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2024 May G2

The document provides examiners' comments on the performance of examinees in various accounting, auditing, and management subjects. Overall, performance varied from Below Average to Good across different questions, with specific strengths and weaknesses noted in areas such as numerical calculations, theoretical understanding, and application of concepts. The comments highlight the need for improved understanding and application of key accounting and auditing principles among examinees.

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0% found this document useful (0 votes)
6 views8 pages

2024 May G2

The document provides examiners' comments on the performance of examinees in various accounting, auditing, and management subjects. Overall, performance varied from Below Average to Good across different questions, with specific strengths and weaknesses noted in areas such as numerical calculations, theoretical understanding, and application of concepts. The comments highlight the need for improved understanding and application of key accounting and auditing principles among examinees.

Uploaded by

fokox60245
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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EXAMINERS’ COMMENTS ON THE PERFORMANCE OF THE EXAMINEES

PAPER – 4: COST AND MANAGEMENT ACCOUNTING

Specific Comments
Question 1.(a) This numerical question was based Economic Order Quantity
(EOQ), Re-order level and advise whether quantity discount offer could be
accepted. Above Average performance was observed in this question.
(b) This numerical question was based on Joint-Product and By-Product
Costing. Examinees were asked to apportion the joint costs using the Physical
unit method and Contribution method. Examinees were also required to
assess the impact on profitability if Product B is further processed. Overall
performance of the examinees was Average.
(c) It is a numerical question based on Budgetary Control and examinees are
required to calculate the actual hours worked, standard hours for actual
output, activity ratio and standard capacity usage ratio from the information
furnished in the question. The overall performance of the examinees was
Below Average.
Question 2.(a) This numerical question was based on Activity Based Costing.
Examinees were asked to evaluate the profitability of its customers using the
concept of Activity Based Costing. Overall performance of the examinees was
Average.
(b) This numerical question was based on Service Costing. Examinees were
asked to calculate the net operating income per flight for the airlines
company and also to find out whether proposal of reduction in fare should be
implemented by the company. Most of the examinees performed well, hence
the overall performance was Above Average.
Question 3.(a) This numerical question was based on Budgets and Budgetary
Control. Examinees were asked to calculate the profits of the company at
different capacity levels. Most of the examinees performed well and an Above
Average performance was observed.
(b) This numerical question was based on reconciliation of profit as per cost
accounts with the profit as per financial accounts based on the information
SUGGESTED ANSWER
EXAMINERS’ COMMENTS

furnished. Most of the examinees have attempted this question correctly and
overall performance of the examinees was Good.
Question 4.(a) This numerical question was based on Process and Operation
Costing. Where examinees were required to prepare process accounts,
abnormal loss account, abnormal gain account and costing profit and loss
account. Overall performance of the examinees was Below Average.
(b) In this numerical question examinees were asked to calculate the amount
of under absorption of production overheads during the year and show the
treatment of under -absorption of production overheads in cost accounts.
Most of the examinees performed well, hence the overall performance was
Good.
Question 5.(a) This numerical question was based on calculation of profit
lost due to labour turnover. The overall performance of the examinees was
Average.
(b) This was a numerical question related to different aspects of Marginal
Costing. Examinees were required to calculate the Break-even sales and
calculate sales volume required to earn a certain level of profit. Overall
performance of the examinees was Average.
(c) This theoretical question was based on Feedback Control and
Feedforward Control system of budgetary control. Overall performance of the
examinees was Below Average.
Question 6.(a) This was a theoretical question to distinguish between cost
control and cost reduction. Overall performance of the examinees was Below
Average.
(b) In this theoretical question examinees were required to distinguish
between Waste and Scrap and discuss the treatment of normal and abnormal
scrap in Cost Accounts. Overall performance of the examinees was Below
Average.
(c) This theoretical question required examinees to describe Unit Costing and
Batch Costing and give examples of industries for each method where these
are used. Overall performance of the examinees was Below Average.

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SUGGESTED ANSWER
INTERMEDIATE EXAMINATION: MAY 2024

OR
Internal Choice Question
This theoretical question requires the examinees to describe idle time and
explain the treatment of idle time in different situations. Overall performance
of the examinees was Below Average.

PAPER – 5: AUDITING AND ETHICS

Specific Comments
Question 1.(a) Matters to be considered while preparing an Audit
Programme and whether same audit programme can be used for two different
entities: Examinees have written the conclusion of the answer correctly but
could not explain the matters generally considered while preparing an audit
program.
(c) Reporting responsibilities under Companies Act, 2013 for Internal
Financial Control: The examinees failed to understand the requirement of
question and answered in terms of internal control instead of internal
financial controls. Many examinees were not aware about the responsibilities
of Independent Directors and Audit Committee in relation to internal financial
controls.
Question 2.(a) Inquires of Management and Others within the Entity:
Majority of examinees wrote general points regarding types of inquiries from
Marketing personnel and Information system personnel rather than specific
points.
(c) Inherent limitations of audit: Some of the examinees mentioned
inherent limitations of audit in bullet points only without explaining the same.
(d) Significant factors in directing the engagement team’s efforts:
Majority of the examinees could write partial answer by mentioning one or
two factors correctly, while rest of them mentioned general points and not
specific factors relating to the question.
Question 3.(a) Audit Planning: Majority of the examinees have written
general points on audit planning instead of focusing on aspects prior to the
auditor’s identification and assessment of the risks of material misstatement.

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SUGGESTED ANSWER
EXAMINERS’ COMMENTS

(b) Written Representation: Examinees were able to write the concept of


period of written representation to be given by the new management,
however, majority of examinees could not relate to the concept that the date
of management written representation should be before the date of auditor’s
report.
(c) Manual elements vs. automated elements in entity’s internal control:
Majority of examinees could only cover the area of judgement and discretion
where manual elements in internal control are suitable but failed to cover
other specific points.
(d) Using the Internal Audit Function: Instead of focusing on coordination
between the external auditor and the internal audit function, examinees have
discussed on the aspects of evaluation of the work of the internal auditor and
relying on the work of the internal auditor.
Question 4.(a) Factors to select specific items and specific items to be
selected from a population: Most of the examinees wrote about different
methods/types of Sampling (like random sampling, stratified sampling etc.)
instead of writing about factors for selecting specific items and specific items
to be selected for testing from the population.
(b) Audit Procedures to obtain sufficient Audit evidence that the work of
other Auditors is adequate: The examinee concentrated more on evaluation
of the work of other auditor rather than writing about audit procedures
required to obtain sufficient audit evidence that the work of other auditors is
adequate for the principal auditor.
(c) Disclosure requirements as per the Companies Act, 2013: Majority of
the examinees had no idea about the disclosure requirements as per
Companies Act, 2013 with regard to loans given to Promoter, Director, KMP
and the Related Party and mentioned points like whether loans are secured or
not, whether proper interest has been charged etc.
(d) Analytical Procedures: Majority of examinees wrote about different
types of Analytical Procedures such a Reasonableness Test, Structural
Modelling rather than writing specific Analytical Procedures required with
regard to Purchases.

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SUGGESTED ANSWER
INTERMEDIATE EXAMINATION: MAY 2024

Question 5.(b) Examples of costs that are not costs of an item of PPE:
Many examinees mentioned incorrect examples such as depreciation,
borrowing cost etc.
(d) Reporting requirements of a Nidhi Company under CARO 2020:
Examinees have explained the three requirements of the relevant clause but
could not cover the correct parameters of ratio and percentage as prescribed
under CARO 2020 and also failed to cover the point of default of interest and
principal repayment.
Question 6.(a) Responsibilities of engagement partner for engagement
quality control review as per SA 220: Majority of examinees focused on the
qualities of the engagement partner like independence, leadership quality and
competence etc. rather than writing about responsibilities of engagement
partner for engagement quality control review.
Alternative
(a) Corpus Contribution and Revolving Fund (For Non-Governmental
Organisations)
A few examinees could refer corpus contribution as capital contribution and
failed to explain the concept of revolving fund. Most of the examinees
incorrectly related the meaning of terms with utilisation of funds for specific
and general use respectively.
(b) Prudential norms (Asset Classification and Income Recognition) for
loans guaranteed by Government: Some of the examinees could not
distinguish between advances guaranteed by the State government and
Central government. They also failed to mention the concept of invocation of
government guarantee in case of Central Government advances.
(c) Documentation regarding misstatements identified during audit:
Majority of the examinees mentioned about the audit procedures to be
undertaken on identification of the misstatements rather than audit
documentation required for the misstatements.
(d) Finance Lease as per AS 19: Examinees were able to correctly identify
the kind of lease and its taxation benefits. However, the ownership status,
that is, the option to buy the asset at the end of the finance lease term was
not correctly mentioned by few examinees.

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SUGGESTED ANSWER
EXAMINERS’ COMMENTS

PAPER − 6: FINANCIAL MANAGEMENT & STRATEGIC MANAGEMENT


SECTION A – FINANCIAL MANAGEMENT
Specific Comments
Question 1.(a) This was a numerical question on Calculations of ratios. Most
of the examinees could not calculate the gross profit ratio correctly. Hence,
overall performance of the examinees was Below Average.
(b) This was a numerical question on Leverage and Change in EPS under two
different scenarios. Many examinees performed very well in this question. The
performance of the examinees was Good.
(c) This was a numerical question on Management of Receivables - rate of
effective cost of factoring. Most of the examinees could not calculate the
interest savings due to reduction in average collection period and interest
cost on advance from the factor correctly and hence could not arrive at the
final answer. Overall performance was Below Average.
Question 2.(a) This was a numerical question based on calculation of cost of
equity share capital, preference share capital, debentures, retained earnings
and term loan. Most of the examinees could not calculate the share
redemption value required for calculation of cost of debentures correctly.
Overall performance of the examinees was Above Average.
(b) This was a numerical question based on Arbitrage process of Capital
Structure. Overall performance of the examinees was Average.
Question 3.(a) This was a numerical question based on Replacement decision
under Capital Budgeting. Most of the examinees could not calculate the
incremental depreciation correctly and hence failed to arrive at incremental
CFAT. Hence, overall performance of the examinees was Poor.
(b) In this numerical question, examinees were required to calculate the
Intrinsic value of shar using Dividend discount model. Most of the examinees
failed apply correct formula of dividend discount model. Overall performance
of the examinees was Below Average.
Question 4.(a) This was a theoretical question where examinees were
required to state whether the given statements were true or false with
appropriate reasons. Overall performance of the examinees was Good.

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SUGGESTED ANSWER
INTERMEDIATE EXAMINATION: MAY 2024

(b) In this theoretical question, examinees were required to explain some of


the forms of bank credit. Most of the examinees could not explain the
different forms of bank credit properly. Performance of the examinees was
Average.
(c) In this theoretical question, examinees were asked to discuss the
relevance of Payback reciprocal in capital budgeting decisions. Most of the
examinees did not answer properly and hence, the performance of the
examinees was poor.
OR
(c) This was a theoretical question based on the features of crowd funding.
Performance of the examinees was Poor.

SECTION – B: STRATEGIC MANAGEMENT

Specific Comments
Question 5.(a) The performance was above average as many examinees
were able to identify the McKinsey 7S Model correctly and write the elements.
However, they struggled to adequately explain the limitations of the model.
(b) The performance was average, as the examinees correctly identified the
strategic level but were unable to effectively connect the benefits of strategic
management to the given case.
(c) Performance was below average. Examinees were not able to provide
expected answers as they lacked proper knowledge of the concept. The
answers given by them were very vague. Most of the examinees were not able
to explain the benefits of interaction with the business environment.
Question 6.(a) Most of the examinees wrote good answers, demonstrating
sufficient knowledge to effectively support their disagreement with the
statement.
(b) The performance was below average as the examinees couldn’t attempt
this question on correct lines due to lack of conceptual clarity of as how
organizations can effectively manage strategic uncertainties in a rapidly
changing business environment.
Question 7.(a) The performance was good as the examinees were able to
clearly explain the key characteristics of business products.

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SUGGESTED ANSWER
EXAMINERS’ COMMENTS

(b) The performance was average as many examinees were able to explain
the significance of the mission statement but not in a completely satisfactory
manner.
Question 8.(a) The performance was average as many examinees incorrectly
explained channel analysis and provided only brief descriptions of the
different types of channels.
(b) The overall performance of the examinees was below average in the first
option, as many were unable to clearly differentiate between forward and
backward integration. However, in the second option, the strategic group
mapping tool was correctly identified, and the procedure for using the tool
was accurately described, resulting in a good performance.

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