(ii) Procedures on EPS
Generally 1 mark for each procedure explained:
– Discuss with management the requirements of IAS 33 ad request that management recalculates
the EPS in accordance with those requirements
– Review board minutes to confirm the authorisation of the issue of share capital, the number of
shares and the price at which they were issued
– Confirm the share issue complies with the company’s legal documentation such as the
memorandum and articles of association
– Inspect any other supporting documentation for the share issue, such as a share issue
prospectus
– Recalculate the weighted average number of shares for the year to 31 May 2015
– Recalculate EPS using the profit as disclosed in the statement of profit or loss and the weighted
average number of shares
– Discuss with management the existence of any factors which may impact on the calculation and
disclosure of a diluted EPS figure, for example, convertible bonds
– Read the notes to the financial statements in respect of EPS to confirm that disclosure is
complete and accurate and complies with IAS 33
Maximum marks 8
Professional marks for the overall presentation, structure and logical flow of the briefing notes, and for the clarity
of the evaluation and discussion provided.
Maximum marks 4
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