The future of audit reports?

KPMG Rolls Royce - beyond true and fair. The future of audit reports or should auditors stick to the knitting? http://t.co/5YQIXSGk7X
— peter i brealey (@KhartoumFCA) September 29, 2014

Background paper on restoring trust 

MODEL IFRS ACCOUNTS

President Kiir addresses UNGA

Full text

"Our oil flows through the Sudan. In the spirit of cooperation, my Minister of Foreign Affairs and International Cooperation will soon commence more joint visits with his Sudanese counterpart to donor countries, to appeal and lobby for lifting and waiving Sudan’s foreign debt, as it was agreed in the Cooperation Agreements." 

Near 60 years of audit tax and advisory service

The Abdel Latif El Tayeb team at play 1980

Auditors, the audit plan, the audit programme and internal control

The audit plan helps obtain sufficient appropriate evidence for the circumstances, keep audit costs down, helps avoid misunderstandings.  The audit plan requires knowledge of client's business, development of audit strategies (who, when and how), preparation of the audit programme of testing of controls and transactions.  

Getting it wrong - Companies can exhibit 5% stock price decline following announcement of accounts restatement; decline 20% if due to fraud.  Trust but verify - Shareholders expect an objective third party to provide assurance that the information is accurate not to identify fraud.  

In practice Audit committee effectiveness likely depends not only on qualification but engagement. Objective is to improve earnings quality.  Auditors identify items that could be materially misstated, design and execute tests to determine whether such misstatements have occurred.  

Auditors generally test assertions accuracy in three areas — transactions and events, account balances, presentation and disclosure.  Auditors identify items that could be materially misstated, design and execute tests to determine whether such misstatements have occurred.  

Auditors judge their work scope and findings against materiality of uncorrected errors which make statements of income and assets inaccurate.  

Audit materiality is not just a number crunch of assets and income. Failure to understand the many qualitative factors can cause restatement.  

When audit risk is high, auditors carry out more extensive testing, less reliance on the work of others and less testing of controls. So besides regulatory requirements investment in and maintenance of internal control materially impacts the quality of financial statements

1. ISA300 https://www.frc.org.uk/Our-Work/Publications/APB/ISA-300-Planning-an-audit-of-financial-statements.pdf

Chartered Institute of Internal Auditors

Become an audit leader. Unlock your potential with the new Qualification in Internal Audit Leadership. http://t.co/4fFVcDIZgb
— TheIIA (@TheIIA) September 27, 2014

Oman 
Arabic materials

Fair value - Calculating terminal value in Stock Market Two Stage DCF valuation

Calculate the Terminal Value 
Having estimated the free cashflow produced over the 5 year forecast period, we need to come up with a reasonable idea of the value of the company's cash flows after that period. To help us do this we use, for students of Sudanese history, the easily remembered "Gordon" growth model.

Gordon Growth Model There are several ways to estimate a terminal value of cash flows, but one well-worn method is to value the company as a perpetuity. The model uses this formula:

Terminal Value = Final Projected Year Cash Flow X (1+Long-Term Cash Flow Growth Rate) (Discount Rate – Long-Term Cash Flow Growth Rate)

Reference
1  http://www.investopedia.com/university/dcf/dcf4.asp
2 Why use the Morningstar Ibbotson method http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/39443?OpenDocument
3 Morningstar Equity Research http://www.morningstar.co.uk/uk/research/equities

Rwandan peacekeepers construct school in Juba

#Rwanda Peacekeepers In South #Sudan Construct School In Juba http://t.co/em7NDggzHW

— ProgressRwanda (@ProgressRwanda) September 24, 2014

Students - internal control

Internal audit around the world
SOX The 2013 Framework
Compliance efficiency review

 Basic concept video

Internal Control and Internal Audit with MindsetLearn https://t.co/9xi9kvUsbY Notes http://t.co/k36lc4mAgW
— peter i brealey (@KhartoumFCA) September 24, 2014

What is SOX compliance? https://t.co/TvD6OzN3Ka After Enron et al SOX background https://t.co/aTUKsp2cE3 discussion https://t.co/PrpDclskby
— peter i brealey (@KhartoumFCA) September 24, 2014

Students - commercial bank valuation, the dividend discount model

Basic concept video 

I like this basic concept video. The presenter manages to capture the key concepts underlying a 100 page report in 20 minutes giving a sound and sensible basis for communicating the valuation reports findings and conclusion to others.

Equity Analysts notes for leading commercial banks
Here are 4 equity analysts thoughts on 4 leading commercial banks

More advanced
A report from McKinsey
Basel Accords http://www.bis.org/

What is Inclusive Finance?

UN Photo/Mark Garten

Secretary-General Ban Ki-moon (right) meets with Queen Maxima of the Netherlands, his Special Advocate for Inclusive Finance for Development.

 http://www.unpri.org/areas-of-work/piif/
 …
Microfinance Initiatives http://www.unpri.org/viewer/?file=wp-content/uploads/2012-11Reponsibleinvestmentinitiativesaccompanyingbriefing.pdf

Iran First PM PM talks since 1979

Very interesting: for the first time since 1979 (iran's revolution), #iran's president and #UK's PM will meet each other this Wednesday.
— Farshad Kashani (@FarKashani) September 22, 2014

Why David Cameron's meeting with the Iranian president is so significant http://t.co/FyFJqiu4In pic.twitter.com/3qfpbvxnc8

— i100 (@thei100) September 24, 2014

Using the Cloud to control audit assignments and work of fieldwork teams

Adjusting to sharing oil revenues

#sudan Real GDP 2.7% 2014 4.6% 2015 Consumer Price inflation expected to fall to 14.3% as Sudan adjusts to sharing South Sudan oil revenues
— peter brealey (@KhartoumFCA) September 21, 2014

Source World Economic Outlook 

Mining and IFRS

Mining employs hundreds of thousands of people in Africa.  It is estimated that 500,000 are employed in the mining sector in Sudan alone.

As countries adopt a single set of high quality, global accounting and financial reporting standards there should be greater global consistency and transparency. However, it is recognized that extractive activities is an area in which there is little IFRS guidance.

KPMG
Deloitte
PwC

Statement of Cash Flows

Video
Introduction
Summary of IAS7

IFRS21

IFRS Foundation free registration to view standards and login area

The accounting standard IAS 21 sets out how reporting entities should include foreign currency transactions and foreign operations in their financial statements. 
ICAEW link

Recommended Video
Summary of IAS21
IAS21

Mining in Kenya

A recommended note on mining in Kenya from Mayer Brown

Auditing standards - links

• 
• http://www.ifac.org/

Scientific programme for World Congress of Accountants November 10-13 2014 Rome

• The Audit Directive of 17 May 2006 enforces the use of the International Standards on Auditing for all Statutory audit to be performed in the European Union.
• ICAEW
• IAS changes

The Audit Directive of 17 May 2006 is important in order to ensure a high quality for all statutory audits required by Community law requiring all statutory audits be carried out on the basis of all international auditing standards.

• The final set of clarified standards comprise 36 International Standards on Auditing (ISAs) and International Standard on Quality Control (ISQC) 1, including:
  • One new standard, addressing communication of deficiencies in internal control;
  • 16 ISAs containing new and revised requirements (these have been referred to as "revised and redrafted ISAs"); and
  • 20 ISAs that have been redrafted to apply the new conventions and reflect matters of general clarity only (these have been referred to as "redrafted ISAs and redrafted ISQC 1").
  
  

  Structure of the ISAs

  The ISAs now have a new structure, in which information is presented in separate sections: Introduction, Objective, Definitions, Requirements, and Application and Other Explanatory Material. 
  Introduction
  Introductory material may include information regarding the purpose, scope, and subject matter of the ISA, in addition to the responsibilities of the auditors and others in the context in which the ISA is set.
  Objective Each ISA now contains a clear statement of the objective of the auditor in the audit area addressed by that ISA.
  DefinitionsFor greater understanding of the ISAs, applicable terms have been defined in each ISA.
  RequirementsEach objective is supported by clearly stated requirements. Requirements are always expressed by the phrase "the auditor shall."
  Application and Other Explanatory Material
  The application and other explanatory material explains more precisely what a requirement means or is intended to cover, or includes examples of procedures that may be appropriate under given circumstances.
  
  

  ISAs and ISQC 1

  A complete list of the individual standards that comprise the clarified ISAs, as well as ISQC 1, is below. These standards are available to view and/or download under Publications & Resources.
  The Basis for Conclusions for each ISA and ISQC 1 can be found under Publications & Resources. These staff-prepared documents provide background information, main comments received on the exposure drafts, and the IAASB's conclusions regarding these comments in developing the final standard.
  In finalizing the 2012 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements (the handbook), editorial and formatting changes were made to some ISAs from the 2010 handbook. Abridging document has been prepared which provides an overview of these changes.
  • ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing 
  • ISA 210, Agreeing the Terms of Audit Engagements 
  • ISA 220, Quality Control for an Audit of Financial Statements
  • ISA 230, Audit Documentation 
  • ISA 240, The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements 
  • ISA 250, Consideration of Laws and Regulations in an Audit of Financial Statements 
  • ISA 260, Communication with Those Charged with Governance 
  • ISA 265, Communicating Deficiencies in Internal Control to Those Charged with Governance and Management
  • ISA 300, Planning an Audit of Financial Statements 
  • ISA 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment
  • ISA 320, Materiality in Planning and Performing an Audit 
  • ISA 330, The Auditor's Responses to Assessed Risks 
  • ISA 402, Audit Considerations Relating to an Entity Using a Service Organization 
  • ISA 450, Evaluation of Misstatements Identified during the Audit 
  • ISA 500, Audit Evidence 
  • ISA 501, Audit Evidence-Specific Considerations for Selected Items 
  • ISA 505, External Confirmations 
  • ISA 510, Initial Audit Engagements-Opening Balances 
  • ISA 520, Analytical Procedures 
  • ISA 530, Audit Sampling 
  • ISA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures 
  • ISA 550, Related Parties 
  • ISA 560, Subsequent Events 
  • ISA 570, Going Concern
  • ISA 580, Written Representations 
  • ISA 600, Special Considerations-Audits of Group Financial Statements (Including the Work of Component Auditors)  
  • ISA 610, Using the Work of Internal Auditors 
  • ISA 620, Using the Work of an Auditor's Expert
  • ISA 700, Forming an Opinion and Reporting on Financial Statements 
  • ISA 705, Modifications to the Opinion in the Independent Auditor's Report
  • ISA 706, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report 
  • ISA 710, Comparative Information-Corresponding Figures and Comparative Financial Statements 
  • ISA 720, The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements
  • ISA 800, Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks 
  • ISA 805, Special Considerations-Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement 
  • ISA 810, Engagements to Report on Summary Financial Statements 
  • International Standard on Quality Control (ISQC) 1, Quality Controls for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements

Can you help inspire the next generation of ICAEW Chartered Accountants? http://t.co/Y6xtnydG1k
— ICAEW (@ICAEW) September 16, 2014

Global tax reform

Pessimism over global tax reform success according to @GrantThorntonUK report: http://t.co/iRBccARCHy
— ICAEW (@ICAEW) September 15, 2014

Gum Arabic from Sudan

Gum arabic is an important naturally derived export commodity from Sudan used as an edible glue and binder.  Also puts the fizz in soft drinks.  Some 60,000 tonnes a year are produced.

Approximately one-third of the total area of Sudan is suitable for agricultural development and heavier rainfall in the south permits both agriculture and herding by nomadic tribes.
Agriculture in the Sudan
http://en.wikipedia.org/wiki/Agriculture_in_Sudan

History of the Sudan and its public finances - Abd Al Rahman Al Mahdi

Abd Al Rahman Al Mahdi

There are many modern stereotypes about Sudan.  However a sound basis for understanding modern Sudan is a study of Sudan's long history upto independance over 50 years ago.
Durham University holds a remarkable collection of historical material
https://www.dur.ac.uk/library/asc/sudan/

A typically independant line from the Sudan Tribune
http://www.sudantribune.com/spip.php?article52254

Why choose ACCA

Many international students train with the ACCA.  Why choose ACCA?

Why choose KPMG

KPMG International  Why choose KPMG