DS-CO1-2301E-PC02.FG=RC+RC+C+RC+RC

xlsx

School

Quaid-e-Awam University of Engineering, Sciences & Technology, Nawabshah *

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Course

LQB185

Subject

Accounting

Date

Nov 24, 2024

Type

xlsx

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Uploaded by dhandeepthiara

Core 1 — Practice Case 2 Ref. Minimum Proficiency Indicator (MPI) Description CPA Way N/P/Y Feedback 1 Situation Y 2 Analyze Y 3 — each party's rights Analyze Y 4 — payment terms Analyze Y 5 — commercial substance Analyze P 6 — collectability Analyze Y 7 Concludes as to WHEN the revenue should be recognized, consistent with analysis Conclude Y 8 Conclude P NA The candidate does not address this assessment opportunity. RC NC The candidate does not meet the standards for reaching competence. RC C CD 1 Situation Y 2 Analyzes the criteria regarding distinct performance obligations in relation to case facts Analyze Y 3 Analyze Y 4 Analyzes the allocation of the purchase price between performance obligations Analyze Y 5 Analyze P 6 Concludes as to how the RentPoints should be recorded, consistent with analysis Conclude Y 7 Conclude Y NA The candidate does not address this assessment opportunity. RC NC The candidate does not meet the standards for reaching competence. RC C CD 1 Situation Y 2 Analyze Y 3 Concludes whether inventory should be written down to NRV, consistent with analysis Conclude Y 4 Conclude P NA The candidate does not address this assessment opportunity. C NC The candidate does not meet the standards for reaching competence. RC C CD 1 Analyze Y 2 — financial statements used by the bank to assess the bank loan Analyze Y 3 — new programs initiated during the year Analyze N 4 — long-time client with no history of issues Analyze N 5 — existing financial reporting errors Analyze N 6 — multiple new locations Analyze N 7 — other valid financial statement risk Analyze N 8 Concludes on risk of material misstatement (RMM) at the overall financial statement level (OFSL) Conclude Y NA The candidate does not address this assessment opportunity. RC NC The candidate does not meet the standards for reaching competence. RC C CD 1 Analyze Y 2 Identifies the users objectives Analyze Y 3 Determines an appropriate basis for materiality Analyze P 4 Analyze P 5 Analyze N 6 Calculates materiality on a reasonable basis Conclude N 7 Concludes on the approach that will be taken for the audit engagement (supported) Analyze P NA The candidate does not address this assessment opportunity. RC NC The candidate does not meet the standards for reaching competence. RC C CD Y Overall Feedback AO1 (Financial Reporting — No Late Fees program ) Identifies the financial reporting issue IFRS 15 You were assessed at RC for this assessment opportunity. Good attempt identifying valid criteria and correctly discussing most of them in relation to the case facts. To improve to C on future cases, ensure you are discussing all valid criteria in relation to the case facts and correctly conclude for each one if it is met or not met that is based on the case facts. For example, revisit MPI 5 as the steps to reach to the recommendation needs to be more strengthened. Analyzes the criteria for identifying a contract in relation to case facts: — parties have approved the contract Discusses the impact of the adjustments on the financial statements and their impact on the bank and the bank's concern with profitability The candidate attempts to discuss the accounting treatment for the revenue related to the No Late Fees program ( Yes on 3 MPIs OR Partial on 5 MPIs ). The candidate discusses the accounting treatment for the revenue related to the No Late Fees program, including a conclusion ( Yes on MPIs 1-7 ). The candidate thoroughly discusses the accounting treatment for the revenue related to the No Late Fees program, including a conclusion, and the impact of the issue on the financial statements, the bank, and the bank's concern with profitability ( Yes on all ). AO2 (Financial Reporting — RentPoints ) Identifies the financial reporting issue IFRS 15 You were assessed at RC for this assessment opportunity. You did a great job of applying IFRS 15 in your discussion using case facts to show how this applied to this specific situation. Good job including a useful conclusion on how the RentPoints should be treated. Nice work also discussing how this would impact the financial statements and the bank. To improve you response to C, ensure you are correctly calculating the number of points using the case facts around $0.50 in your analysis. Analyzes the definition of a performance obligation and whether the RentPoints reward program represents a distinct obligation Calculates the number of points still outstanding at year end based on revenue for the year and points redeemed Discusses the impact of the issue on the financial statements and its impact on the bank and the bank's concern with profitability The candidate attempts to discuss the accounting treatment for the revenue related to the RentPoints reward program ( Yes on 2 MPIs OR Partial on 4 MPIs ). The candidate discusses the accounting treatment for the revenue related to the RentPoints reward program, including a conclusion ( Yes on MPIs 1-6 ). The candidate thoroughly discusses the accounting treatment for the revenue related to the RentPoints reward program, including a conclusion, and the impact of the issue on the financial statements, the bank, and the bank's concern with profitability ( Yes on all ). AO3 (Financial Reporting — Previously worn costumes ) Identifies the financial reporting issue IAS 2 You were assessed at C for this assessment opportunity. You were not only able to identify that an inventory valuation issue might exists, but you also assessed whether it should be valued at the lower of cost and NRV. You also recommended that the inventory should be written down. Good job a conclusion is imperative to any discussion (tax, accounting, assurance etc.), after your analysis you must conclude - otherwise no mater how well you wrote you will not get "C". To achieve CD on future cases, ensure you are also providing correct calculation using the case facts as your resulting numbers were slightly off. Please take a look. Analyzes that inventory must be carried at the lower of cost and NRV criteria, in relation to case facts Discusses the impact of the issue on the financial statements and its impact on the bank and the bank's concern with profitability The candidate attempts to discuss the accounting treatment of the inventory of previously worn costumes ( Yes on 2 MPIs OR Partial on 3 MPIs ). The candidate discusses the accounting treatment of the inventory of previously worn costumes, including a conclusion ( Yes on MPIs 1-3 ). The candidate thoroughly discusses the accounting treatment of the inventory of previously worn costumes, including a conclusion, and the impact of the issue on the financial statements, and the bank's concern with profitability ( Yes on all ). AO4 (Assurance — Overall financial statement risk assessment ) Discusses a valid risk factor: ( Yes includes what the risk factor is (case fact) and WHY it is a risk.) — rapid expansion You were assessed at RC for this assessment opportunity. Good job at providing a risk assessment noting why each risk was important and if it increased or decreased risk of material misstatement. This is what your users are looking for, so what? Good work clearly concluding on the overall RMM. To improve to C for this type of AO on future cases, ensure you are discussing more factors as they were many case facts given that can be discussed under this AO to provide a complete discussion. A review of risks of the Audit and Assurance eBook may be helpful. The candidate attempts to assess the overall financial statement risk by discussing some of the risks factors ( Yes on 3 MPIs OR Partial on 4 MPIs ). The candidate assesses the overall financial statement risk by discussing some of the risks factors and concludes that the RMM is moderate or high ( Yes on 4 MPIs including MPI 8 ). The candidate assesses the overall financial statement risk by discussing several of the risks factors and concludes that the RMM is moderate or high ( Yes on 6 MPIs including MPI 8 ). AO5 (Assurance — Materiality and approach ) Identifies the users of the financial statements You were assessed at RC for this assessment opportunity. You identified the users of the F/S and their objectives. Further to this, you needed to correctly identify the basis for materiality such as net income which is a good indication of cash flow for which the bank is concerned about debt repayment. Considering there were errors in the statement, you have to see how this will impact your calculations elsewhere. Integration is very important. You should be able to connect the dots across the AOs to provide a cohesive analysis. This depth was needed to get to C. In addition to improve to C for this type of AO and as a future CPA, you also need to add depth in the discussion of audit approach to give an example of how would you test the controls to your user. This approach will help you add depth. Remember, technical and case facts go hand in hand. Determines an appropriate percentage threshold for materiality (3% - to 7%) Adjusts pre-tax materiality base for accounting or normalizing adjustments The candidate attempts to calculate materiality and attempts to discuss the approach for the engagement ( Yes on 3 MPIs OR Partial on 4 MPIs ). The candidate calculates materiality and discusses the approach for the engagement ( Yes on 4 MPIs, including MPIs 6 + 7 ). The candidate accurately calculates materiality and discusses the approach for the engagement ( Yes on all ). Communication — The candidate prepares a response that is logically organized with good use of headings and bullet points. The response is professional in tone and sufficiently readable in terms of spelling, grammar, punctuation, and acronyms/abbreviations. Memo to Engagement Partner Your response was sufficiently readable in terms of spelling and grammar. Good job using the headings and sub-headings to separate the issues and bullet points to highlight key areas. This makes it easy for your user to follow your work. Good that you used memo format to meet your case required. You stayed within the limit of 1800 words and I hope you were able to complete your response within exam like condition. If not, no problem as you will get better with each passing week with more practice. However, your discussion of materiality and approach lacked depth. Please ensure you are very familiar with the technical and case facts to add depth in your analysis. Continue to write practice cases in the exam like condition. This practice is invaluable.

Continue to write practice cases in the exam like condition. This practice is invaluable. Continue using the CPA way of analysis i.e. issue ID, analysis (technical + case facts) and recommendation. Make sure to debrief and make 'take away' notes which are not case specific to help you for the next PC you'll be writing.

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