There is always an issues for students when it come to the understanding of AEIOU or how to answer question related to the audit work, audit testing or audit procedure that need to be carry out.
When such type of question is asked what the examiner wanted to know is probably as an auditor you are given an accounting area to “check and investigate” so as to ensure that you can obtain reasonable assurance that there is no material misstatement in the particular area.
Therefore remember the accounting area is there and all control elements and financial assertion should exist when the audit client record any transaction into the financial records. You as the auditor should assume all the above is in place and your present is to present an assurance to the 3rd party whom are also the person who appointed you- the shareholder (and sometimes the stakeholders)
So how do you carry out? As mentioned in previous post there are many ways that you can do it. But for exam purpose and an easy way for you as a student to start with maybe you can take AEIOU as a guide.
I shall now provide in this post some common solution to it before I get into more specific area in the next post. Let take AEIOU as a guide and I would like to mention again as this is just a guide to you. If you are clear of what audit procedure is all about do it “Your Way”
For easy start we should look at financial statement first before we get into the control system.
Analytical review (AR)
What is analytical review? In simple it is the comparison of data. What data ? it can be financial data and even non financial data. We should look at financial data for now. Well as an auditor you should at the start of the “field audit “perform analytical on some key data for example the Cost for property plant and equipment.
If there is no different between current year figure and previous year figure meaning that there is no movement in PPE. However such comparison should be carry out by class of PPE like land, building, motor vehicles and others.
If there is an movement the next audit procedure that an auditor should do is compare (which is also part of AR) on the differences. This is also part of an investigation. Remember auditor is the to give assurance and highlight any “audit issues” you are not an executor to do any work that a company finance team should do.
From this point on ward you might see that AEIOU is a continuous process whether it is inter related when it comes to the flow of audit checking.
From the AR you might then go to other audit testing method such as “EIOU”
Enquiries
What It mean by enquiries? To me it is simple, it mean discussion ask and probably meeting. Any conversation with another person will be considered as enquiries. Of course it must be related to the audit. Or in audit term it must be relevance.
Discussion with the Account staff, accountant financial controller and the director are considered as part of the evidence collection too. However it must be properly documented and some important area should be in formal communication method ie letters and memo.
Inspection of documents
This is the easiest process as auditor is checking on the relevant documents to collect evidence. This can include Company’s internal documents or external documents. Internal documents like those invoices, minutes of meeting and external documents like bank statement and valuations reports are all considered as related documents where auditor could collect evidence from.
Observation
This could probably be the hardest way for student to interpret during exam. What to observe and how observation can help in audit? This I shall leave it to the actual scenario as it is hard to explain!
Calculation
Well this is the easiest. Arithmetical checking make sure right calculation and right valuationGet yourself familiar with the above as this is key part of the exam. Leave a comment if you have a question
Sunday, April 26, 2009
Monday, April 20, 2009
part 5
After understanding the objectives for both internal control and financial statements, it is time now to get to know how to audit it.
First of all let get some phrase right. Many students are confused of the phrase audit test, audit work and audit procedure. Actually they are all the same meaning. It means the audit evaluation carry out by auditor.
So how do auditors carry out audit evaluation? It can be in many ways but it must meet its objectives which we have mentioned in the previous articles
However students find it hard to start with the question on audit evaluation. So let us start with some basic principles.
Auditor can carry out audit evaluation by using the principles of (but not limited to) AEIOU
A: Analytical review
E: Enquiries
I: Inspection of documents
O: observation
U: Calculation
(Remember the above is just a guide to help student to start off a question if you understand audit evaluation well you can do it your way)
Let have a simple explanation of the above
1. A: Analytical review: comparison of data to evaluate the differences. This become a lead to the start of audit evaluation.
2. E: Enquiries: means discussion or obtaining the audit evidence through oral form
3. I: Inspection of documents: checking of hard evidence or written evidence
4. O: observation: observed the situation in order to confirm certain evidence
5. U: Calculation: to ensure right valuation.
Oh definitely the above sound simple. When applying into the question, it never click as question will never be direct to it.
Now let crease some question on the question
A: Analytical review: What should we compare and why should be compare?
E: Enquiries: who should we discuss and what should we discuss
I: Inspection of documents: what documents should we inspect and why should we inspect?
O: observation: what should we observe and why should we observe?
U: Calculation: this sound simple but what are the area that we should set the valuation right?
Let think about it before we continue
First of all let get some phrase right. Many students are confused of the phrase audit test, audit work and audit procedure. Actually they are all the same meaning. It means the audit evaluation carry out by auditor.
So how do auditors carry out audit evaluation? It can be in many ways but it must meet its objectives which we have mentioned in the previous articles
However students find it hard to start with the question on audit evaluation. So let us start with some basic principles.
Auditor can carry out audit evaluation by using the principles of (but not limited to) AEIOU
A: Analytical review
E: Enquiries
I: Inspection of documents
O: observation
U: Calculation
(Remember the above is just a guide to help student to start off a question if you understand audit evaluation well you can do it your way)
Let have a simple explanation of the above
1. A: Analytical review: comparison of data to evaluate the differences. This become a lead to the start of audit evaluation.
2. E: Enquiries: means discussion or obtaining the audit evidence through oral form
3. I: Inspection of documents: checking of hard evidence or written evidence
4. O: observation: observed the situation in order to confirm certain evidence
5. U: Calculation: to ensure right valuation.
Oh definitely the above sound simple. When applying into the question, it never click as question will never be direct to it.
Now let crease some question on the question
A: Analytical review: What should we compare and why should be compare?
E: Enquiries: who should we discuss and what should we discuss
I: Inspection of documents: what documents should we inspect and why should we inspect?
O: observation: what should we observe and why should we observe?
U: Calculation: this sound simple but what are the area that we should set the valuation right?
Let think about it before we continue
Part 4
My apology, I was real busy and real sick over the weather here. Can you imagine snowing in April? What a day and I have sick for the past 2 weeks. Anyway it is time to follow up with the blog commitments.
Let look the 5 monsters –COVED how do we put it in simple and provide a good example?
As we know financial assertion is the assertion that a recorded must ascertain before they record a “BUSINESS TRANSACTION” into the financial records. For your information, the financial records comprise of
1. The book of prime entry
2. The Ledger book
3. The trial balance and
4. The financial statements
Your question: How can the two be correlated?
Completeness: Is to ensure that the business transaction is properly recorded, ie: A car. When a car is being purchased it should properly be record in
1. The book of prime entry : the journal voucher and the Fixed asset register
2. The Ledger book : Cost account, depreciation account and accumulated depreciation
3. The trial balance : Debit side for cost and credit side for cash or credit
4. The financial statements: the income statement for depreciation the balance sheet for cost and accumulated depreciation
Ownership/obligation: you need to prove that you own the car before you can record in the financial record above. So how you prove it? That is what required auditor to counter check in the exam. Audit client need to prove the ownership to the auditor and auditor need to get the evidence.
For the above and the following, bear in mind it is for the audit client to assure the financial assertion and the auditor to obtain reasonable assurance (evidence).
Valuation: the Audit Client need to ensure that the right valuation is being recorded! For example: Inventory cost it should be at the lower of cost or NRV! That is valuation, the client put in a valuation and the auditor obtains evidence that the valuation is right.
Existence: The recorder need to ensure that those business transactions actually exist and auditor obtain evidence on that. There are three key areas where auditor needs to obtain evidences!
Disclosure: All business transaction needs to be properly disclosed.
FOR All COVED, the Company need to ensure that it exist and auditor is to obtain evidence on that
On that basis the COVED become the objectives for the auditor to carry their audit on financial statement.
So let reverse the statement for the Auditor.
1. Auditor need to obtain reasonable assurance that “business transaction” is completely recorded in the financial records for examples:………………………………………….
2. Auditor need to obtain reasonable assurance that the “business transaction” is own by the company or company is obliged with. For example……………………………….
3. Auditor need to obtain reasonable assurance that “business transaction” is properly valued. For example…………………………………………
4. Auditor need to obtain reasonable assurance that business transaction exist for example………………..
5. Auditor need to obtain reasonable assurance is properly disclosed for example………………….
For the next post we look at the audit testing. Take care
Let look the 5 monsters –COVED how do we put it in simple and provide a good example?
As we know financial assertion is the assertion that a recorded must ascertain before they record a “BUSINESS TRANSACTION” into the financial records. For your information, the financial records comprise of
1. The book of prime entry
2. The Ledger book
3. The trial balance and
4. The financial statements
Your question: How can the two be correlated?
Completeness: Is to ensure that the business transaction is properly recorded, ie: A car. When a car is being purchased it should properly be record in
1. The book of prime entry : the journal voucher and the Fixed asset register
2. The Ledger book : Cost account, depreciation account and accumulated depreciation
3. The trial balance : Debit side for cost and credit side for cash or credit
4. The financial statements: the income statement for depreciation the balance sheet for cost and accumulated depreciation
Ownership/obligation: you need to prove that you own the car before you can record in the financial record above. So how you prove it? That is what required auditor to counter check in the exam. Audit client need to prove the ownership to the auditor and auditor need to get the evidence.
For the above and the following, bear in mind it is for the audit client to assure the financial assertion and the auditor to obtain reasonable assurance (evidence).
Valuation: the Audit Client need to ensure that the right valuation is being recorded! For example: Inventory cost it should be at the lower of cost or NRV! That is valuation, the client put in a valuation and the auditor obtains evidence that the valuation is right.
Existence: The recorder need to ensure that those business transactions actually exist and auditor obtain evidence on that. There are three key areas where auditor needs to obtain evidences!
Disclosure: All business transaction needs to be properly disclosed.
FOR All COVED, the Company need to ensure that it exist and auditor is to obtain evidence on that
On that basis the COVED become the objectives for the auditor to carry their audit on financial statement.
So let reverse the statement for the Auditor.
1. Auditor need to obtain reasonable assurance that “business transaction” is completely recorded in the financial records for examples:………………………………………….
2. Auditor need to obtain reasonable assurance that the “business transaction” is own by the company or company is obliged with. For example……………………………….
3. Auditor need to obtain reasonable assurance that “business transaction” is properly valued. For example…………………………………………
4. Auditor need to obtain reasonable assurance that business transaction exist for example………………..
5. Auditor need to obtain reasonable assurance is properly disclosed for example………………….
For the next post we look at the audit testing. Take care
Sunday, March 29, 2009
Exam focus - ACCA F8 June 2009 (3)
I received many complains, why the next post is so slow? Why answer is simple, I am too busy too tired and of course lazy.
Well no excuse as I have promised to do so. Let continue to the journey of June 2009 examination. However I may skip the internal control apart as promised earlier and go on to another important area namely financial statement assertion. We shall do it in a layman way, MY WAY!
What is financial statement assertion? This is an area where students always misunderstand. Financial Statement assertions are assertion where company must observed when recording a business transaction into the Financial Statement.
In your student text there are seven assertions namely:
Existence
An asset or liabilities exist at given date
Right and obligation
An asset or liabilities pertain to the entity at a given date
Occurrence
A transaction or events took place which pertain to the entity during the relevant period
Completeness
There are unrecorded assets, liabilities or events or disclosure items
Valuation
An asset or liabilities is recorded at an appropriate carrying value
Measurement
A transaction or events is recorded in the proper amount and revenue or expenses is allocated to the proper periods
Disclosure
An items is disclosed, classified and describe in accordance with the applicable reporting framework
However usually we will summarized it into 5 category namely
Completeness
ownership/obligation
valuation
existence
disclosure
So how to make it relevant in exam?
When a Company records a business transaction (BT) in the financial statement the need to ensure that:
1. The Company need to ensure that the BT is properly recorded in the Financial statement to ensure completeness or
2. To ensure completeness the company needs to ensure that BT is properly record in the financial statements.
3. To ensure ownership or obligation, the company need to ensure that they own or obliged toa business transaction.
4. To ensure valuation, the Company need to ensure that the BT has the right valuation when recorded into the financial statement
5. The ensure existence, company need to ensure that the BT actually exist
6. To ensure proper disclosure, company need to ensure that all BT are properly disclosed in the financial statements
Practice Can you provide example for the above?
Stay tune with layman
Well no excuse as I have promised to do so. Let continue to the journey of June 2009 examination. However I may skip the internal control apart as promised earlier and go on to another important area namely financial statement assertion. We shall do it in a layman way, MY WAY!
What is financial statement assertion? This is an area where students always misunderstand. Financial Statement assertions are assertion where company must observed when recording a business transaction into the Financial Statement.
In your student text there are seven assertions namely:
Existence
An asset or liabilities exist at given date
Right and obligation
An asset or liabilities pertain to the entity at a given date
Occurrence
A transaction or events took place which pertain to the entity during the relevant period
Completeness
There are unrecorded assets, liabilities or events or disclosure items
Valuation
An asset or liabilities is recorded at an appropriate carrying value
Measurement
A transaction or events is recorded in the proper amount and revenue or expenses is allocated to the proper periods
Disclosure
An items is disclosed, classified and describe in accordance with the applicable reporting framework
However usually we will summarized it into 5 category namely
Completeness
ownership/obligation
valuation
existence
disclosure
So how to make it relevant in exam?
When a Company records a business transaction (BT) in the financial statement the need to ensure that:
1. The Company need to ensure that the BT is properly recorded in the Financial statement to ensure completeness or
2. To ensure completeness the company needs to ensure that BT is properly record in the financial statements.
3. To ensure ownership or obligation, the company need to ensure that they own or obliged toa business transaction.
4. To ensure valuation, the Company need to ensure that the BT has the right valuation when recorded into the financial statement
5. The ensure existence, company need to ensure that the BT actually exist
6. To ensure proper disclosure, company need to ensure that all BT are properly disclosed in the financial statements
Practice Can you provide example for the above?
Stay tune with layman
Letter to Miss S
I have read your answer and I must say that the answer is not wrong but not up to standards.
Definitely with this level of writing and interpretation in examination, no examiner can pass you.
You need to get more in-depth to the answer writing. You must write in a way where you assume that the examiner or the marker does not know anything about audit. You must write in a way to convince and explain what is the subject about.
It is like a Children asking for their parent to buy a toy. The Child if shout and scream that he want a toy like “I want the toy, I want the toy…………………..” it does not convince the parent the need for the toy. However if a reason being given like, like the child telling the parent by buying the toy it mark a very important memory in his childhood, will the parent be touched?
It is like watching a movie. Who wants to go into the cinema watching a movie where from beginning to the end, you need to guess what the movie is talking about? Or till the end of the movie you also not sure what the movie is talking about. How can a movie does not express an objective and do not express a contents that viewer willing to see.
Going for the exam is just like making a movie, you can take 1 year to film it but usually you have only 3 hrs to present it. You might take a year to complete a subject but at each time you only have 3 hrs to proof you worth.
You now need to build up the quality of your contents. How to make it? Practice Practice Practice
Best wishes
Layman
Definitely with this level of writing and interpretation in examination, no examiner can pass you.
You need to get more in-depth to the answer writing. You must write in a way where you assume that the examiner or the marker does not know anything about audit. You must write in a way to convince and explain what is the subject about.
It is like a Children asking for their parent to buy a toy. The Child if shout and scream that he want a toy like “I want the toy, I want the toy…………………..” it does not convince the parent the need for the toy. However if a reason being given like, like the child telling the parent by buying the toy it mark a very important memory in his childhood, will the parent be touched?
It is like watching a movie. Who wants to go into the cinema watching a movie where from beginning to the end, you need to guess what the movie is talking about? Or till the end of the movie you also not sure what the movie is talking about. How can a movie does not express an objective and do not express a contents that viewer willing to see.
Going for the exam is just like making a movie, you can take 1 year to film it but usually you have only 3 hrs to present it. You might take a year to complete a subject but at each time you only have 3 hrs to proof you worth.
You now need to build up the quality of your contents. How to make it? Practice Practice Practice
Best wishes
Layman
Saturday, March 14, 2009
Exam focus- June 2009 ACCA F8 (2)
I am tired with work and life, time to divert to write a posting for you. I really hope you did your own revision before following this guide. Bear in mind that this is not a full lecture as I can’t conduct a lecture through blog but at least I can give you a simple guide and show you the hidden part of the examination to help you pass your examination.
Last posting we talk about “Control Elements”. This as far as I am concern is a very important area for examination as understanding the control elements can help you answer many “types” of examination question involving internal control system.
How?
A favorite exam question; what is the “control objective” of “internal control” system. I am not surprise that lot of students still confuse with this area. So let look this part of the exam favorite.
An objective mean what you wanted to achieve; control objective mean what type of control you wanted to achieve. Well in common in order to implement control into a system we aimed to achieve the following:
Objective of having internal control system.
The financial records are accurate and complete
Fraud does not occur
The company is efficiently managed
Business in conducted in orderly and efficient
Timely preparation of information for decision making purposes.
However if a student were to take the above as their answer, something is still lacking which I regards as the lacking of audit reasons. How to fill the gap and have an answer with substance? Well bring in the control elements as the element is indirectly your objective or purpose in implementing control.
For example a bank and cash system:- What is the objectives or purpose of having such control?
I will always standardized the answer by using the word reasonable assurance or ensure as a start.
For example: to obtain reasonable assurance or to ensure………………………………………………..
The Answer: - sample
The control objectives or purposes are
1. To obtain reasonable assurance that there are proper physical security measure in cash
handling system so that asset of the company is not lost due to lack of safeguarding
2. To obtain reasonable assurance that proper authorization procedure on cash or bank payment to avoid fraud
3. To obtain reasonable assurance that operation of bank and cash are efficient through proper supervisory
4. To obtain reasonable assurance that there is no arithmetical mistake to avoid inaccuracy in financial records
From the above I am using very simple illustrations to give answers to your examiner and the answer is surrounding two parts: the control elements and the general objectives to internal control. Understanding of control elements could actually help more in the internal control system questions.
You might want to practice further or probably refer back to the past year question for some practice you will find that the above topic is common in exam and the answer might not be so complicated.
In the next post we shall discuss further on internal control system and your foundation on control elements is important as that will be our base for further discussion for your 2009 examination.
Layman will be back to work and my dear buddy stay tune with layman
Last posting we talk about “Control Elements”. This as far as I am concern is a very important area for examination as understanding the control elements can help you answer many “types” of examination question involving internal control system.
How?
A favorite exam question; what is the “control objective” of “internal control” system. I am not surprise that lot of students still confuse with this area. So let look this part of the exam favorite.
An objective mean what you wanted to achieve; control objective mean what type of control you wanted to achieve. Well in common in order to implement control into a system we aimed to achieve the following:
Objective of having internal control system.
The financial records are accurate and complete
Fraud does not occur
The company is efficiently managed
Business in conducted in orderly and efficient
Timely preparation of information for decision making purposes.
However if a student were to take the above as their answer, something is still lacking which I regards as the lacking of audit reasons. How to fill the gap and have an answer with substance? Well bring in the control elements as the element is indirectly your objective or purpose in implementing control.
For example a bank and cash system:- What is the objectives or purpose of having such control?
I will always standardized the answer by using the word reasonable assurance or ensure as a start.
For example: to obtain reasonable assurance or to ensure………………………………………………..
The Answer: - sample
The control objectives or purposes are
1. To obtain reasonable assurance that there are proper physical security measure in cash
handling system so that asset of the company is not lost due to lack of safeguarding
2. To obtain reasonable assurance that proper authorization procedure on cash or bank payment to avoid fraud
3. To obtain reasonable assurance that operation of bank and cash are efficient through proper supervisory
4. To obtain reasonable assurance that there is no arithmetical mistake to avoid inaccuracy in financial records
From the above I am using very simple illustrations to give answers to your examiner and the answer is surrounding two parts: the control elements and the general objectives to internal control. Understanding of control elements could actually help more in the internal control system questions.
You might want to practice further or probably refer back to the past year question for some practice you will find that the above topic is common in exam and the answer might not be so complicated.
In the next post we shall discuss further on internal control system and your foundation on control elements is important as that will be our base for further discussion for your 2009 examination.
Layman will be back to work and my dear buddy stay tune with layman
Thursday, March 12, 2009
Exam Focus – June 2009 – ACC F8 (1)
Ok let start out the first posting of our exam focuses series.
Under your examination syllabus, the following areas are considered as part of the internal control system, namely:
1. Revenue and receivables,
2. Purchases and payable,
3. Inventory,
4. Revenue and capital expenditure,
5. Payroll,
6. Bank and cash.
Under audit, you are not required to set up an internal control system. However you are required to check on the internal control system whether it is reliable or it is not reliable. On examining whether the internal control system is reliable or not it depend on the following three key factors namely:
1. Control environment
2. Control Procedure and
3. Control elements
Control Environment
Means the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance to the entity. It encompasses management style, corporate culture, values, philosophy and operating style, the organizational structure, personnel policies and procedures.
Personnel policies and procedure, for example, would include those covering recruitment, retention and dismissal. The organizational structure should have clear lines of reporting responsibility, and the maintenance of an internal control function and audit committee demonstrates a commitment to high-level of control.
The control environment provides a background to detailed control procedures. It does not of itself, of course, ensure the effectiveness of the internal control system as a whole.
Control Procedures
Control procedures are those established to achieve the entity’s specific objectives. In an accounting context these objectives include the proper authorization, timely and accurate recording of transactions in the correct period, the safeguarding of assets and ensuring the existence of assets recorded. They include particular procedures to prevent, detect and correct errors. They differ from entity to entity and are affected by the size of the entity
(You are required to read further on the above topics)
Now the most critical part to understand is the control elements. Control elements mean the “control action” that should exist within the internal control system. Without such control elements in the system, the control will not be effective.
In short these control elements are PAPAMOSS_PR
1. Physical security
2. Arithmetic
3. Personnel
4. Authorisation
5. Management
6. Organization
7. Supervisory
8. Segregation of duties
9. Pre-numbered documents
10. Recording
(You are required to read further above control environment and control procedure)
The most common use elements are physical security, arithmetic, authorization, supervisory, segregation of duties, pre-numbered documents and recording.
For example:
Cash control system: if there is no physical security control on cash, the cash will easily be stolen
urchase control system: if there is no proper authorization procedure item purchase might be improper
Arithmetic: if the figure calculated is wrong how to we ensure earnest of the recording?
Therefore students must understand each and every control elements before going further on the topics of internal control system. Get yourself familiar and revise with it.
Stay tune with LAYMAN
Under your examination syllabus, the following areas are considered as part of the internal control system, namely:
1. Revenue and receivables,
2. Purchases and payable,
3. Inventory,
4. Revenue and capital expenditure,
5. Payroll,
6. Bank and cash.
Under audit, you are not required to set up an internal control system. However you are required to check on the internal control system whether it is reliable or it is not reliable. On examining whether the internal control system is reliable or not it depend on the following three key factors namely:
1. Control environment
2. Control Procedure and
3. Control elements
Control Environment
Means the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance to the entity. It encompasses management style, corporate culture, values, philosophy and operating style, the organizational structure, personnel policies and procedures.
Personnel policies and procedure, for example, would include those covering recruitment, retention and dismissal. The organizational structure should have clear lines of reporting responsibility, and the maintenance of an internal control function and audit committee demonstrates a commitment to high-level of control.
The control environment provides a background to detailed control procedures. It does not of itself, of course, ensure the effectiveness of the internal control system as a whole.
Control Procedures
Control procedures are those established to achieve the entity’s specific objectives. In an accounting context these objectives include the proper authorization, timely and accurate recording of transactions in the correct period, the safeguarding of assets and ensuring the existence of assets recorded. They include particular procedures to prevent, detect and correct errors. They differ from entity to entity and are affected by the size of the entity
(You are required to read further on the above topics)
Now the most critical part to understand is the control elements. Control elements mean the “control action” that should exist within the internal control system. Without such control elements in the system, the control will not be effective.
In short these control elements are PAPAMOSS_PR
1. Physical security
2. Arithmetic
3. Personnel
4. Authorisation
5. Management
6. Organization
7. Supervisory
8. Segregation of duties
9. Pre-numbered documents
10. Recording
(You are required to read further above control environment and control procedure)
The most common use elements are physical security, arithmetic, authorization, supervisory, segregation of duties, pre-numbered documents and recording.
For example:
Cash control system: if there is no physical security control on cash, the cash will easily be stolen
urchase control system: if there is no proper authorization procedure item purchase might be improper
Arithmetic: if the figure calculated is wrong how to we ensure earnest of the recording?
Therefore students must understand each and every control elements before going further on the topics of internal control system. Get yourself familiar and revise with it.
Stay tune with LAYMAN
Tuesday, March 10, 2009
Exam focus-June 2009 – ACCA F8
On your request, I will start this exam focus series for all of you with the focus to tackle on the key spotted areas for June 2009 sittings. This series will be helpful for those repeaters and for the first timer you might find it useful after you have completed the syllabus.
Any one of you is welcome to send questions to me via my laymankt@gmail.com
As for me there are three key areas in your examination, namely:
1. Test of control/Compliance test for internal control system
2. Substantive testing for financial transaction and
3. The internal audit and control
For your examination purpose please makes sure you know the above area CORRECTLY.
Why do I stress the word correctly? Well I always felt that students understand wrongly on the above area which cost them the 50 marks they suppose to have. Therefore the first area I will focus on.
Examiners regardless of which sitting, new or old syllabus test of on the above. Many of you out there claim that the question style is different, hard to remember all the different scenario, exam scenario often changes. Well let address all these all at one go under this series.
You should now clear your mind and re-learn about these topics. My commitment to you to solve the queries and at the same time be open to accept the explanation on the next posts.
For those of you who are reading this now go revise the above topics and we shall see all action in the next post.
Stay with layman…………………………..
Any one of you is welcome to send questions to me via my laymankt@gmail.com
As for me there are three key areas in your examination, namely:
1. Test of control/Compliance test for internal control system
2. Substantive testing for financial transaction and
3. The internal audit and control
For your examination purpose please makes sure you know the above area CORRECTLY.
Why do I stress the word correctly? Well I always felt that students understand wrongly on the above area which cost them the 50 marks they suppose to have. Therefore the first area I will focus on.
Examiners regardless of which sitting, new or old syllabus test of on the above. Many of you out there claim that the question style is different, hard to remember all the different scenario, exam scenario often changes. Well let address all these all at one go under this series.
You should now clear your mind and re-learn about these topics. My commitment to you to solve the queries and at the same time be open to accept the explanation on the next posts.
For those of you who are reading this now go revise the above topics and we shall see all action in the next post.
Stay with layman…………………………..
Sunday, March 8, 2009
Choosing 2
Generation back, may be my great grandfather time or my grandfather time; they might not have this problem. Why I remember my grandmother told me this that my great grandfather was a barber then he opens up a sundry shop till he passed away.
His life was simple and brought up three Children. Grand father has a more exciting life but also I don’t think he also face much problem of choosing. So we at this generation especially those who born after the 70s what is the issues then? I would say the social issues?
Those who born after 70s are considered as the lucky group as they do not face any big crisis war and etc. They were born in the new age and the world has since develop from the 70s. no food crisis, they have food, more and more entertainment coming and more choices so that is the reason they have the choice and need to choose.
However my dear friend out there, don’t be too short sighted. Let me share this with you. Almost 10 years back I have to make a choice. A choice which I believe is so important and determines who I am now. A 3.5K monthly income which I need to work only a few days in a week or I should say not more than 15 hours a week. The other one is to give up the 3.5k job which you work only 15 hrs a week and work for a monthly income of 1.8k for almost 25 days a month 18 hrs a day.
Well I then choose to be an auditor rather than a lecturer. Why long term career plan rather than short term benefits. Further in my working life, I do lecture part time and earn extra income. However if I insist of my 3.5k income then, I might still be a lecturer now and forgo all the exciting moments and I won’t be going to Bangkok and now in Beijing looking at the beautiful scenery on Chao Yang Park.
Just chat with a student and he also facing a dilemma whether to gave up his part time job (he got 4 part time jobs) or slow down on his ACCA study. He needs to choose. Well my advice is simple, what do you like? He is worried about economic crisis and thinks a lot on things that yet to happen (which I believe all of us have gone through).
Let not be so short sighted, for you the priority is to get your ACCA done then you can bargain out there. Unless you are financially not stable, then you have no choice. However he has a choice and he can choose either way. His situation makes me think of another student of mine, whom thinks that finding money is more important than getting ACCA. I advised him the same as did today many years back. However the short term profit he looks on back then makes him suffer now. Yes for sure he has yet to complete his ACCA and yet the big money is still not his!
You can refer to my other article under “my thought and memory lane” to find other inspiration that I might give you. Short term windfall will not make you rich and successful. I have seen enough of this example for the past 10 years. Earning 3.5k at the age of 20 doesn’t mean you can earn 35k when you reach 30s (may be 35K Thai baht). Despite getting such high pay at that age will bring your ego to a greater height and increase your greediness on spending especially on luxury item. You might not be able to hold back when ego and greediness take over you. I have really seen this , live example.So choose for your future and life simple. Stay tune with layman.
His life was simple and brought up three Children. Grand father has a more exciting life but also I don’t think he also face much problem of choosing. So we at this generation especially those who born after the 70s what is the issues then? I would say the social issues?
Those who born after 70s are considered as the lucky group as they do not face any big crisis war and etc. They were born in the new age and the world has since develop from the 70s. no food crisis, they have food, more and more entertainment coming and more choices so that is the reason they have the choice and need to choose.
However my dear friend out there, don’t be too short sighted. Let me share this with you. Almost 10 years back I have to make a choice. A choice which I believe is so important and determines who I am now. A 3.5K monthly income which I need to work only a few days in a week or I should say not more than 15 hours a week. The other one is to give up the 3.5k job which you work only 15 hrs a week and work for a monthly income of 1.8k for almost 25 days a month 18 hrs a day.
Well I then choose to be an auditor rather than a lecturer. Why long term career plan rather than short term benefits. Further in my working life, I do lecture part time and earn extra income. However if I insist of my 3.5k income then, I might still be a lecturer now and forgo all the exciting moments and I won’t be going to Bangkok and now in Beijing looking at the beautiful scenery on Chao Yang Park.
Just chat with a student and he also facing a dilemma whether to gave up his part time job (he got 4 part time jobs) or slow down on his ACCA study. He needs to choose. Well my advice is simple, what do you like? He is worried about economic crisis and thinks a lot on things that yet to happen (which I believe all of us have gone through).
Let not be so short sighted, for you the priority is to get your ACCA done then you can bargain out there. Unless you are financially not stable, then you have no choice. However he has a choice and he can choose either way. His situation makes me think of another student of mine, whom thinks that finding money is more important than getting ACCA. I advised him the same as did today many years back. However the short term profit he looks on back then makes him suffer now. Yes for sure he has yet to complete his ACCA and yet the big money is still not his!
You can refer to my other article under “my thought and memory lane” to find other inspiration that I might give you. Short term windfall will not make you rich and successful. I have seen enough of this example for the past 10 years. Earning 3.5k at the age of 20 doesn’t mean you can earn 35k when you reach 30s (may be 35K Thai baht). Despite getting such high pay at that age will bring your ego to a greater height and increase your greediness on spending especially on luxury item. You might not be able to hold back when ego and greediness take over you. I have really seen this , live example.So choose for your future and life simple. Stay tune with layman.
Capital Employed
This time I shall put up a new column on “Corporate Finance” and let discuss about capital employed as this is a key topic under such economic situation.
So what is capital employed? In simple it is the capital you used to fund the operation of the Company.. well it made up of two simple elements which is the capital that you invest and the financing you obtain to run the business. To be academic for your understanding, it is your capital financing and your debt financing or in another way to explain is the Shareholder equity plus your long term liability.
The word finance can easily mean the cash you need to fund the business. So from your financial data how are you going to examine it? My advice is you do it step by step. First of all prepare your budgeted profit and loss account and check out three important item in you profit and loss account. First you sales; secondly your profit and thirdly any extraordinary item.
With that in mind prepare a pro-forma balance sheet based on your budgeted profit and loss account. In your pro-forma balance sheet include your capital expenditure for the coming year. Look for a company to continue operation, it is impossible to take out CAPEX but to reduce or manage CAPEX. Then you will find a gap in the pro-forma balance sheet as the balance sheet will not balance as something will be missing.
Split your pro-forma balance sheet into 5 parts which is
1. Non Current Asset
2. Current Asset - taking away deposit, prepayment and other non monetary item.
3. Current Liability- taking away non monetary item.
Add the three items above and less the following:
Long term liabilities and the shareholder equity
If the balance is positive mean you need to more funds injected and if the balance is negative then it is fine as the capital employed is sufficient.
Well the next thing you need to have a close examination is your short term liquidity by looking at you working capital cycle by calculating your stock turnover days add debtor turnover days and less your creditor days. You could also evaluate it by value. This help to view the healthiness of your working capital and bear in mind this evaluation does not include your CAPEX evaluation.
Try it will give you a good indication on your cash requirement.
So what is capital employed? In simple it is the capital you used to fund the operation of the Company.. well it made up of two simple elements which is the capital that you invest and the financing you obtain to run the business. To be academic for your understanding, it is your capital financing and your debt financing or in another way to explain is the Shareholder equity plus your long term liability.
The word finance can easily mean the cash you need to fund the business. So from your financial data how are you going to examine it? My advice is you do it step by step. First of all prepare your budgeted profit and loss account and check out three important item in you profit and loss account. First you sales; secondly your profit and thirdly any extraordinary item.
With that in mind prepare a pro-forma balance sheet based on your budgeted profit and loss account. In your pro-forma balance sheet include your capital expenditure for the coming year. Look for a company to continue operation, it is impossible to take out CAPEX but to reduce or manage CAPEX. Then you will find a gap in the pro-forma balance sheet as the balance sheet will not balance as something will be missing.
Split your pro-forma balance sheet into 5 parts which is
1. Non Current Asset
2. Current Asset - taking away deposit, prepayment and other non monetary item.
3. Current Liability- taking away non monetary item.
Add the three items above and less the following:
Long term liabilities and the shareholder equity
If the balance is positive mean you need to more funds injected and if the balance is negative then it is fine as the capital employed is sufficient.
Well the next thing you need to have a close examination is your short term liquidity by looking at you working capital cycle by calculating your stock turnover days add debtor turnover days and less your creditor days. You could also evaluate it by value. This help to view the healthiness of your working capital and bear in mind this evaluation does not include your CAPEX evaluation.
Try it will give you a good indication on your cash requirement.
Sunday, March 1, 2009
Chairman retired. Can CEO replace the position on a temporary basis?
Well now a day student can really think especially when it comes to imaginative question like the above.
If you know my style, the answer is always Yes or No !
When a Chairman retired or before the chairman retired the Company must have a succession plan. The Nomination Committee should plan for this as this is one of the functions of Nomination committee as the governing committee for nomination of Directors and Chairman.
Before a CEO is nominated to replace the Chairman on temporary or permanent basis, the nomination committee of the Board should evaluate whether there are other more suitable candidate.
For example, there is a senior independent Director in the Company, he/she should be the first choice to hold the position of Chairman on a temporary basis prior to the appointment of new Chairman. Don’t forget that the Senior independent director is also a very important position for a Company. He/She is seen to be the communication channel between the Board and the Shareholder and he is the main representative for all the minority shareholder in the Company.
Therefore in my view, the Senior Independent director should be the first choice for the succession on temporary or permanent basis. If the Company does not have the Senior independent director, well the next should be the independent director. We should encourage an independent director to be the chairman instead of the CEO.
Well in simple unless you don’t have any choice as the above (which I think is impossible ) then you appoint the CEO, why it is because of the spirit of CG.
If you know my style, the answer is always Yes or No !
When a Chairman retired or before the chairman retired the Company must have a succession plan. The Nomination Committee should plan for this as this is one of the functions of Nomination committee as the governing committee for nomination of Directors and Chairman.
Before a CEO is nominated to replace the Chairman on temporary or permanent basis, the nomination committee of the Board should evaluate whether there are other more suitable candidate.
For example, there is a senior independent Director in the Company, he/she should be the first choice to hold the position of Chairman on a temporary basis prior to the appointment of new Chairman. Don’t forget that the Senior independent director is also a very important position for a Company. He/She is seen to be the communication channel between the Board and the Shareholder and he is the main representative for all the minority shareholder in the Company.
Therefore in my view, the Senior Independent director should be the first choice for the succession on temporary or permanent basis. If the Company does not have the Senior independent director, well the next should be the independent director. We should encourage an independent director to be the chairman instead of the CEO.
Well in simple unless you don’t have any choice as the above (which I think is impossible ) then you appoint the CEO, why it is because of the spirit of CG.
let kick start with corporate governance
so after result announce it is time for all of you to buck up again let start with the followi:
What is Corporate Governance?
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that appropriate governance structure in place.
The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulation and the shareholders in general meeting.
The directors have the free drive to bring their companies forward, but exercise that freedom within a framework of effective accountability. This is the essence of any system of good corporate governance.
In a more complicated explanation why we need corporate governance?
There are three type of business vehicles that is commonly available namely
1. Sole proprietor
2. Partnership
3. Incorporation (Limited Company)
All three types of business vehicles have their own characteristics
Sole proprietor
Sole proprietor is the earliest type of business vehicles set up to conduct business. The key characteristic of a sole proprietor is that the owner of the vehicle is also the worker of the company. The business is conduct on a small capital base and in a smaller scale.
Partnership
Partnership is known as the expansion of the sole trader. Where sole trader is operating in a one owner one runner scale, the partnership is running on more than one owner and more than one operator. The capital requirement for the business is higher and do require more than one operator.
Incorporation
This is what we commonly known as a “Company”. In the operation of a Company, there are two separate parties that exist, namely: Shareholder and the Director. Unlike the other business vehicle mentioned, the ownership and the operator of the Company will be separated.
The Owner of the Company is the shareholder whereas the operator of the Company is the director. The running of the Company will then be regulated by the Companies Act. In simple, the shareholder will invest in the Company and at the same time they also appoint the operator of the Company, the Director to run.
Therefore the Director will be accountable to the Shareholder on the operation of the Company. This also led to the Company being run by Director or manager who is distinct from the owners.
Governance issues do not appear to be serious under the sole proprietor and partnership model. It is when the incorporation model begins to become a force of business entity and due to the collapse and fraud case of several big corporations during the 20th century that lead to the governance issues. At that time, various interest group is concern over the governance issue hence give birth to the concept of corporate governance.
What is Corporate Governance?
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that appropriate governance structure in place.
The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulation and the shareholders in general meeting.
The directors have the free drive to bring their companies forward, but exercise that freedom within a framework of effective accountability. This is the essence of any system of good corporate governance.
In a more complicated explanation why we need corporate governance?
There are three type of business vehicles that is commonly available namely
1. Sole proprietor
2. Partnership
3. Incorporation (Limited Company)
All three types of business vehicles have their own characteristics
Sole proprietor
Sole proprietor is the earliest type of business vehicles set up to conduct business. The key characteristic of a sole proprietor is that the owner of the vehicle is also the worker of the company. The business is conduct on a small capital base and in a smaller scale.
Partnership
Partnership is known as the expansion of the sole trader. Where sole trader is operating in a one owner one runner scale, the partnership is running on more than one owner and more than one operator. The capital requirement for the business is higher and do require more than one operator.
Incorporation
This is what we commonly known as a “Company”. In the operation of a Company, there are two separate parties that exist, namely: Shareholder and the Director. Unlike the other business vehicle mentioned, the ownership and the operator of the Company will be separated.
The Owner of the Company is the shareholder whereas the operator of the Company is the director. The running of the Company will then be regulated by the Companies Act. In simple, the shareholder will invest in the Company and at the same time they also appoint the operator of the Company, the Director to run.
Therefore the Director will be accountable to the Shareholder on the operation of the Company. This also led to the Company being run by Director or manager who is distinct from the owners.
Governance issues do not appear to be serious under the sole proprietor and partnership model. It is when the incorporation model begins to become a force of business entity and due to the collapse and fraud case of several big corporations during the 20th century that lead to the governance issues. At that time, various interest group is concern over the governance issue hence give birth to the concept of corporate governance.
Saturday, February 28, 2009
The Gap - for the individual in crisis
This is a cold Saturday afternoon and guesses what; I am fed up with my PDA phone as I still can’t fix my PDA phone to receive the MMS news. Useless I and I believe this is not the phone problem, not the network problem and it is my problem!
What problem is that, it was me who don’t understand how to operate the PDA phone and it was me who don’t get myself fully understand the phone and this is really my fault. Same here throughout the whole world, do you understand what is the economic crisis about. Well I don’t claim I know everything but let exchange my two cents worth of opinion with all of you at least I believe it is still two cents worth.
There were some bubbles created by the mankind and the bubble become bigger and bigger so when the bubble bust the sound is loud and clear.
For another example, when you go purchase property worth 1 million at a price of 5 millions, do we expect to resale at 5 million or more? This is exactly the case right now.
Many people have pay 5 million for the 1 million worth of asset. So at good time no one bother as everyone will keep on spending as the believe they can afford, but during bad time when it is under distress and the liquidity is not there the bubble of 5 million will burst and it will definitely fall below 1 million.
Why below 1 million, it is because of a simple equation demand and supply. Less people who can afford to buy and here those who can afford knew it and they wish for a better bargain! Isn’t it that simple? Or everyone is still trying to complicate the issues? I wonder?
So if you are one of them who caught by the situation, what should you do? My view is, don’t dream on, it will not be at 5 million at any time if it is only worth a million. So forget about the 5 million starts it all over again.
For those of you out there who are under employment just like me or those of you who are looking for a job this is a challenging time and we should keep it to the basic theory of life which is “SIMPLE”
All of us have a gap to fill and the theory of having saving for rainy days is always right, and never wrong. Everyone out there should now create your own spending budget and your spending habits.
In the eye of many, I am living with a lavish lifestyle, but I spend with my budget and things that I can afford and I seldom “BLOW” it. In fact I am not a rich person or “cash rich” type as most of my income goes to the family for the past years. Well I am still having my Cigars and wine, getting myself nice clothing shoes and with style. But this is all within the key word “BUDGET” and never over spent, mind you and the plastic cash, your credit cards is dangerous, always keep the balance at zero.
I mechanical pencil that I am using now can now put into the museum where I have used it since my primary. I am still wearing the same Seiko and mine of I still go to those barber for my hair cut even though my mum use to complain about that as in there is no “hair style from there”. Who cares!
You can be successful and at the same time be simple. I know of a few billionaires who used to have their meal with me in a small store for “Yen Tau for”. They with their simple lifestyle, win the battle of economic crisis and their company are disaster prove.
So keeping it simple is important. Don’t get me wrong as in keeping simple mean don’t spend. Keeping it simple mean spend at your budget and do not over spend. Spend on item which worth the value and don’t simply spend. I wish to own a ROLEX submarine and when the time comes I will definitely get one but I will not spend 10 ROLEX watches one is more than enough.
I will not insist of a branded shirt worth RM 400 if the tailor made shirt in Bangkok fit me well with just RM 100, I am comfortable with that. That RM 300 is what I consider as a Gap. Having the extra 9 Rolex is what I consider as a GAP too.
It is nothing wrong to own Rolex big house or big car if you can afford it but watch the way you spend it must be according to your purchase power and make sure it doesn’t hit your reserve fund.
Start it now before too late and stick on to it with modest life. Having sushi in restaurant of a shopping mall meet the same objective compared to having it in a six star hotel that is to fill need or hunger. If you can afford it, no harm having it in a six star hotel else don’t put yourself into a crisis by having it is a six star hotel just to show off, it does serve any purposes.
Dear all, start crisis management even before crisis and manage it well. No point doing crisis management during crisis, it might be too late and regretful.
When the mind of man is unattached to the ups and downs of life, but is able to maintain equanimity under all circumstances, good physical health will be assured. Illness is caused more by malnutrition of the mind than of the body. Doctors speak of vitamin deficiency; I will call it the deficiency of "Vitamin G", and I will recommend the repetition of the Name of God, contemplation of the Glory and Grace of God. That is the "Vitamin G" medicine. Medicine for ill-health is one third of the treatment. Regulated life and good habits are two-thirds. By my beloved Swami-Sai Baba
What problem is that, it was me who don’t understand how to operate the PDA phone and it was me who don’t get myself fully understand the phone and this is really my fault. Same here throughout the whole world, do you understand what is the economic crisis about. Well I don’t claim I know everything but let exchange my two cents worth of opinion with all of you at least I believe it is still two cents worth.
There were some bubbles created by the mankind and the bubble become bigger and bigger so when the bubble bust the sound is loud and clear.
For another example, when you go purchase property worth 1 million at a price of 5 millions, do we expect to resale at 5 million or more? This is exactly the case right now.
Many people have pay 5 million for the 1 million worth of asset. So at good time no one bother as everyone will keep on spending as the believe they can afford, but during bad time when it is under distress and the liquidity is not there the bubble of 5 million will burst and it will definitely fall below 1 million.
Why below 1 million, it is because of a simple equation demand and supply. Less people who can afford to buy and here those who can afford knew it and they wish for a better bargain! Isn’t it that simple? Or everyone is still trying to complicate the issues? I wonder?
So if you are one of them who caught by the situation, what should you do? My view is, don’t dream on, it will not be at 5 million at any time if it is only worth a million. So forget about the 5 million starts it all over again.
For those of you out there who are under employment just like me or those of you who are looking for a job this is a challenging time and we should keep it to the basic theory of life which is “SIMPLE”
All of us have a gap to fill and the theory of having saving for rainy days is always right, and never wrong. Everyone out there should now create your own spending budget and your spending habits.
In the eye of many, I am living with a lavish lifestyle, but I spend with my budget and things that I can afford and I seldom “BLOW” it. In fact I am not a rich person or “cash rich” type as most of my income goes to the family for the past years. Well I am still having my Cigars and wine, getting myself nice clothing shoes and with style. But this is all within the key word “BUDGET” and never over spent, mind you and the plastic cash, your credit cards is dangerous, always keep the balance at zero.
I mechanical pencil that I am using now can now put into the museum where I have used it since my primary. I am still wearing the same Seiko and mine of I still go to those barber for my hair cut even though my mum use to complain about that as in there is no “hair style from there”. Who cares!
You can be successful and at the same time be simple. I know of a few billionaires who used to have their meal with me in a small store for “Yen Tau for”. They with their simple lifestyle, win the battle of economic crisis and their company are disaster prove.
So keeping it simple is important. Don’t get me wrong as in keeping simple mean don’t spend. Keeping it simple mean spend at your budget and do not over spend. Spend on item which worth the value and don’t simply spend. I wish to own a ROLEX submarine and when the time comes I will definitely get one but I will not spend 10 ROLEX watches one is more than enough.
I will not insist of a branded shirt worth RM 400 if the tailor made shirt in Bangkok fit me well with just RM 100, I am comfortable with that. That RM 300 is what I consider as a Gap. Having the extra 9 Rolex is what I consider as a GAP too.
It is nothing wrong to own Rolex big house or big car if you can afford it but watch the way you spend it must be according to your purchase power and make sure it doesn’t hit your reserve fund.
Start it now before too late and stick on to it with modest life. Having sushi in restaurant of a shopping mall meet the same objective compared to having it in a six star hotel that is to fill need or hunger. If you can afford it, no harm having it in a six star hotel else don’t put yourself into a crisis by having it is a six star hotel just to show off, it does serve any purposes.
Dear all, start crisis management even before crisis and manage it well. No point doing crisis management during crisis, it might be too late and regretful.
When the mind of man is unattached to the ups and downs of life, but is able to maintain equanimity under all circumstances, good physical health will be assured. Illness is caused more by malnutrition of the mind than of the body. Doctors speak of vitamin deficiency; I will call it the deficiency of "Vitamin G", and I will recommend the repetition of the Name of God, contemplation of the Glory and Grace of God. That is the "Vitamin G" medicine. Medicine for ill-health is one third of the treatment. Regulated life and good habits are two-thirds. By my beloved Swami-Sai Baba
Sunday, February 22, 2009
ACCA results out!
It took me sometime to settle down in Beijing and this Sunday finally have some time to write a few words to all of you.
Yes you might pass and no you might failed
But regardless of whether you pass or you failed, the most important thing is what your next steps is?
For those who passed, you should get yourself prepared for the next challenges, either it is time to find a job under such challenging economic situation or complete the remaining ACCA papers that you need to.
For those who failed, sometime knowing why you failed is a task and often no answer. So forget about finding out the reason but get yourself prepared for the next sitting.
So tow category of you reading the post here. One those who graduate and congratulate to those affiliate, two those of you who still need to continue your journey as ACCA students.
The Affiliate
If you are new to the job market my advice is don’t be choosy under such economic situation, if you have a job now you are lucky and need to thank GOD.
So where to start, I will always recommend the traditional way, The Accounting firm regardless of audit tax or corporate finance.
Which firm Big 4 or others, well you should of course aim for the big 4 but it is not the end of the world if you are not recruited by then. Try other medium firm and if you are good you will have a fair good chance if your career path in those Company. It is not important whether you start off with the big 4 or not but the right firm with the right attitude. Your attitude on your first job will decide your future. (Please refer to my previous post choosing and New Year resolution).
The students
You should now plan properly for those subjects you are taking.
Bear in mind, today is 22nd Feb and let’s assume exam date falls on 1st June, you should have 3 months left for exam preparation.
So the first thing you do is to plan for your time which means a good time table.
Get all the date down (I used to use Microsoft Outlook) and key in your work schedule, lecture schedule IRC and any important schedule that will occupied your schedule and all these date should be out by now. (Sacrifice your dates and unnecessary appointment)
Check after you have key in those schedules and you will find out that the time left for yourself is actually limited.
So what should you do? Get yourself prepared. How? Assume you are taking F8 P1 and P2 (for the benefit of JE one of my student) you should now schedule the revision time for the three subjects.
For the month of March and April, you should have all your revision done according to your class schedule. For the Month of May you should do a reverse strategy.
You should plan according to your exam date and IRC date systematically. (Kindly refer to the excel sheet, request a copy if you need it by email).
Then make sure you have sufficient sitting of PYQs. If you wonder how many sittings, my recommendation is always 1994 sitting till recent, else minimum 15 sittings ( a must). Please refer to my previous article – The Power of PYQ.
That should be the minimum effort that you should put in.
Good Luck
Yes you might pass and no you might failed
But regardless of whether you pass or you failed, the most important thing is what your next steps is?
For those who passed, you should get yourself prepared for the next challenges, either it is time to find a job under such challenging economic situation or complete the remaining ACCA papers that you need to.
For those who failed, sometime knowing why you failed is a task and often no answer. So forget about finding out the reason but get yourself prepared for the next sitting.
So tow category of you reading the post here. One those who graduate and congratulate to those affiliate, two those of you who still need to continue your journey as ACCA students.
The Affiliate
If you are new to the job market my advice is don’t be choosy under such economic situation, if you have a job now you are lucky and need to thank GOD.
So where to start, I will always recommend the traditional way, The Accounting firm regardless of audit tax or corporate finance.
Which firm Big 4 or others, well you should of course aim for the big 4 but it is not the end of the world if you are not recruited by then. Try other medium firm and if you are good you will have a fair good chance if your career path in those Company. It is not important whether you start off with the big 4 or not but the right firm with the right attitude. Your attitude on your first job will decide your future. (Please refer to my previous post choosing and New Year resolution).
The students
You should now plan properly for those subjects you are taking.
Bear in mind, today is 22nd Feb and let’s assume exam date falls on 1st June, you should have 3 months left for exam preparation.
So the first thing you do is to plan for your time which means a good time table.
Get all the date down (I used to use Microsoft Outlook) and key in your work schedule, lecture schedule IRC and any important schedule that will occupied your schedule and all these date should be out by now. (Sacrifice your dates and unnecessary appointment)
Check after you have key in those schedules and you will find out that the time left for yourself is actually limited.
So what should you do? Get yourself prepared. How? Assume you are taking F8 P1 and P2 (for the benefit of JE one of my student) you should now schedule the revision time for the three subjects.
For the month of March and April, you should have all your revision done according to your class schedule. For the Month of May you should do a reverse strategy.
You should plan according to your exam date and IRC date systematically. (Kindly refer to the excel sheet, request a copy if you need it by email).
Then make sure you have sufficient sitting of PYQs. If you wonder how many sittings, my recommendation is always 1994 sitting till recent, else minimum 15 sittings ( a must). Please refer to my previous article – The Power of PYQ.
That should be the minimum effort that you should put in.
Good Luck
Tuesday, January 20, 2009
The A Star Students
Few days back I was updating my profile after using the same profile write-up for many years and yet the old one doesn't seem to be impressive and reflective enough after "N" years. Therefore this time I took some serious effort to update the profile and at the same time ensure that the new profile is not exaggerated which is a common problem for profile writing.
With that in mind I have sent the draft copy for several friends of mine from different background to have a review on it. This is to ensure that the profile written is "true and fair", most importantly not exaggerated as I keep on telling those reviewer to point out to me and "don't give me face" on that. True enough I am glad that those reviewers have done a good "slapping" job on the profile but at the same time someone highlighted this to me and I added this into the profile.
The extract:
"He was the ex- president for the ACCA Student Ambassador and promoted ACCA's student's activities in Malaysia. Among the activities initiated during his tenure as students ambassador included study and exam technique seminar, which has benefited many ACCA students. The project begin since Year 1999 and NKT had extend his initiative starting from Penang, Ipoh, Klang Valley (Public and with specific institution) Johor Bharu, Kota Kinabalu, Kuching, Miri Batu Pahat, Muar and other locations. Through these years of interaction with students all around, he understands the needs and problems faced by students and he is highly regarded by many students and often acts as personal mentor for some outstanding individuals."
The first study and exam technique talk begin in Penang and was organized by the Penang SA team. If my memory is not short, the title for the seminar was "The A Star Students". This was also the first ACCA SA event in Penang after I took over as the President of SA and the first ACCA student event in Penang that provide exam and study technique to the ACCA students in Penang.
The objectives of the seminar were simple, 1) to promote the ACCA student activities in Malaysia, 2) to share the study and exam technique of the ACCA Star student in Malaysia which kick started in Penang.
The first event was held in IPG Penang Burmah road campus. It was attended by about 80 students and I was pleased with the response and it motivated me and my SA team to extend such activities through to the other state of Malaysia. If I am right the second stop was Kuching and then followed by Kota Kinabalu. What surprised me was the event life span continued even after me stepping down from my term.
It continued as ACCA Malaysia office events and my personal community service events to the ACCA students all around Malaysia. I traveled to many parts of Malaysia to share this with students all around and hope this might be one of the ways to help students passing their exam as many of us know that taking ACCA exam might be a painful exercise. I must also give credit to the ACCA Malaysia office for organizing it not only in the major city but also in the smaller town in Malaysia. There is lot of ACCA member out there whom also welcomed such event. Alexandar Chin (present UK council member), the ACCA chairlady from Sabah, whom coordinated and organized the second talk in Kota Kinabalu have more than 150 students turn out for the events. One of the highest turnout rates!
I am not bias toward the place or town which such talks should be carry out. My idea is to go to any place when there is a need to have such talk and I am able to contribute to the ACCA student who wishes to enhance their chance of passing exam. While conducting the talk, many ACCA students shared their problem with me and we have our discussion after the talk while having break or tea. From there I slowly understand more and more of problem facing ACCA students on their studies and from time to time I will enhance my next presentation with all those experience gained from the previous talk and experience shared by students all around Malaysia.
I will usually provide them my email so that they can contact me should they need some assistant or some motivation. After 10 solid years apart I am still received greeting from some of them during festive. Recent months, I was residing in Penang, while waiting for my departure to the next port of embarkation. There were times where stranger that came up to me and greet me. They are some of those many participants who joined the talk and serious I can't recognise any of them.
Well they remembered me and the talk and most importantly 2 highlights in the talk 1) the Tai Chi (originated by Jana) 2) my self-introduction during the talk which was quoted in the following manner:
Normally people call me Ray
Those who wanted to defame me call me STING RAY
Those who like me call me SUGAR RAY
Those who love me call me SWEET SUGAR RAY
And those who are here to call will call me SWEETEST SUGAR RAY after today session
Well I am not sure whether in the near future (or even ever) I will conduct another session of such talks but it will remain in the memory of mine. 美好的回忆
Club 99
Once upon a time, there lived a King who, despite his luxurious lifestyle, was neither happy nor content.
That's the "99 club". |
Sunday, January 18, 2009
Choosing
This Saturday morning is rather cold, well normally this is the indication that Chinese New Year is coming and here we are in the New Year. As what I mentioned before, this is the beginning of a new cycle of my life as another 10 years will see another challenging cycle.
As usual Saturday and Sunday will usually be a great reading time for me. I have a habit to separate the different section of the newspaper and always start with the business column. There are two articles in the business section that attracted my attention. Well this is not about the main story but about two prominent Malaysian and how they dealt with their up and down of their career.
It might be two different stories but a common point, “a decision to be made at a specific point of time”. I have no intention to illustrate what is in the article but I would like to share with you what is my thought after reading the articles.
Everyone at the beginning of their career life, hope to be successful and one day achieve their social status. For example, an accountant might eventually hope to become a CFO and some executive out there might want to be a CEO and consider that is as the peak of their career life. They would regard that as successful in life.
Well friend always ask me whether I considered myself a successful person. I always said I don’t know and my measure of success might be different from the others. When what you gain is more than what you lost then you consider yourself successful. This is not measured only on monetary term but also the qualitative measurement which I consider as the key part for the measurement of success.
Executives who are now holding key position might consider themselves successful and most of the time they are not willing to step down from their position and holding on to it. One of the reasons might be economical reason where you got to live with the pay package given to you. The other reason might be the social status given to you that you are holding on to it.
Holding to the social status might be the main reasons as compared to the economical reasons. For example, I have a friend who is holding senior position in a company. He admitted to me that if he were to open a small shop, and do a small business his income might be higher than what he is earning now, however he will lost his social status by being a senior executive in a big corporation.
That might sound ridiculous to many of you, but that is the true fact out there. However the article I read today is different. It is all about a prominent Malaysian giving up a high level CEO position for the reason of family. That easily cost a few millions of income a year yet she opts to be out and spend more time with her family.
Yes economical issues will still be there and it is rather naïve of you thinking that once should stop every activity with the decision made. You might not be a CEO of a conglomerate but you might start a small business or doing other work that could compensate your income. Believe me what you gain might be more than the social status that you have lost.
To those of you out there, money when it come to certain level might not be your concern as you have built up the skill and experience to acquire it, it is the thirst for other needs or wants in life that dry your energy out and make you a slave towards the other needs and wants to you are looking forwards.
On the other hand how about having a fall on your career life? It is common to talk about job retrenchment, unable to get a job and it is the employer market now. However to me this might just be a “life cycle” and it is not threatening to your career. What is more crucial and critical here is that how should a person dealt with when he/she falls from a hero to zero?
I have personally gone through that. There are three things that you should do when you faced such situation. First you got to be patient when such situation comes after you. The fall might be due to some reasons that is out of your control and not within your plan. There will be a solution out there but you just need to be patient for the time to come and hold on to it, never give up.
Secondly, do not leave your life empty at this period of time. Fill up your life with healthy activities which add value to you. For examples, reading, traveling social works and others. Equip yourself and wait for the time to come. Get yourself ready for the next challenges to come. Prepare yourself for the challenges.
Thirdly, take off all noises and disturbance surrounding you. You might not want to hear baby crying, grumbling from others, discouragement from friends and families, all these to be a re rubbish and stay away from it to maintain your emotion. Once a person is facing challenges in life those disturbance will distract him and it will de-motivate you from think “you can”.
I am not saying that one should give up life easily but when you are facing such situation and need to make a choice thin k about what I have written and hope I share a fair piece with everyone out there. Be aggressive in life but when it is time to slow down or sacrifice some part of it act maturely and weight the gain and loss.
Well after I finish this article, I am going to write some simple goals in the next 10 years. Simple goal starting from buying a Rolex watch to a dream of getting financial freedom will be in the list. You have your choice but again when you face challenges in life act wisely.
Understand what we are doing would build up our self confidence. All the best!
As usual Saturday and Sunday will usually be a great reading time for me. I have a habit to separate the different section of the newspaper and always start with the business column. There are two articles in the business section that attracted my attention. Well this is not about the main story but about two prominent Malaysian and how they dealt with their up and down of their career.
It might be two different stories but a common point, “a decision to be made at a specific point of time”. I have no intention to illustrate what is in the article but I would like to share with you what is my thought after reading the articles.
Everyone at the beginning of their career life, hope to be successful and one day achieve their social status. For example, an accountant might eventually hope to become a CFO and some executive out there might want to be a CEO and consider that is as the peak of their career life. They would regard that as successful in life.
Well friend always ask me whether I considered myself a successful person. I always said I don’t know and my measure of success might be different from the others. When what you gain is more than what you lost then you consider yourself successful. This is not measured only on monetary term but also the qualitative measurement which I consider as the key part for the measurement of success.
Executives who are now holding key position might consider themselves successful and most of the time they are not willing to step down from their position and holding on to it. One of the reasons might be economical reason where you got to live with the pay package given to you. The other reason might be the social status given to you that you are holding on to it.
Holding to the social status might be the main reasons as compared to the economical reasons. For example, I have a friend who is holding senior position in a company. He admitted to me that if he were to open a small shop, and do a small business his income might be higher than what he is earning now, however he will lost his social status by being a senior executive in a big corporation.
That might sound ridiculous to many of you, but that is the true fact out there. However the article I read today is different. It is all about a prominent Malaysian giving up a high level CEO position for the reason of family. That easily cost a few millions of income a year yet she opts to be out and spend more time with her family.
Yes economical issues will still be there and it is rather naïve of you thinking that once should stop every activity with the decision made. You might not be a CEO of a conglomerate but you might start a small business or doing other work that could compensate your income. Believe me what you gain might be more than the social status that you have lost.
To those of you out there, money when it come to certain level might not be your concern as you have built up the skill and experience to acquire it, it is the thirst for other needs or wants in life that dry your energy out and make you a slave towards the other needs and wants to you are looking forwards.
On the other hand how about having a fall on your career life? It is common to talk about job retrenchment, unable to get a job and it is the employer market now. However to me this might just be a “life cycle” and it is not threatening to your career. What is more crucial and critical here is that how should a person dealt with when he/she falls from a hero to zero?
I have personally gone through that. There are three things that you should do when you faced such situation. First you got to be patient when such situation comes after you. The fall might be due to some reasons that is out of your control and not within your plan. There will be a solution out there but you just need to be patient for the time to come and hold on to it, never give up.
Secondly, do not leave your life empty at this period of time. Fill up your life with healthy activities which add value to you. For examples, reading, traveling social works and others. Equip yourself and wait for the time to come. Get yourself ready for the next challenges to come. Prepare yourself for the challenges.
Thirdly, take off all noises and disturbance surrounding you. You might not want to hear baby crying, grumbling from others, discouragement from friends and families, all these to be a re rubbish and stay away from it to maintain your emotion. Once a person is facing challenges in life those disturbance will distract him and it will de-motivate you from think “you can”.
I am not saying that one should give up life easily but when you are facing such situation and need to make a choice thin k about what I have written and hope I share a fair piece with everyone out there. Be aggressive in life but when it is time to slow down or sacrifice some part of it act maturely and weight the gain and loss.
Well after I finish this article, I am going to write some simple goals in the next 10 years. Simple goal starting from buying a Rolex watch to a dream of getting financial freedom will be in the list. You have your choice but again when you face challenges in life act wisely.
Understand what we are doing would build up our self confidence. All the best!
Friday, January 16, 2009
Accountant of the 21st Century
Read an article in the Star. It is all about the implementation of the FRS 139.
Well when all the article is worried about the accounting treatment, here I am looking at the other side of the concerns.
Accountant of the 21st century facing lots of challenges. Now with the implementation of FRS 139, what else the accountants need to worry about?
First of all accountant need to understand further on "what is financial instrument". Whatever stated in the text book or reference books are merely books. What happen in the real financial market is ever changing. Accountant need to keep them-selves updated with that. Malaysia might not be as advanced as other countries in the development of financial instruments (which to me is a blessing under the current economic crisis) however having more in-depth understanding will help the accountant to prepare for the future challenges. For examples, do you understand what Structural Products is? Something New?
Secondly, the off balance sheet instrument, this might also be a challenge for the accountant. The basic point is how to identified, or just ask a simple question: do you know what is the "off balance item about". This is more of the qualitative consideration rather than the quantitative consideration. Sound easy but when you come to the real life
Then here come the third consideration where you need to look for embedded derivative in a contract or even some other contract which from the surface doesn't seem to contain a derivative. Here is the problem, are our accountant equipped with such knowledge?
Potential and future accountants do not look at the accounting standards only, look beyond the standard and have more understanding of the fundamental of the financial instrument. This is the whole new world of challenges!
Stay tune for part 2
Wednesday, January 14, 2009
人生就是为别人而活
人生就是为别人而活
今天看电视节目时，听到这一句话 心里有所感想
为什么要为别人而活呢？
- 为别人而活是因为责任，那么这是高人一等的情操, 今生无悔
- 为别人而活是因为生存，那么这是为势所逼的现实， 情非得己
- 为别人而活是因为面子，那么这是多么可悲的譏磨，可耻可悲
人的一生， 一定会为别人而活， 只是原因何在?是今生无悔，情非得己， 还是可悲呢？
不要因为你为别人而活而感到伤悲， 为了责任为了生存， 有何悲呢？
2009 第一章，为别人而活
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