FAR 210 (suggested test answer) all past year test answer PDF

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FAR 210 SUGGESTED ANSWER FOR TEST CHAPTER 1 AN OVERVIEW OF THE FINANCIAL REPORTING IN MALAYSIA.

TEST AUGUST 2015 a) Two Function FRF and MASB (Refer page 5-6 Text book) b) Why is it necessary for MASB and FRF need to be backed by FRA 1997:  Ensure smooth conduct of the function of FRF and MASB  Overseeing body for the conduct of MASB operations and activities  Regulatory support for both FRF and MASB in the conduct of their functions c) Benefit of converging MFRS and IFRS  Global investors have better understanding of financial statement prepared by companies in Malaysia, better comparison between companies.  To enhance national reputation as Malaysian standard are compliance with international accounting standard  Provide greater credibility and transparency and financial statements prepared understood by global investors.  Malaysia multinational companies benefit from reduced compliance costs and reduce translation risk when consolidating.  Help incorporate better practices within corporate in Malaysia

TEST JANUARY 2016 a) Responsibilities of MIA: (page 2)  To regulate the accountancy profession in Malaysia

 Registration of accountants in Malaysia  Monitor international and local accounting trends and development  Consults regularly with the government and regulatory bodies b) Reporting requirements of public listed companies as laid out by Bursa Malaysia: (page 11)  Annual report prepared in accordance with Malaysia Financial Reporting Standard (MFRS) and Ninth Schedule  Auditors and directors report are to be submitted to the Bursa Malaysia 4 month from the year end  The printed annual report shall be issued to shareholders within a period not exceeding 6 month from the year end  For interim reporting, comply with quarterly reporting requirement

c) Private entity:  Not required to prepare or lodge any financial statement under SC or Bank Negara Malaysia  Is not a subsidiary or associates or jointly controlled by, an entity which is required to prepare or lodge any financial statement under SC or BNM d) Private entities shall comply either:  Voluntarily adopt MFRS framework used by public company  By 1 January 2016, makes a mandatory transition to the new MPERs framework

TEST AUGUST 2016 a) Exempt entity – SOP1 -NOT in the syllabus. b) Reporting requirement for a non-incorporated entity:

i.

ii.

iii.

To comply with Approved Accounting Standard in the preparation and presentation of its financial statement (FRA 1997) To submit its financial statement to the Directors general of Inland Revenue for the purpose of determining assessable income under the Income Tax Act Do not have to be audited

TEST FEBRUARY 2017 Suggested answer A) i) All public company whether listed or on listed must apply the Securities Commission guidelines. ii)Main functions of SC are encouragement and promotion of the development of the capital market in Malaysia through regulation and enforcement of all matters relating to securities industry. B) Audit oversight Board (AOB) has the power to conduct inspections and monitor programs on registered auditors to assess the extent of their compliance with recognized auditing and ethical standards. AOB is empowered by SC Act to sanction any registered auditors for failure to comply with any provisions. C) Accounting bodies responsible for issuing standards prior to 1997 – MIA and MICPA D) Functions of Malaysian Accounting Standard Board (MASB) i. To issue new accounting standard ii. To review, revise or adopt existing standards iii. To issue the statements of principles for financial reporting

iv. v. vi. vii.

To sponsor or undertake the development of possible accounting standard To conduct public consultation To develop conceptual framework To perform such other function as the Minister of Finance may prescribe by order published in the Gazette.

TEST NOVEMBER 2017 A) State any statutory regulation on financial account and reporting in Malaysia (REFER Slide Page 18) B) Requirement of Companies Act 2016 with regard to keeping proper accounting and other record:  In such manner as to enable them to be conveniently and properly audited  Within 60 days of the completion of transactions to which they relate  For seven (7) years after the completion of the related transactions or operation  At the registered office, or at such other place as the director think fit. C) Function FRF – Refer page 3 D) Problem related to PERs: i.

PERs were not complete as some MASB Standards and some IFRSs on the financial instruments and related party disclosures were not adopted as PERs

ii.

Many subsequent development in the IFRSs were not incorporated in PERs

TEST APRIL 2018 A) Two private sector professional bodies that regulates the financial accounting and reporting practices in Malaysia before 1997: i) ii)

Malaysia Institute of Certified Public Accountant (MICPA) Malaysia Institute of Accountants (MIA)

B) Function of Financial Reporting Foundation (FRF) i.

ii. iii. iv.

To provide its view to MASB on any matters of which MASB seek to undertake or implemented in relation to MASB’s functions of issuing, reviewing or developed approved accounting standards To review the performance of MASB To be responsible for all financing arrangements for the operation of MASB, including approving the budget of MASB To perform such other functions as the minister of Finance prescribe. (page 3)

C) Requirements of Companies Act 2016 with regards to system of internal control:

Suggested answer The director of public company or subsidiary of a public company shall have in place a system of internal control that provides reasonable assurance that: i. The assets of the company are safeguarded against loss from unauthorized use or disposal and to give a proper account of the assets

ii.

All transactions are properly authorized and the transactions are recorded as necessary to enable preparation of a true and far view of the financial statements

D) FRSs – framework for public entities PERs – framework for private entities.

TEST OCTOBER 2018 A. Two requirement of Companies Act 2016 in relation to financial accounting and reporting Suggested answer i. Every company must keep proper accounting records to enable a true and fair view of the business operation. ii. All accounts must be recorded and kept to enable them to properly audited iii. All accounts must be recorded within 60 days of completion of transactions and be kept for 7 years after the completion of such transactions. iv. Audited accounts must be presented by the directors to the shareholders in the company’s annual general meeting. B. (i)Refer to PowerPoint notes page 18 (ii)Requirement of Income Tax Act 1967: Every person must keep sufficient records to enable income or loss from the business for the basis period for any year assessments to be readily ascertained by Director of General of the Inland Revenue or than authorized officer. C. Roles of accountant in society Suggested answer

1) To prepare the financial statements that show the true and fair view about the business as such assisting the users especially the shareholders in making decision 2) To uphold ethical standards accepted within the accounting profession 3) To assist the company with corporate strategy, provide advice and help business to reduce costs, improve their top line. 4) To exercise professional judgment in performing their roles so that when time get challenging, they do not undertake actions that will result the profession losing the public’s trust as protectors of public interest.

TEST APRIL 2019 Suggested answer A. The regulatory framework Lim & Partners must comply in preparing its financial statement are: 1. Approved accounting Standard 2. Income Tax Act 1967 3. Partnership Act 1961 or Limited Liability Partnership Act 2012 B. (i) Both public and private entities incorporated under Companies are legally enforceable to comply with the provisions of Companies Act 2016 (page 5) (ii) The Act requires that the financial statements of a company or the consolidated financial statements of a holding company must comply with the approved accounting standards issued by the MASB to achieve True and Fair view (iii) Bursa Malaysia Listing Requirements on reporting requirements. (page 11) 1. Issuance of printed annual report to shareholders within 6 months from the company’s financial year end

2. In relation to the above, the audited annual accounts together with the auditor’s & directors’ reports must be submitted to BM for public release within 4 months from the company’s financial year end 3. The audited annual accounts must be in the form of consolidated financial statements 4. The audited annual accounts must be prepared in accordance to the MASB’s accounting standards & requirement of Co Act 2016

TEST NOVEMBER 2019 Q1 i)State TWO (2)types of standard that are recognised as approve accounting standard prior to 1997. Suggested answer International accounting standard (IASs) Malaysian Accounting Standards (MAS) Q1 ii) Name the first local accounting standard issues by MICPA in 1984. Suggested answer Malaysian Accounting Standards (MAS 1) – Earnings per share Q2 B i)Briefly explain any one requirement under directors’ responsibilities in relation to reporting under Section 248 (1) Suggested answer (Refer page 6) 1. The directors shall prepare financial statements within 18 month from the date of its incorporation and subsequently within 6 months of its financial year end. 2. The directors must present the financial statement (SOPL & SOFP) and the Directors’ Report to the shareholders at the company’s annual general meeting.

Q2 B ii) Identify the requirement of the Act when there is conflict between provision in the Companies Act and approved accounting standard. Suggested answer The Act clarifies that if a conflict or inconsistencies arise between provision of approved accounting standard and Act, in respective to application in financial statements, the provision of applicable approved accounting standard shall prevail. Q1 C By 1 January 2016, private entities in Malaysia are required to make a mandatory transition to the new Malaysian Private Entity Reporting Standards (MPERS). Define a private entity. Suggested answer A private entity is a company incorporated under the Companies act that  Is not required to prepare to lodge any financial statements under any law administered by the Securities Commission or the Bank Negara Malaysia; and  Is not a subsidiary or associated of, or jointly controlled y an entity which is required to prepare or lodge any financial statement under any law administrated by the Securities Commission or the Bank Negara Malaysia. Q1 D The Audit Oversight Board (AOB) is established under Pt 111A of Securities Commission Act 1993. This Act require all auditors of public interest entities to be registered . Described the mission of AOB. Suggested answer The AOB’s mission is to assist Securities Commission in overseeing the auditors of public interest entities and to protect the interest of investors by promoting confidence in the quality and reliability of audited financial statements of public interest entities....