[19:01:30] balbina: hi guys :) [19:01:54] balbina: r u ready to start study session?

[19:01:56] geoklean: hello [19:02:25] clearstock: :d [19:02:55] balbina: more people :) [19:02:57] geoklean: there is noone here yet... [19:03:03] balbina: just 4 of us [19:03:16] mohammedalee: hello [19:03:22] balbina: {mohammedalee} hi [19:03:34] mohammedalee: how are you folks [19:03:43] balbina: Monday :) [19:03:44] mohammedalee: all p7 guys? [19:03:52] balbina: 4 days left to the weekend :) [19:03:56] mohammedalee: lol [19:04:06] mohammedalee: funny [19:04:12] balbina: its my first attempt [19:04:14] mohammedalee: thats like saying after 2 hours, 5 hours will elft [19:04:15] mohammedalee: :D [19:04:20] mohammedalee: left* [19:04:24] balbina: did you try to pass p7 before? [19:04:29] mohammedalee: oh great, lovely, high hopes then [19:04:40] mohammedalee: im affiliate, im just here to support you guys [19:04:45] balbina: great [19:05:12] brithel1: thanks for being here with us mohamedalee [19:05:17] balbina: so whats the secret of passing p7 in your opinion? [19:05:25] mohammedalee: i used to be a big fan of p5 [19:05:40] mohammedalee: well umm

[19:05:45] balbina: i m waiting for p5... [19:05:48] mohammedalee: just work smart [19:05:56] balbina: and hard :) [19:06:05] mohammedalee: like read around, technical articles, examiner reports [19:06:14] mohammedalee: exam kit, just do everything in your capacity [19:06:19] geoklean: balbina you are the one who arrange this session? [19:06:26] balbina: {geoklean} yes [19:06:27] mohammedalee: and most importantly, write out answers in full [19:06:29] brithel1: just keep answers as short and straight to the point as possible [19:06:34] mohammedalee: thats the best technique i can give you [19:06:53] mohammedalee: when practising [19:06:54] brithel1: thanks mohamed [19:06:57] balbina: {mohammedalee} and give your mock exam to check, right? [19:07:05] mohammedalee: keeping them short isnt a good idea [19:07:09] brithel1: i ended up with a 47% last session [19:07:15] mohammedalee: check yourself, or give your friend to check [19:07:41] brithel1: because i wrote and wrote and wrote [19:08:07] brithel1: thinking i was writing the right things [19:08:16] mohammedalee: lol [19:08:21] mohammedalee: heres what u shud do [19:08:27] mohammedalee: take a past paper [19:08:40] mohammedalee: write out answers in full, then mark it using the marking scheme at the end of past paper [19:08:47] mohammedalee: compare it with ideal answer, see where u are lakcing [19:08:48] mohammedalee: lacking [19:09:26] brithel1: why the quietness in the room? [19:09:48] balbina: mohamed is giving us best practice [19:09:54] brithel1: ok

[19:09:55] mohammedalee: :D [19:10:05] balbina: shall we start the study session? [19:10:05] mohammedalee: so [19:10:11] mohammedalee: you guys should be starting by now [19:10:23] brithel1: yes [19:10:31] agodirin: Hi everyone [19:10:33] brithel1: we should start now [19:10:42] brithel1: hi agodrin [19:10:42] balbina: i arranged the study session because of the lack of it [19:11:00] balbina: i m not moderator but i tried to push you to start it [19:11:16] balbina: so i suggesed to follow the syllabus [19:11:21] agodirin: is it 6pm now. I thot we said 6pm [19:12:01] balbina: so for today it is [19:12:05] balbina: A Regulatory Environment 1. International regulatory frameworks for audit and assurance services 2. Money laundering 3. Laws and regulations [19:12:07] sarmadgul: HI all.. [19:12:12] balbina: hi bubblygirl :) [19:12:33] agodirin: Hi sarmadgul [19:12:33] balbina: {sarmadgul} hi [19:12:36] bubblygirl: {balbina} hellooo [19:13:07] balbina: we just started [19:13:14] sarmadgul: great [19:13:16] sarmadgul: so yeah lets starts then [19:13:27] bubblygirl: sorry was bzy wid packing [19:13:27] balbina: 1. International regulatory frameworks for audit and assurance services

[19:13:31] bubblygirl: hows its going [19:13:36] balbina: {balbina} great you are here :) [19:14:00] balbina: i guess we need to know some basic in p7 [19:14:12] sarmadgul: ahaan [19:14:35] balbina: what kind of organisations do we know? [19:14:58] balbina: dont be shy :) [19:15:05] balbina: its for us [19:15:21] agodirin: {balbina} i don't get ur question [19:15:25] sarmadgul: Go a head Balbina.. [19:15:46] sarmadgul: Iam sure every one will feel comfortable as we move on [19:15:51] balbina: what is IFAC? [19:16:15] agodirin: International Federation of Accountants [19:16:20] balbina: great! [19:16:51] brithel1: i guess u are trying to say that IFAC is one of the regulatory bodies [19:16:59] sarmadgul: Its all about discussion or we should refer any book? [19:17:17] agodirin: it abt discussions [19:17:21] balbina: {sarmadgul} no reference [19:17:25] balbina: its our discussion [19:17:27] bubblygirl: main global body for accounting profession [19:17:33] balbina: {bubblygirl} yep [19:17:37] sarmadgul: Alright [19:17:56] bubblygirl: nd ACCA is a member [19:18:05] agodirin: yes [19:18:05] balbina: what other organisations do you know except IFAC? [19:18:29] bubblygirl: IASB [19:18:52] agodirin: International Accounting Standard Board [19:19:04] bubblygirl: they write IFRS

[19:19:10] bubblygirl: IAASB [19:19:12] balbina: great [19:19:15] bubblygirl: write ISAs [19:19:38] balbina: ISA international audit standards [19:19:55] balbina: our new favorite standards in p7 paper :) [19:20:10] sarmadgul: hmmm [19:20:24] balbina: lots of isa in our paper [19:20:31] brithel1: favorite standards? [19:20:43] brithel1: are there any that are favorite? [19:20:58] brithel1: all are traumatising [19:20:58] balbina: in this paper brithel1 :) [19:21:09] brithel1: aspecially that on employee benefits [19:21:11] mohammedalee: gota love them if u have to pass :D [19:21:11] balbina: we need to love them to pass p7 [19:21:19] balbina: {mohammedalee} right :) [19:21:25] geoklean: lol [19:21:28] sarmadgul: Do we have to quote the reference of Isa's in exams? [19:21:29] mohammedalee: stole my words! [19:21:31] brithel1: right [19:21:34] brithel1: i agree [19:21:36] mohammedalee: no [19:21:42] brithel1: we need to love them [19:21:52] agodirin: most IAS are relevant here [19:21:53] fgassita: {mohammedalee} are u dead serious?? [19:21:53] brithel1: i will try to love them [19:21:54] mohammedalee: {sarmadgul} but you can use them for a strong technical answer [19:22:08] sarmadgul: ok

[19:22:11] mohammedalee: like, according to IAS 17, bla bla, this will your answer more presentable [19:22:39] sarmadgul: Good with IAS not with the ISA's [19:22:44] bubblygirl: hey hilarious [19:22:56] mohammedalee: and there are usually some marks for only stating what the standard says, so lets say if there is a quesiton on borrowing cost and you dont know the treatment, just write out what borrowing cost's criteria is [19:23:00] mohammedalee: alright guys carry on. [19:23:29] Zlip792: {sarmadgul} Yes, we need to quote IAS relevant applicable in question as well as ISA also [19:23:37] balbina: what pther international standars can IAASB can set? [19:24:04] balbina: anyone knows? [19:24:23] hilariousastal: {bubblygirl} hey i hope no session is in progress is it? [19:24:23] sarmadgul: Not me [19:24:53] balbina: ISA, ISRE ISAE ISRS IAPS [19:25:06] bubblygirl: {hilariousastal} u r in session;p [19:25:15] hellohowlowlo: can u plz all calm down [19:25:23] hellohowlowlo: stop writing and start session [19:25:32] hilariousastal: {bubblygirl} :o [19:25:45] hellohowlowlo: geoklean, get on blackboard, u're the teacher for today [19:25:46] fgassita: who is the leader here?? [19:25:51] sarmadgul: which session? hellohowlowlo: [19:25:53] balbina: {sarmadgul} me [19:26:06] mohammedalee: work as team [19:26:19] balbina: can anyone explain me what it means? [19:26:25] balbina: ISA, ISRE ISAE ISRS IAPS [19:26:36] hellohowlowlo: {balbina} we're not interested in all that [19:26:45] hellohowlowlo: ISA is enough [19:26:47] agodirin: Are we not in a session already? [19:26:49] mohammedalee: {hellohowlowlo} then sit quiet plz

[19:27:08] balbina: isnt good to know? [19:27:14] mohammedalee: let the lady follow her plan [19:27:30] agodirin: U also need to know ur Accounting Standard very well [19:27:31] aarsh: {balbina} u need to pick topic on which u can discuss [19:27:56] hilariousastal: yes i agree .. otherwise it will be a 'fish market' ... lol [19:28:02] fgassita: {balbina} section one chapter one......start [19:28:06] balbina: our topic is [19:28:07] balbina: A Regulatory Environment 1. International regulatory frameworks for audit and assurance services [19:28:09] sarmadgul: aarsh: scroll back please, we have already slected a topic [19:28:21] balbina: its our topic now [19:28:33] fgassita: {balbina} ok leader ask your questions [19:28:34] balbina: so we are about to set our organisations [19:28:35] aarsh: {balbina} i didnt study this chapter to pass [19:28:52] balbina: so we know what IFAC and IAASB are [19:29:04] mohammedalee: {aarsh} either let the lady lead or you get in the lead. [19:29:15] balbina: and the main info is IAASB set up ISAs which we need to cover in details in P7 [19:29:37] sarmadgul: hmm right [19:29:59] balbina: so what other standards IAASB set up? [19:30:14] balbina: I better use red :) [19:30:43] balbina: ISA, ISRE, ISAE, ISRS, IAPS [19:31:14] geoklean: {balbina} sorry..but u already cover that...i think u have to move on please.. [19:31:22] hilariousastal: well there are various standards set by them like on sampling and intitial understadning of the entity and risk assessment etc [19:31:25] balbina: ISA international standards od auditing [19:31:50] hilariousastal: and some on audit evidence [19:31:58] balbina: ISRE International Standards on Review Engagements [19:32:03] sarmadgul: Babliba: And I guess this was something covered in shapter 2 of F8 BPP text

[19:32:13] sarmadgul: Balbina* [19:32:45] hellohowlowlo: can u plz erase the board [19:32:50] balbina: {sarmadgul} well if we all knew f8 perfect we could skip half of our study sessions [19:33:28] sarmadgul: Go a head Balbina :) [19:33:33] balbina: so ISRE is used in engagements [19:33:54] balbina: ISAE - int standards on assurance engagements [19:34:15] balbina: ISRS international standards on related services [19:34:16] hilariousastal: {balbina} thts is right to some extent bt since i am attempting it second i can assure you that this wont help much cuz the type of questions are quite detailed at p7 level [19:34:38] aarsh: {hilariousastal} u r right [19:34:41] aarsh: :) [19:34:50] Zlip792: {balbina} I barely managed to pass F8 [19:34:59] Zlip792: {balbina} So don't expect we know... LOL! [19:35:00] hilariousastal: {aarsh} :) [19:35:25] balbina: so i see we better cover all topics [19:35:32] balbina: so everyone have the same basic [19:35:34] Zlip792: {balbina} Review Engagement is another kind of Assurance Engagement, am I right? [19:35:44] brithel1: yes [19:35:55] Zlip792: {Zlip792} You answering to my question? [19:36:00] balbina: kind of assurance [19:36:08] Zlip792: {balbina} Thanks [19:36:29] balbina: ok somethin what all should know from f8 [19:36:40] balbina: what is audit committee? [19:36:43] agodirin: I think what we should be talking abt at this stage is what each standards contain. We all know the standards exist. [19:36:43] hilariousastal: {Zlip792} bt its not covered at F8 level so dont worry it wil be in detail at p7 [19:37:23] balbina: its also part of p1 as i remember [19:37:27] Zlip792: {hilariousastal} I am attempting P7

[19:37:28] bubblygirl: {hilariousastal} :yes: [19:37:32] Zlip792: {hilariousastal} Cleared F8 [19:38:01] balbina: so please let me know what is audit committee? [19:38:30] hilariousastal: audit committe is a committe responsible for dealing with issues of external and internal audit [19:38:33] bubblygirl: audit committee , money laundering ,laws nd reg will b detail in p7 [19:38:44] agodirin: An audit committee is set up by the board. and consist of non-executive and executive directors. At least 3 non-executive directors [19:38:44] Zlip792: {balbina} Board committe which evaluate yearly whether there is need for Internet Audit department or not, and also answer to liasion between External and Internal [19:38:52] hilariousastal: as well as issues of financial reporting [19:39:00] balbina: ok [19:39:08] balbina: who can be in AC? [19:39:11] Zlip792: And it also look forward complain from Internet Audit Department regarding system [19:39:13] balbina: audit committe [19:39:14] hilariousastal: and if there is nt separate risk committe it is also responsible for riskmanagement and internal control [19:39:16] Zlip792: {balbina} All NEDs [19:39:26] Zlip792: {balbina} Minimum 3 for PLC, 2 for PVT [19:39:27] balbina: {Zlip792} yep [19:39:31] fgassita: {balbina} chairman.....NEC [19:39:48] balbina: chairman? [19:39:48] hilariousastal: yea with atleast One havign latest Financial reporting knowledge [19:39:58] fgassita: chairman [19:40:14] Zlip792: {balbina} Audit Committe can be made of INED or NED? Can you clear me? [19:40:47] balbina: {Zlip792} NED [19:41:04] brithel1: it is made up of only non executive directors [19:41:07] balbina: Non executive directors

[19:41:20] Zlip792: {Zlip792} So not restriction on their independence thingy, like there used to be some points for independence in P1 [19:41:21] balbina: NED are independent [19:41:33] agodirin: executive and non executive directors. [19:41:45] geoklean: *is typically made up only independent NEDs [19:41:47] agodirin: at least 3 non-executive directors [19:42:10] balbina: ok so what are the main roles of audit committee? [19:42:16] Zlip792: {agodirin} In Public Listed Company, for Private Limited 2 works [19:42:20] balbina: you wrote some of them already [19:42:28] Zlip792: {balbina} Listening to Internal Audit Dept complains [19:42:31] Zlip792: regarding system [19:42:33] agodirin: 1. elect the auditor [19:42:36] balbina: 1 [19:42:44] balbina: 2 [19:42:46] agodirin: review the work of auditor [19:42:51] Zlip792: {Zlip792} 1. Short list External Auditor and suggest [19:43:04] Zlip792: {agodirin} External Auditors are elected by "Shareholders" [19:43:09] agodirin: fixing the renumeration of the auditor [19:43:20] Zlip792: {balbina} 2. Create liasion between External and Internal Auditors [19:43:21] hilariousastal: reviewing the work planes of auditor for the year [19:43:27] balbina: {Zlip792} yes AC only helps to appoint auditors [19:43:29] fgassita: {agodirin} which auditor????internal or external? [19:43:32] balbina: {hilariousastal} yes [19:43:35] geoklean: AC is not electing the auditor..is suggesting an auditor [19:43:50] hilariousastal: to create independent channel of communication with board for external and internal auditors [19:44:00] agodirin: external [19:44:03] balbina: {hilariousastal} yep

[19:44:10] Zlip792: Why others are not coming up and answering [19:44:47] balbina: {Zlip792} its ok, maybe they are not feeling comfortable yet, i hope they finally speak up [19:44:58] balbina: ok i think we mentioned all roles of AC [19:45:02] sarmadgul: Zlip792: Beause we know you are smart enough to answer these :) [19:45:10] agodirin: some people learn by reading what other write. its ok [19:45:22] Zlip792: {sarmadgul} Flattering... LOL! [19:45:43] Zlip792: {balbina} Yeah, now move on to next thing... [19:46:11] ratimrigs: {fgassita} hey [19:46:11] balbina: can AC have any infulence on risk msnsgement proces of company? [19:46:34] sarmadgul: Yes they do [19:46:38] balbina: or financial reporting? [19:46:40] Zlip792: {balbina} I think Yes... They ask Internal Audit dept to design Control System to overcome risk [19:46:44] sarmadgul: Both! [19:46:45] agodirin: yes [19:46:55] balbina: ok great :) [19:47:08] hilariousastal: yes by means of internal audit staff it could exert its infuence and espeically if there isnt a separate risk managment committe [19:47:09] Zlip792: {balbina} Not much on Financial Reporting I think, management prepare them, audit team can't influence, if they can you explain please [19:47:30] hilariousastal: cuz auditors have the function of risk managment and internal control [19:47:33] sarmadgul: They are resposible to submit a report to share holders for the risk managemnt process undertaken [19:47:35] balbina: {Zlip792} AC may oversee it [19:47:39] Zlip792: {Zlip792} I mean audit committe [19:47:46] Zlip792: {balbina} Yeah, sorry I forget that [19:48:07] Zlip792: {balbina} Just clicked my mind after reading your comment, thanks [19:48:10] balbina: {Zlip792} management need to prepare fin stats as you wrote

[19:48:12] hilariousastal: and also it can resolve issues in Financial reporting if there are any raised by external auditors [19:48:29] balbina: ok great guys [19:48:30] balbina: :) [19:48:36] balbina: we are all warmed up :) [19:48:39] balbina: next topic [19:48:42] balbina: 2. Money laundering [19:48:47] balbina: what is that? [19:48:58] sarmadgul: dealing with criminal proceeds [19:49:02] Zlip792: Black money to white money [19:49:06] Zlip792: In layman terms [19:49:26] Zlip792: {balbina} Covering up your criminal proceeds in layers of transaction [19:49:26] sarmadgul: E.g. tax evasion [19:49:28] balbina: lets try to write deffinition [19:49:38] Zlip792: So original source cannot be easy to locate [19:49:42] brithel1: revenue without a clear source [19:49:45] agodirin: Using the proceed of crime in a legitimate business [19:49:46] balbina: examinator can ask us about that [19:50:05] balbina: it is a process [19:50:12] hilariousastal: hiding the true source of money and as well as possessing and transferring the proceeds of any crime is money laundering [19:50:23] balbina: {hilariousastal} great [19:50:33] funshine99: dont forget to write the stages [19:50:37] funshine99: in ML [19:50:41] agodirin: {hilariousastal} love that [19:51:16] balbina: ok [19:51:25] balbina: what are auditors responsibilities? [19:51:38] balbina: can auditor do money laundering?

[19:51:40] balbina: :) [19:51:58] agodirin: To report it when they see one [19:52:07] balbina: should look for it? [19:52:14] hilariousastal: yes by means of possessing the proceeds of crime which is given by the client in the form of fees of doing audit [19:52:16] sarmadgul: Important to note is that if an auditor deal in criminal proceeds then its a criminal liaibility [19:52:21] funshine99: money laundering involves three stages: placement, layering and integration [19:52:21] agodirin: And to report without tipping off [19:52:25] balbina: or report when he/she notice that? [19:52:33] sarmadgul: which I guess is not covered by PII [19:52:43] brithel1: auditors report cases of suspected money laundering activities to the money laundering officer [19:52:55] balbina: {brithel1} yep [19:52:59] brithel1: who then takes the matter to the competent authority [19:53:09] hilariousastal: MLRO [19:53:09] Zlip792: MLRO in Audit Firm or some other [19:53:21] hilariousastal: usually somene at a partner level [19:53:57] balbina: what about tipping off a client? [19:54:34] kitt: {funshine99} explain 3 stages in detail [19:54:35] hilariousastal: an audit firm should not give indications to the client if it has any suspicious abt it being involved in money laundering is tipping off [19:54:39] Zlip792: {balbina} Making them aware that we know you are doing money laundering [19:54:41] bubblygirl: never tip off a client when u have suspicious [19:54:46] balbina: {hilariousastal} perfect [19:54:48] Zlip792: {balbina} Means make them know how [19:54:50] funshine99: {hilariousastal} I can [19:54:55] balbina: {Zlip792} yes [19:54:58] hilariousastal: {bubblygirl} yes

[19:55:01] funshine99: {kitt} i can [19:55:05] balbina: {bubblygirl} yes [19:55:10] balbina: great [19:55:23] Zlip792: Great going folks, get involve and bang this session and learn on each step [19:55:31] balbina: and we should make sure who is our client, [19:55:38] bubblygirl: also KYC know your client [19:55:47] Zlip792: {balbina} Yes [19:55:51] balbina: so what about pratcial things [19:55:51] sarmadgul: Thats covered in pre conditions of an audit [19:55:54] sarmadgul: ISA 210 [19:55:57] agodirin: Yes, know your client procedure [19:56:05] balbina: what audit firms can do [19:56:06] funshine99: KYC is a must these days [19:56:12] balbina: {funshine99} yes [19:56:27] balbina: {agodirin} yes [19:56:47] balbina: know your clients procedures, [19:56:50] hilariousastal: a firm would need to see who is the owner of company its shareholders their source of income and whether if the business logic of company makes sense etc [19:57:03] balbina: train your staff in money laundring process [19:57:21] bubblygirl: train all staff in ML processes [19:57:23] bubblygirl: lol [19:57:28] bubblygirl: me nd balbina [19:57:35] bubblygirl: :d [19:57:47] hilariousastal: ditto [19:57:53] bubblygirl: hehehe [19:58:02] bubblygirl: sorry guy me also bzy wid shifting flat [19:58:16] bubblygirl: nt much involve [19:58:32] balbina: what about appoinitng MLRO?

[19:58:44] balbina: money laundering reporting officer? [19:59:04] balbina: it seems to be very expensive option in my opinion [19:59:23] bubblygirl: audit firm should appint MLRO [19:59:45] jaweria_saleem: hi [19:59:52] jaweria_saleem: how much did i miss? [20:00:01] bubblygirl: {jaweria_saleem} nt much [20:00:02] funshine99: {bubblygirl} MLRO can be anyone no need to appoint it is usually the partner [20:00:08] bubblygirl: yeah [20:00:16] bubblygirl: likely to b partner [20:00:38] hilariousastal: yes it is expensive but not much if weighed against the prison of partners of firm its not an LLP [20:00:39] Zlip792: {bubblygirl} key engagement partner?? [20:00:49] balbina: ok so how can auditor find the fact of money laundering? [20:00:50] agodirin: The person must be trainned on ML issues [20:00:57] Zlip792: {hilariousastal} and company like KPMG [20:01:24] Zlip792: {balbina} Business practice of client make sense [20:01:30] Zlip792: {balbina} ambigious source of money [20:01:46] agodirin: that is wher KYK is very important [20:01:55] balbina: {Zlip792} yes, for example the business which may be easy for money laudering [20:02:12] agodirin: Politically incline people [20:02:24] hilariousastal: cash businesses money laundeeres love to deal in [20:02:34] agodirin: Casinos [20:02:38] balbina: for example night club :) [20:03:01] balbina: lots of income but when we enter there are no clients [20:03:18] balbina: or when it is new created company with high incomes [20:03:20] Zlip792: {balbina} Banned here in our country if there are some it will be illegal [20:03:34] balbina: {Zlip792} oh ok [20:03:52] balbina: other examples maybe?

[20:03:59] Zlip792: Money laundering usually happens in cash proceeds so tracking from banking channel will be difficult [20:04:07] balbina: {Zlip792} {Zlip792} yesssss [20:04:21] balbina: where are cash sales [20:04:29] balbina: great [20:05:00] balbina: also auditor may look at many simillar small transactions [20:05:08] balbina: its may be suspicious [20:05:23] balbina: why so many transactions when can be one big [20:05:28] kitt: should the audit firm resign, if they find out that the client is invoved in ML? [20:05:55] Zlip792: {kitt} If there is no reasonable escape then they should [20:06:02] sarmadgul: It an auditor suspects before the start of the audit that the client is involved in the monney laundering, insider dealing etc, he should not accept the engagement [20:06:09] balbina: or when transactions goes through many companies, its complicates and difficult rather than simply solution [20:06:14] Zlip792: {kitt} Usually quiting is last option, how wants to forgo his/her revenue [20:06:17] sarmadgul: Yes Kit tehy should resign [20:06:27] jaweria_saleem: if the firm resigns won't it have to provide explanation for resignation? [20:06:36] balbina: {kitt} auditor should report it [20:06:56] Zlip792: {jaweria_saleem} Yeah, they do but to appropriate person and through appropriate channels otherwise it will be tipping off [20:06:59] sarmadgul: jaweria_saleem: auditor has to report to appropriate authorities at the same time [20:07:02] jaweria_saleem: can't lie and can't tip off [20:07:22] balbina: can always report to acca for example [20:07:23] Zlip792: {jaweria_saleem} Ethics govern us.. Objectivity and Integrity [20:07:38] kitt: what would consitutue a resignation in absolute terms [20:07:39] Zlip792: {balbina} I think ask anonymousely ACCA as well? Am I right? [20:07:42] hilariousastal: {jaweria_saleem} it creates suspicions on intergrity of client and which may lead to or end up firm being sued in the court for limited liablity thingy [20:07:56] balbina: it depends on country

[20:08:05] hilariousastal: as audit opinon could be wrong [20:08:08] balbina: there are rather local organisations [20:08:27] sarmadgul: Can enron case be a perfect example for this? where auditor and client were both held liable [20:08:47] balbina: in UK it id serious organised crime agency [20:08:52] jaweria_saleem: well in case of enron audit firm destroyed the evidence [20:08:57] balbina: {sarmadgul} yep [20:08:58] hilariousastal: {sarmadgul} that was an example of auditors libility we will see later [20:09:02] funshine99: SOCA [20:09:09] sarmadgul: But still they were held liable [20:09:23] sarmadgul: hilariousastal: Ok [20:09:25] jaweria_saleem: and didn't report [20:09:32] balbina: there is ACCA guidance [20:09:48] balbina: ACCA issued two technical factsheets [20:09:53] balbina: do you know then? [20:10:02] jaweria_saleem: nope [20:10:05] Zlip792: Nope [20:10:17] balbina: 94 and 131 [20:10:57] balbina: there will be more about that in ethical section [20:11:15] balbina: just remember there are, maybe we will need to know it on exam [20:11:30] jaweria_saleem: wasn't discussed in kaplan so didn't think it'll be asked in paper [20:11:57] jaweria_saleem: they just mentioned that there was a guidance [20:12:05] hilariousastal: {jaweria_saleem} yes [20:12:11] Zlip792: {balbina} Which Study Text your prefer? - offtopic question [20:12:19] balbina: bpp [20:12:33] balbina: but i like to verify kaplan as well [20:13:09] balbina: ok then [20:13:27] sarmadgul: whats next?

[20:13:28] balbina: i think we should go to next topic [20:13:41] balbina: 3. Laws and regulations [20:14:00] balbina: which ISA covers that? [20:14:43] balbina: number? [20:14:47] sarmadgul: I guess 250 [20:14:51] balbina: yessssss [20:14:55] sarmadgul: can anyone confirm? [20:15:00] Zlip792: {sarmadgul} Yes, I can [20:15:01] geoklean: yeap [20:15:16] balbina: what 250 says? [20:15:24] balbina: what is it about? [20:15:27] Zlip792: {balbina} I also studied from BPP but I failed at 42 [20:15:43] Zlip792: {balbina} Laws and Regulations which governs Audit [20:15:48] sarmadgul: consideration of laws and regulations in the audit [20:15:53] balbina: :) [20:16:09] Zlip792: {balbina} Like International, National, Regulatory Body etc all [20:16:19] balbina: ok [20:16:26] balbina: what are management responsibilities? [20:16:37] sarmadgul: To disclose [20:16:49] balbina: {sarmadgul} to disclose what? [20:17:10] Zlip792: {balbina} prepare f/s in considerations of all laws and regulations [20:17:17] sarmadgul: Forgot :P [20:17:18] balbina: {Zlip792} yes [20:17:25] balbina: {sarmadgul} heh [20:17:27] balbina: it ok [20:17:35] balbina: from f8 [20:17:47] balbina: whats the responsibility in general

[20:18:07] Zlip792: {balbina} - full disclosure to vouchers and source documents to auditors [20:18:08] sarmadgul: Too much of suspence Balbina :P.. please tell us [20:18:09] balbina: the management responsibility is to ....... key word [20:18:20] balbina: ENSURE THAT.... [20:18:42] Zlip792: Financial statements are free from material misstatement??? [20:18:48] balbina: entity;s operations [20:19:05] Zlip792: {balbina} presenting company's current state or value? [20:19:14] jaweria_saleem: reflect accounting performance and position accurately inf/s and prepare [20:19:27] jaweria_saleem: them in accordance with framework [20:19:31] balbina: are perforimng in accordance with laws and regulations [20:19:37] jaweria_saleem: comply with laws and regulations [20:19:40] sarmadgul: are in accordance with aws and reg [20:19:42] Zlip792: {balbina} Boooo. to us all.. LOL! [20:19:47] balbina: lol [20:19:51] sarmadgul: Lol [20:19:57] balbina: and they are also responsible for [20:20:12] sarmadgul: It is the primary responsibility of the management [20:20:19] balbina: prevention and detection of non compliance [20:20:30] sarmadgul: Right.. [20:20:53] balbina: so they are responsible for company operations [20:21:17] Zlip792: {balbina} are in accordance with laws and regulations [20:21:22] balbina: yes :) [20:21:29] sarmadgul: move on :) [20:21:31] balbina: so what can they do? [20:21:38] balbina: actions [20:21:45] Zlip792: {balbina} guess game is very bad, it make us do blunders... [20:22:00] balbina: one of them

[20:22:08] balbina: they can appoint internal audit [20:22:15] Zlip792: {balbina} rectify laws changing if they can't then disclose reason for deviation [20:22:40] balbina: so they can ensure the company has sufficient internal controls [20:22:48] Zlip792: {balbina} consider prospective laws changing and account for them? [20:22:58] Zlip792: {balbina} Once again booo to me [20:23:20] balbina: can they engage legal advisers? [20:23:35] balbina: can they publich code of conduct? [20:23:44] Zlip792: {balbina} Obviously legal terms can't be easily interpretated by normal layman accountants [20:23:47] sarmadgul: I guess they can [20:24:07] balbina: can they monitor if the procedures are operating effecively? [20:24:09] Zlip792: {balbina} Law log book = code of conduct - you mean [20:24:22] Zlip792: {balbina} Yeah, they need to otherwise penalty from Govt [20:24:45] Zlip792: {balbina} You are asking in prospect of "Company" "management"? am I right? [20:25:06] Zlip792: {balbina} or I need to cover in auditor hat [20:25:12] balbina: i m writitng in general [20:25:18] Zlip792: {balbina} OK [20:25:31] balbina: just to give brief idea about management responsibilities [20:25:54] balbina: i think we need to cover it at home once again [20:26:09] balbina: so we all understand it correctly [20:26:17] balbina: at the end [20:26:20] Zlip792: {balbina} Agree.. Home side learning matters a lot [20:26:27] balbina: Auditors responsibilities [20:27:04] Zlip792: {balbina} Ensure laws are being followed [20:27:13] balbina: yes [20:27:17] Zlip792: {balbina} Some unknown penalty cost is not included [20:27:18] sarmadgul: To perform specific procedures to ensure law are being followed [20:27:27] balbina: {sarmadgul} yes

[20:27:31] Zlip792: {balbina} IAS-37 "Contingenet Liability" [20:27:53] sarmadgul: Like.. meeting with the internal and external legal counselor of the client [20:27:57] Zlip792: {balbina} Check if some deviation caused penalty and whether its legal proceeding fine is added in F/S properly [20:27:58] balbina: what about auditor find breach? [20:28:08] sarmadgul: verifying for any pending litigation [20:28:08] tmaker: {balbina} It's simple [20:28:11] Zlip792: {balbina} Inform management [20:28:16] balbina: great [20:28:24] Zlip792: {Zlip792} then directors [20:28:28] balbina: what if this involves management? [20:28:34] sarmadgul: He should report! [20:28:45] balbina: {sarmadgul} report to who? [20:28:45] Zlip792: {balbina} if management involves then director in the end to regulatory authority [20:28:56] jaweria_saleem: then those charged with gov. [20:28:59] sarmadgul: and he should check how adversely it will effect his audit opinion [20:29:00] balbina: yes, always higher level we report [20:29:24] Zlip792: {balbina} ultimate level is govt aka regulatory authority, concerned dept in govt [20:29:31] sarmadgul: for most sever case he should withdarw the engagement [20:29:32] balbina: when it is the highest level we may take legal advice [20:29:36] sarmadgul: severe* [20:29:52] balbina: {sarmadgul} and what between it? [20:30:02] Zlip792: {balbina} What about disclosing in public if its is related to some foods thingy? [20:30:04] balbina: what about our report? [20:30:09] sarmadgul: material and pervasive opinion [20:30:21] sarmadgul: or material but not pervasive [20:30:28] sarmadgul: depending on the materiality [20:30:33] sarmadgul: however

[20:30:44] Zlip792: laws make company going concern issues so always pervasive [20:30:47] balbina: well if it is material then it affects the report [20:31:00] balbina: so we qualify the report [20:31:08] sarmadgul: if he finds the managemet involved, he should take a legal advice before reporting it to the authoritis [20:31:18] Zlip792: {balbina} If management refuse to change then disagreement with management and qualified report [20:31:31] jaweria_saleem: confidentiality to be considered first [20:31:34] balbina: {sarmadgul} i didnt cover auditor report yet, need to revise it [20:31:40] Zlip792: I am going out for minutes, will be back... Let me cover up my online job thingy [20:31:50] sarmadgul: Even I didnt balbina :P [20:32:12] balbina: lol [20:32:20] sarmadgul: jaweria_saleem: yes for the sake of confidentiality he should take a legal advice [20:32:40] jaweria_saleem: material if affects a sinle item or element and pervasive if substantial or whole f/s is affected [20:32:54] balbina: and we can also consider if the information goes public going concern assessment [20:32:57] sarmadgul: Right jav [20:33:30] balbina: guys you know about auditor report a lot :) [20:34:07] Zlip792: You people revised whole P7 for session? I didn't [20:34:08] jaweria_saleem: yeah cause i failed at 47 in last attempt [20:34:26] sarmadgul: To make it more appropriate, if the auditor thinks that because of the missstatement the whole F/s cannnot be relied upon then report should be qualified by expressing a material and pervasive opinion [20:34:27] balbina: ok guys [20:34:37] balbina: i think we covered our topics for today [20:34:43] sarmadgul: And I cleared at 64 :) [20:34:52] sarmadgul: last attempt [20:35:04] Zlip792: I cleared P4 and F8 in last attempt

[20:35:08] Zlip792: LOL! [20:35:12] sarmadgul: Lol! [20:35:16] Zlip792: {Zlip792} Twice failed in F8 [20:35:23] Zlip792: I hate audit [20:35:35] sarmadgul: I love audit ! [20:35:35] balbina: so for the next session code of ethics [20:35:46] balbina: {Zlip792} i used to hate it too :P [20:35:59] Zlip792: {balbina} I still use to... :p [20:36:05] jaweria_saleem: anyway i wanna know if i prepare from kaplan only, will it be sufficient? [20:36:13] balbina: you will change your mind :) [20:36:15] geoklean: {balbina} when is the next ssession? [20:36:24] balbina: next MOnday [20:36:30] balbina: 6pm uk time [20:36:42] jaweria_saleem: only code of ethics [20:36:42] fgassita: {balbina} why not tomorrow? [20:36:59] sarmadgul: We are attempting other papers also :) [20:37:05] balbina: B Professional and Ethical Considerations 1. Code of Ethics for Professional Accountants 2. Fraud and error 3. Professional liability [20:37:11] Zlip792: {balbina} Its late night for me, can't you make it little early [20:37:12] balbina: isnt too much for next session? [20:37:23] sarmadgul: Will see! [20:37:29] Zlip792: {jaweria_saleem} I prefer BPP but Kaplan is more than enough [20:38:04] Zlip792: {balbina} No, next time I will come with revision.. LOL!! So I don't make blunders in your guess game.. LOL! [20:38:07] balbina: {Zlip792} well i was thinking about doing it Sunday starting 15th Sept [20:38:25] Zlip792: {balbina} Sunday is easy going for me in online job less work to do

[20:38:26] balbina: {Zlip792} i will prepare tricky questions for you :) [20:38:39] Zlip792: {balbina} don't make me sad by saying this... [20:38:59] balbina: {Zlip792} just its summer time and people go countryside during weekends [20:39:00] Zlip792: {balbina} You will expose me pretty bad here [20:39:24] Zlip792: {balbina} Actually there is 5 hours difference in your and our time zone [20:39:27] balbina: i will help you to pass p7 :) [20:39:33] balbina: and you help me too :) [20:39:48] balbina: its almost 9pm my time [20:39:49] Zlip792: {balbina} Here we are 11:39 PM, I try my best to help others as much as I can [20:40:00] Zlip792: {balbina} Are you from UK? [20:40:04] balbina: nope [20:40:07] balbina: from poland [20:40:13] Zlip792: {balbina} Oh I thought you are.. LOL! [20:40:36] balbina: :) [20:40:47] balbina: uk time is easy to remember [20:40:55] jaweria_saleem: thanks for the revision [20:40:58] balbina: + i m afraid of traffic jams [20:41:03] balbina: thank you guys [20:41:08] balbina: i hope you liked it [20:41:16] balbina: and it will help us to pass p7 :) [20:41:21] balbina: fingers crossed [20:41:29] balbina: we will try for the next time [20:41:33] balbina: B Professional and Ethical Considerations 1. Code of Ethics for Professional Accountants 2. Fraud and error 3. Professional liability [20:41:42] balbina: we will see how much we can cover

[20:41:48] Zlip792: This year P7 examiner wait for us, I am gonna bang this paper like hell, you dare to fail me... Hohahahaha!!! LOL!!! [20:41:59] balbina: thank you guys for your participation [20:42:17] sarmadgul: Yea Thank you all! [20:42:22] Zlip792: Thanks every guy or gal, who came and make this session better [20:42:33] Zlip792: and forgive if I said something absurd or which hurt anyone [20:42:52] balbina: i m glad in peak time there were 13 people! [20:42:54] balbina: yeah