent local accounting systems [20:08:51] balbina: {tusharacca} great [20:09:05] balbina: other accounting policies [20:09:08] balbina: what else [20:09:09] balbina: ? [20:09:12] tusharacca: may b different laws & regulations [20:09:27] balbina: :yes: [20:09:38] tusharacca: oh btw...group auditors can't refer to component auditors in the report..as they are responsible for group audit [20:10:03] fgassita: konichiwa

[20:10:13] balbina: {fgassita} hi [20:10:23] balbina: what about language problems? [20:10:28] tusharacca: yep [20:10:38] balbina: any other? [20:10:42] fgassita: {balbina} u can undrstd japanese!!!!! [20:11:03] balbina: {fgassita} everyone knows that word :) [20:11:18] fgassita: good [20:11:44] balbina: which IFRS is common with group audits? what can we serch for? [20:12:24] balbina: IFRS 3 what is about? [20:13:37] balbina: :? [20:13:58] balbina: GOOODWILLLL [20:14:06] geoklean: business combinations [20:14:08] geoklean: ? [20:14:11] balbina: Non controlling interest [20:14:19] balbina: {geoklean} :star: [20:14:25] balbina: great [20:14:51] balbina: What is joint audit? [20:15:45] tusharacca: 2 audit firms share an audit [20:15:55] balbina: yep :) [20:16:05] tusharacca: and both sign audit report :D [20:16:10] balbina: but please be more specific [20:16:13] balbina: yesss [20:16:22] balbina: this is what i was thinking about :)))))) [20:16:37] balbina: they have both responsibility [20:16:45] fgassita: who is liable for mm? [20:16:53] balbina: mm? [20:17:04] balbina: material mistatement?

[20:17:05] fgassita: material misstatement? [20:17:15] balbina: mngt [20:17:32] fgassita: not both auditors? [20:17:58] balbina: auditr is liable for auditor report [20:18:03] tusharacca: Auditos are not responsible for mngt mistakes [20:18:03] balbina: not fs [20:18:32] fgassita: ok ok [20:18:49] balbina: okey dokey [20:19:13] balbina: we finish for today [20:19:20] balbina: thank you for participation [20:19:30] tusharacca: :) [20:19:50] balbina: next session 6 will cover topics [20:19:52] balbina: E Other assignments 1. Audit-related services 2. Assurance services3. Prospective financial information4. Forensic audit [20:21:09] balbina: maybe 5 and 6, internal audit and outsourcing [20:21:32] balbina: thank you and have a nice week [20:21:54] tusharacca: {balbina} take care :) [20:21:56] balbina: see you on session 6 Monday 7th Oct 6pm uk