Hello

Can any help me please?
I am struggling to understand the different in between inherent risk at the account balance and class of transaction level, how can you identify them? and what factor should i consider for their assessment?

Many thanks

Haha

Dear Haha,


INHERENT RISK:-

Inherent Risk is the Likelihood of a Material Mis-Stament in the
a)account balance
b)Financial Statement as a Whole...


Examples Of Inherent Risk at Account Balance Level..

1)Assets which can be easily mis-appropriated like Cash, and Inventory...

2)Accounts which require need for an expert like in oil, Gas, Gold industries etc...

3)Accounts which require Judgement, And Estimation, And Provisions like Provision For Doubtful Debts, Provisions for Obsolete Stock etc etc...

Example Of Inherent Risk at Financial Statement Level...

1)Fraudulent Management...

2)Incompetent Management...

3)Volatile Industry like computer Industry...

4)Over all business like risks like decreasing trend in sales and profits...



Regards,

Muhammad Amir.

You are a genius!

Thank you.

hi mr Muhammad Amir,

I've been seeing your comment everywhere and anywhere. ur message had appear in many many many forum and u had argue with many many many many many people over a very very very long period of time.I really saw your message in quiet a few forum and saw you arguing with people about the valuation of acca and held the conviction that acca is a world number 1 qualification where no other qualification can beat acca . i know u support acca and as a student i also know that this a a very good qualification. But i only got one question to ask you. What is your occupation? i saw alot of your message and to be honest ur advice are alway correct. But i wish to know how come your have so much time to be online and keep replying to everybody. i was thinking that you may be jobless but with many qualification under your belt or u must be a rich man son or u are a self made millionaire who just do not need to work but reply to forum question...

i'm not insulting u in anyway and i really appreciated that your advice help many people i use ur advice for some question too.
i just wish to know what exactly are you doing. are u working.... or... teaching or... just doing nothing.. or just too rich to work?
pls continue to post helpful advice to help student like us.

hi i think to indentify inherent risk maybe can try this

P ---> pressure on mgmt to perform well (especially due to listing requirement)therefore may resort to creative accouting
I----> Integrity of mgmt .. if they have a history of ( eg tax problem ) then audit risk increase--
E----> extent of operation... the more are or more intense of biz operation the more complex the biz. risk increase


C-->Complexity of business - - - more complex the biz. more risk or M M
T---? Techology company? tecnology more very fast. someone may just invent a breakthrough product and put ur product out
of market and affect the going concern of the biz
E---> experience and expertise of mgmt... if director hire personal friend as bogus finance director then risk increase
the fellow sure make mistake in accounting policy and estimation..also control environment is weak la. becos mgmt does not commit to competence requiremtn.

V--->volume of transaction---- if increasing expansion and internal control or system unable to cope--then risk again
C---> complexity of calculation---> if mgmt have very complex method of calculating dep, payroll or etc etc.. then risk of
mm again
D---. desireable portable asset----> if diamond, cash or consumable are the main inventory then danger of pilferage by staff.


above are all inherent risk.. this list is by my genious lecturer. hope can help everybody

Geyser

Thank you.

I'm wondering how would you form an answer when asking to collect your evidence? if i say

"Obtain invoice from account clerk and check with system to ensure they are correctly posted"

Is that suppose to be right?

dear haha


did u attend lesson? for every type of system they got different prodecure.. but those are general procedures.
but base on general procedure which u were taught in classroom. try to apply to the scenario.
but sometime really brain block cannot think.. i suggest u take out bpp kit and wack "audit evidence" section. and refer to examiner article on " sales" system on the first few part of bpp kit.. anyway this F8 is damn bloody a as practical as possible paper i think really very difficult. now left 10 days only. dun keep on asking too much liao. wack the bpp kit. as much as u can. to come up with audit procedures step need to keep on practise and pracctise.. looking at book cannot learn one. i almost finish the whole kit . and my friend say i have better chance of passing. but the truth is after i do those question i'm more afraid and lesser confident to pass becos some question i really duno wat to write.. becos i come to understand that tis paper very very practical and it really help if u are an auditor. but as i say just wack wack wack the revision kit. wack until u forget ur name.

i belive those can memorise one u already memorise liao. the only hinder is those bloody procedures.

Dear GEYSER,

I am just wondering in what perspective should i percieve your questions?

Anyway, answers of your questions are as follows.



I am just a student of "Professional Level" of ACCA currently enrolled for P1 and P2 papers and will be appearing it in June 2008.



I can refer you so many qualified professionals and even Audit partner of Firms who are much more active than me in other forums so it all depends on ones efforts and his hardwork with devotion. Professional Development comes through interaction with people from varied professional frameworks and it is not only polishes ones approach to profession but also it reveals so many things to us.



Neither i am jobless nor i am a son of rich man. As i have already told you that i am just a student of Professional Level and so i do not need to waste my precious time in 9 to 5 schedual nevertheless once i have completed my Professional Level exams i would certainly join Audit firm for acticles. In my opinion self made millionaires do not have so much time to reply on forums and do a tough job like ACCA.



Neither working nor Teaching but i am not an idle man, I wish i would be a teacher although i have taught so many friends in past.


I hope everything has been answered upto your desires!

Regards,

Muhammad Amir

" In my opinion self made millionaires do not have so much time to reply on forums and do a tough job like ACCA. "


millionaire dun need to do acca. they hire acca and make them work for him.
[/u]

Geyser

You make Muhammad Amir disappeared from the web now!! It's all your fault

To have him on the website and help out others like me is the benefit, what have you done!

Muhammad Amir, don't disappear, please re-surface, plenty of us here would definitely require your knowledge in the future sitting.

Haha

sorry i did'nt mean it.. hey i just talk sense what.. no la Muhammad Amir is sensible guy. he'll understand i dun mean to argue with him la..or insult him.. dun worry. he's a nice guy. so helpful..

I would imagine that he's revising so hard he doesn't have time to come on here, I bet he'll be back after Tuesday!!

bluewednesday , how was ur exam?? and which papers are you planning to give now???

Haven't taken any yet! I'm taking P2 and P3 this time and if I pass those - that's it!!! I did the optional papers before the syllabus change.

Oh! Wonderful ! You must be very happy then!

Which materials would you recommend me now for P2 and P1 and P3 ? I gave F7 , 8 , 9 this session and do you think giving P1 , 2 , 3 is a wise choice?

I think you will find quite a step up between p papers and f papers, you might want to consider only doing 2. I think it is would be a good idea to ask Muhammed Amir this as I think he did 3 f papers together and was going to try P1,2 and 3. (I hope that's okay Muhammed Amir)

As for materials, I can't really say, I did have FTC and BPP books for P1 but only used BPP for P2 and P3 as I did courses for these. If courses are an option, I would recommend it definitely for P2 as it's quite an extensive syllabus.

Good luck whatever you decide.

thanks!

I'll rather wait till result to decide if i should give 3 papers or 2 of them . till the result I'll prepare only for P1. Why did you use BPP for P1?? Is that thicker then kaplan?

I do my courses with BPP, I only bought the FTC book as they had just launched engage. It was difficult as I would say BPP were much better on the corporate governance stuff whilst FTC was better for the ethics and risk. Maybe you can pick up an old copy of one of the books.

Do you do courses or is it all homestudy? If you home study I would recommend taking P2 on it's own, its a very big syllabus and quite technical. If I had my time again I would have done P2 last December and then P1 and P3 now.

Thank you bluewednesday!

I do all home study!!! Are you saying that I sould so P2 bpp?

Unfortunately I couldn't say because I only used BPP I don't know what FTC books are like for this subject. However there is always a lot of people getting through using either book so I think it really doesn't matter, if you don't do the work it doesn't matter which book you will use - you won't get through, likewise if you do the work you'll get through regardless of which book you use.

Don't Get Through Guides do P paper books, why aren't you using those?

Very politically right. :lol:

Acid

Im quite interest to know whether get through guide books are good because im using FTC and BPP, want to know if some other better out there.

Haha

I was not at all offended by geyser's post.



Yes i am back now.

For P-Series attempt i would say that there is a vast difference between F-series and P-series papers, One can attempt 3 or even 4 papers from F-Series but it is so difficult to do 3 or 4 paper in P-Level.

If i give you my example I attempted 2.1,2.2 and 2.3 in June 07 then F7, F8 and F9 in Dec 07 and now only P1 and P2 and i believe these are the worse papers i have ever attempted, i studied P2 for whole session and aided my studies with almost 4 different IFRS(Standards Interpertation and Work books) books and i was almost griped(IAS-32,39,19,12,24,36,38; IFRS-2,5 and standards and mechanics of Consolidation) Standrds requirements for SMEs but still i am not confident that i will pass P2 because the topics that I left because of their rare examinability and are relatively easier were extensively examined and every thing went worng for me on 10th June, when I was driving towards the exam center i was very happy that i have almost done every complex topic but when i started writing paper i was so disappointed.

So its better to study each and every thing of the paper because any thing could be examined.

Regards,

Muhammad Amir.

Muhammad Amir (I was not at all offended by geyser's post. ) see guy i told u he's a nice guy...


anyway anybody studies P3 in singapore? may i know which lecturer teach slow and steadily and is patient enough to answer every private question student ask and not show a stuck up face?

Muhammad Amir-- u took F7 in dec 07? same.. but dun u think that sitting first question the examiner show very great kindness. there was no hard adjustment. but i remember there is a last question which i believe no 1 will know how to do... and everybody was expecting cash flow question to come but full ratio came out.

i suspect that the last question was purposely set in a way no 1 can answer so that there is no choice but to attempt ratio question.

P3 they say andy from SAA is good

lilian78,

when "they" say good ,what does it mean? is he special in someway? maybe u can try to elaborate more on his style of teaching.??? thank you