Evaluation of audit risks and other matters to be considered

½ mark for identification (to a maximum of 5 marks) and up to 1½ further marks for  evaluation and ½ mark for correct reference to relevant IAS/IFRS (max 1 mark)

– Classification of non-controlling interests (IAS 28)
 – Auditors lack knowledge of activities of non-controlling interests
 – Bonus and potential earnings management
 – Change of accounting estimates (IAS 8)
 – Lack of group finance director
 – Capitalisation of dismantling costs (IAS 16) 
 – Provision – discounting and finance charge (IAS 37)
 – Deferral of grant income (IAS 20)
 – Potential provision or contingent liability (IAS 37)
 – Mid-year acquisition
 – Goodwill on acquisition – subjective (IFRS 3)
 – Retranslation of Brass Co financial statements (IAS 21)
 – Retranslation of goodwill
 – Adjustments necessary to bring in line with group accounting policies
 – Intra-group transactions

Maximum marks 18