Question 1 - Part b

In this lesson

1. 0:00 Question 1B: Evaluating material misstatement risks
2. 0:48 Understanding the requirement and marking approach
3. 2:07 Identifying risks from client exhibits
4. 5:15 Revenue recognition and IFRS 15 compliance
5. 8:01 Warehouse fire and asset impairment issues
6. 10:03 Joint venture accounting treatment concerns
7. 14:17 Selecting and prioritising your top five risks
8. 15:03 Calculating materiality based on profit before tax
9. 18:11 Financial analysis: revenue and asset trends
10. 22:26 Warehouse impairment: IAS 36 application
11. 27:22 Investment in LP: joint venture vs subsidiary
12. 31:35 Revenue recognition: premium pass subscription
13. 35:02 Legal claim provision: IAS 37 requirements
14. 39:02 Structuring your answer for professional marks

About this lesson

This video walks you through identifying material risks, calculating materiality, and structuring your answer to demonstrate both technical knowledge and professional scepticism. You'll discover the key methodology: calculate materiality based on profit before tax, then discuss five well-explained risks of material misstatement, aiming for three marks per risk. The lesson uses a realistic case study to show you how to extract risks from financial data and client information, then apply relevant accounting standards (like IFRS 15, IFRS 36, IFRS 11, and IAS 37) to explain why each risk matters. You'll see how to identify risks across revenue recognition, consolidation treatment, asset impairment, provisions, and contingent liabilities—and critically, how to state which figures are overstated or understated. A vital skill covered here is professional judgement: prioritising risks by materiality and financial impact, spotting management bias or integrity concerns, and maintaining scepticism when information gaps exist. The video shows you exactly how to structure each risk discussion—state the accounting rule, apply it to the scenario, reference another standard if relevant, and add reasoned judgement—so you earn full marks consistently. By the end, you'll understand how to move beyond listing risks to writing the analytical, well-supported answers that examiners reward.

Duration: 42m