APC2024 Case Study 3 - 8CC - IOD & Task List (RSA VERSION) PDF

2024
ENDUNAMOO
APC PROFESSIONAL PROGRAMME
INFORMATION ON THE DAY

Disclaimer: All names of persons, places, and business entities mentioned in this case study
are purely fictitious in nature and any resemblances to real people, living or dead, places or
business entities are purely coincidental.
Note to Namibian candidates ONLY
This case study has been developed in the South African context with the laws, regulations,
and economic context relevant to and applying to South Africa. However, the Namibian
candidates that will be writing the assessment administered by the Institute of Chartered
Accountants of Namibia can use the economic, political, technological, legal, and
sociological contexts of Namibia. The solutions to the tasks with a tax or strategic component
are not adapted to reflect the economic, political, technological, legal and tax regimes of
Namibia.
CASE STUDY 3
SUPPLEMENTARY CASE STUDY
INFORMATION ON THE DAY
Email# Subject Attachments Pages

Email A RE: 8CC Provisions Journal entries – provisions, contingent
3–5
liabilities, and contingent assets
Email B RE: Financial statement Updated annual financial statements and
6–9
review and clean up explanatory notes
Email C Revenue performance Summary of revenue and related accounts 10 – 11
Email D Income tax and
Tax computation 12 – 13
distribution decision
Email E Sale of shareholding Value of shareholding of Amy Jane Jones at
14 – 15
30 September 2024
Email F RE: Africa expansion — 16
Email G RE: People Survey Extract of people survey results 17 – 18
2
© Endunamoo Professional Course | APC Professional Programme 2024 | Information on the day
Email A: Email from Lindsey to Kabelo
From [email protected]
To [email protected]
Cc [email protected]
Date 09 October 2024; 08:06
Subject RE: 8CC Provisions
Attachment Journal entries – provisions, contingent liabilities, and contingent assets
Hi Kabelo
I managed to find some time yesterday to put together some of the journal entries for the
provisions, contingent liabilities and contingent assets processed in our accounting records
during FY2024, including commentary on the work that Melissa and I had done. Before I share
this with Mahlangu & Associates, I would appreciate your critical review of the journals and
commentary in the attachment to this email. I'm finalising the commentary on a few more
journals processed during the year for your review. When reviewing the journals attached, it
would be helpful if you could provide detailed feedback and technical guidance that Melissa
and I can use moving forward.
Kind regards
Lindsey Basson
Partner and Finance Director: 8CC
NOTICE: Please note that this email and the contents thereof are subject to the standard 8 Circles Consulting email disclaimer. See
http://www.8CC.com/disclaimer/email.htm for more details.
3
Attachment: Journal entries – provisions, contingent liabilities and contingent assets
Journal Entry #1
Trial balance account name Account number Record Debit Credit
Legal services costs LSC008 P/L 1 693 254
Provisions for legal services PN0091 SFP 1 693 254
Note: On 1 July 2024, 8CC entered a two-year contract with ENS law firm to provide us with
legal advice regarding our disputes, lawsuits and drafting client contracts. The contract
requires us to pay a deposit of R100 000 and a monthly retainer of R75 000. Melissa calculated
the contract cost as the present value of the future retainer plus the R100 000 deposit and
recognised the total amount as a provision at the inception of the contract.
Journal Entry #2
Contract losses CLS004 SFP 933 750
Provision for onerous contract PN0091 SFP 933 750
Note: 8CC has several retainer contracts to support its clients with negotiations for grants
from the Department of Sports, Arts and Culture (‘DSAC’). The grant negotiations were
impacted by the elections and the appointment of a new cabinet earlier in the year. Following
the elections, the appointed minister of DSAC, Gayton Mackenzie, implemented radical
changes to negotiated contracts whereby he approved lower sponsorship and sports grants.
As a result, 8CC received numerous requests from its clients to reduce monthly retainers
because of lower grants from DSAC.
Given that we are a small team, higher materiality was used to evaluate the impact of
individual client requests to reduce retainers so that the team does not have to review all
contracts with reduced retainers. Based on materiality, a 6-month retainer contract with VSS
Western Cape Rugby Association (‘VSS’) was the only contract that needed to be evaluated.
The VSS contract was for 8CC to support negotiations between VSS and the DSAC for a grant
from DSAC totaling R50 million. The VSS contract was classified as an onerous contract based
on Melissa’s calculations below and the above journal entry was processed to account for the
onerous contract impact.
Currency amounts are in Rands Rates Units Total

Original term 250 000 6 months 1 500 000
Extended term 125 000 4 months 500 000
Success fee 50 000 000 4% 2 000 000
Partners’ fees 2 250 155 hours (348 750)
Senior associates’ fees 1 500 350 hours (525 000)
Associates’ fees 750 400 hours (300 000)
Other costs 376 000 10 months (3 760 000)
Estimated contract profitability (933 750)
4
Notes:
1. The VSS contract was entered into on 1 February 2024 and was initially due to end on 31
July 2024. On 1 July 2024, VSS approved an extension of the contract by four months, with
the contract now expected to end on 30 November 2024, albeit at a reduced fee of
R125 000 per month (i.e. lower fee applied only for the extended period).
2. 8CC is entitled to a 4% of approved DSAC grant success fee payment.
Journal Entry #3
Insurance claim asset CA0572 SFP 2 400 000
Revenue – other income ROI666 P/L 2 400 000
Note: 8CC has an insurance contract with AIX insurance company to indemnify 8CC 80% of
any lawsuit claim successfully lodged against 8CC. Although AIX is a reputable insurer, its
contracts are known to be restrictive, and most of the claims lodged by clients against 8CC
have been rejected by AIX. 8CC may be required to pay R3 million if all its ongoing lawsuits are
ruled in favour of the claimants. Of this R3 million, R950 000 has been recognised as a
provision because R950 000 represents fair value of the lawsuits.
Journal Entry #4
Lawsuit asset CA0572 SFP 187 500
Revenue – other income ROI666 P/L 187 500
Note: 8CC recently lodged a lawsuit against a competitor sports agency regarding the
infringement of 8CC’s trademark. The competitor is called Infinity Creative Counsel (‘ICC’) and
uses ∞CC as its trademark. 8CC alleges that it has lost significant potential client contracts
to ICC due to the confusion caused to the clients secured by ICC, because of the similarity of
the trademarks. 8CC is seeking damages equivalent to R187 500, calculated as pre-tax gross
profit from lost contracts discounted at 8CC’s weighted average cost of capital. A legal expert
advised 8CC that it is highly probable that the court will rule in 8CC’s favour given the pervasive
nature of the evidence made available to the court and therefore advised 8CC to recognise an
asset relating to this.
Legend
P/L – statement of profit or loss; and
SFP – statement of financial position
5
Email B: Email from Lindsey to Kabelo
Subject RE: Financial statement review and clean up
Attachment Updated annual financial statements and explanatory notes
Dear Kabelo
I have reviewed the AFS and identified plenty of opportunities to streamline our reporting as I
outlined last week. I have attached an updated set of AFS that illustrate my proposals, along
with detailed notes explaining the rationale behind each of my proposals. For line items where
I have not referenced a note, I have not made any changes.
All the updates proposed have been applied prospectively for the following reasons:
• IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (IAS 8) does not
require restatements of comparatives if there is a presentation-related prior period error
or change in policy. IAS 8 is concerned only with recognition or measurement matters.
Matters in notes 2, and 3, of the attached updated AFS are purely presentation-related
updates.
• The matters in note 1 of the attached updated AFS meet the definition of a prior period error
under IAS 8 because we should have correctly assessed the contracts when compiling the
prior year's AFS. However, the errors are not material and therefore not within the scope of
IAS 8. We determined quantitative materiality to be R0.8 million based on the principles in
Practice Statement 2. Even though quantitative impact of addressing note 1 exceeds
quantitative materiality threshold, the errors cannot be considered material overall
because the adjustments do not change the profit for the year; and the net asset position
of 8CC is unchanged and consequently, would not impact the decisions of a user of these
AFS.
Let me know your thoughts on applying the proposed updates prospectively? Furthermore,
could you please assist with reviewing the attached updated AFS and all my explanatory notes
for compliance with IFRS? After I address your comments, I intend to send the updated AFS
and explanatory notes to Mahlangu & Associates for their audit. Thanks for the assistance!
Kind regards
Lindsey Basson
NOTICE: Please note that this email and the contents thereof are subject to the standard 8 Circles Consulting email
disclaimer. See http://www.8CC.com/disclaimer/email.htm for more details.
6
Attachment: Updated annual financial statements and explanatory notes
Extract of updated statement of profit or loss of 8CC Inc. for the year ended 30
September 2024
Amounts in R’ million Note 2024 2023
Revenue 66 78 65
Time-based projects 35 36
Retainer and contingency 17 16
Structured solutions 1 10 22 10
Other income 4 3
Cost of revenue 34 46 39
Core team – non-partner project time 19 17
Core team – partner project time 15 14
Subject matter expert project time 1 0 12 8
Gross profit 32 26
*** No more changes made from here in the statement of profit or loss***
1. Structured Solutions – Miss Africa
We reviewed the Satellite TV provider’s Miss Africa Beauty Pageant structured solutions contract
to assess the correctness of revenue recognition and measurement. According to the terms of
the three-year contract, the total consideration payable by Satellite TV provider to 8CC and our
conclusion on the appropriate treatment regarding revenue recognition are as follows:
Performance Consideration Previous assessment Updated

obligation of the transaction assessment of the
price transaction price
Time-based Total of R8 million,
R8 million
general strategy payable in advance in 3 No change
(Refer to Note 1.1)
support equal annual instalments
Retainer income:
R100 000
R100 000 payable No change
(Refer to Note 1.1)
monthly in advance
BET Contingency commission:
broadcasting a success fee of 1% of the
deal commercial value of BET
No change
broadcasting deal Rnil
(Refer to Note 1.2)
payable on successful
completion of the
contract
The total cost plus
Cost of the software Only the 20% margin
20% included in
development services is included in
revenue under
from MDS JV Co. working revenue under
Digital interface “structured solutions”
on the digital interface “structured
and cost included in
plus a 20% margin, solutions”
“subject matter expert
payable monthly (Refer to Note 1.3)
project time”
1.1. This is the amount 8CC expects to receive in accordance with the Satellite TV contract.
7
1.2. The success fee is variable consideration which depends on obtaining a BET broadcast
deal and its value. Throughout the contract term, which concluded during FY2024,
revenue relating to the contingent commission has been fully constrained since there is
a significant risk of a reversal in revenue and the risk continued to exist at 30 September
2024. No revenue relating to the contingent commission has been recognised in FY2024
even though the performance obligation has been satisfied – i.e., 8CC successfully
negotiated and secured the BET broadcasting deal – because the valuation of the BET
broadcast deal is pending sign off by the parties to the contract and requisite exchange
control approvals for the foreign currency settlement are still outstanding. The success
fee will be recognised in FY2025 when management is confident that there will be no
reversal of revenue because cash is expected to be in the bank at that time.
1.3. We have assessed 8CC as being an agent in the relationship between the Satellite TV
provider and MDS JV Co. regarding the performance obligation to deliver a digital
interface. The SMEs are employed by MDS JV Co. and use their intellectual property to
deliver the digital interface development service. Since 8CC does not control MDS JV Co.
in accordance with IFRS 10 Consolidated financial statements but instead only has joint
control in accordance with IFRS 11 Joint arrangements, therefore, 8CC does not control
the SMEs. Therefore, 8CC acts as an agent in the arrangement because 8CC does not
control the service provided by the SMEs prior to delivering them to the Satellite TV
provider. Given the specialized nature of the pageant industry, 8CC retained full
responsibility for defining the software specifications and features, ensuring its
compliance with the Satellite TV provider and BET’s requirements and 8CC has the right
to set the price it charges Satellite TV. Additionally, 8CC has full discretion in terms of
instructing and directing the SMEs to perform work on not only the Satellite TV contract,
but other contracts that require similar services.
Lastly, we identified a clause whereby 8CC agreed to prepay the Satellite TV provider R1.2 million
at the beginning of FY2024 to secure exclusive advertising airtime for 8CC’s own marketing
campaign during the Miss Africa pageant aired during FY2024. 8CC intended to use this time to
promote its strategic consulting services. To avoid grossing up the revenue line, the time-based
projects revenue line was reduced by the R1.2m paid by 8CC to the Satellite TV provider because
the substance of this payment is like a refund.
8
Extract of updated statement of financial position of 8CC Inc. as at 30 September 2024
Amounts in R’ million Note 2024 2023
Assets
Non-current assets 87 77
Property, plant, equipment and intangible assets 2 25 3 4
Intangible assets 2 0 22 12
Right of use assets 10 11
Investment in joint venture 52 50
Current assets 48 51 34
Cash and cash equivalents 26 14
Net trade receivables and other receivables 3 22 15 12
Work-in-progress project accounts 3 0 10 8
Total assets 135 138 111
Equity and liabilities
***no changes to equity and non-current liabilities***
Current liabilities 22 25 14
Trade payables and other payables 3 03 2
***no other changes current liabilities***
2. Property, plant, equipment (PPE), and intangible assets
IAS 16 and IAS 38 are substantially similar accounting standards because PPE and intangible
assets subject a reporting entity such as 8CC to the same asset risks (e.g., the risk of
obsolescence). Therefore, to reduce clutter, these two-line items have been aggregated into a
single line item as permitted by IAS 1 for transactions of a similar nature and function.
3. Net trade receivables
After analysing the transactions reported under “trade and other receivables” and “trade and
other payables”, we identified that these lines fully comprise the financial assets and liabilities
respectively. Therefore, the lines have been renamed “trade receivables” and “trade payables”.
Furthermore, trade receivables, work in progress, and trade payables have been offset since the
strict criteria in IAS 32 are met. 8CC intends to settle trade receivables, trade payables and work
in progress on a net basis, since working capital is managed collectively by 8CC to optimise
liquidity. 8CC achieves this by matching the payment terms in the contracts negotiated with
customers and suppliers. This assists 8CC in minimising cash flow gaps, ensuring that inflows
from customers are timed to cover outflows to suppliers efficiently.
9
Email C: Email from Lindsey to Kabelo
Subject Revenue performance
Attachment Summary of revenue and related accounts
Hi Kabelo
When I checked this morning, we had nine weekly timesheets outstanding from four of the core
team (one timesheet each from a partner, two from senior associates and six timesheets from
an associate). I sent the follow up message to the team to complete their timesheets to enable
the financial year-end close. I have also extracted and attached to this email the summary of
the revenue transactions and the reconciliation of the related accounts. The extract aligns to
the draft AFS and does not take the updates from the clean-up exercise in the previous email.
Please undertake a thorough data analysis (supported by your own number crunching) and
interrogation of the attached revenue and related accounts extract that would be useful for the
partners. Your analysis should outline any concerns and trends that you observe when
applying professional scepticism that Mahlangu & Associates will likely apply in their audit of
our revenue balance. There is no need to take the updates from the AFS clean up exercise into
account for the purpose of this request. Send me the results of your analysis and calculations
as an attachment to the response email for my review before I pass it on to the partners.
Kind regards
Lindsey Basson
10
Attachment: Summary of revenue and related accounts
Amounts in R’000 Note Work-in- Accounts Deferred Revenue

progress receivables income Time- Retainer & Structured Other
accounts based Contingency Solutions income
Opening balance, 01/10/2023 7 830 11 745 3 980
Time-based projects during the year 1 49 296 35 740 13 556
Invoicing time-based projects (47 270) 47 270
New retainers during the year 12 630
Amortisation of retainer projects 2 (9 630) 9 630
Contingency commission projects 8 265 4 265 4 000
SMEs on structured solutions 3 4 500
Cash received from customers (48 000)
Interest income and other income 4 3 950
Allowance account 5 (2 340)
Unknown differences (2 200) (800) 3 000
Closing balance, 30/09/2024 9 856 14 740 6 980 34 940 16 895 22 056 3 950
Notes
1 On average, each of the partners, senior associates, and associates worked a total of 832, 3 120, and 1 976 hours respectively.
2 Amortisation of R3.2 million relates to prior year retainers and the balance is amortisation for new retainers secured during the year.
3 Structured solutions revenue includes a facilitation fee of R450 000 plus margin that was received from our consulting client to pay a
government official to speed up a long-outstanding payment of invoice due to our client by the government for goods delivered.
4 Interests of R245 000 and R163 600 were earned from the cash accounts and long outstanding receivables respectively.
5 The allowance account relates to movement in provision for expected credit loss, net of write-offs calculated using IFRS 9 provision matrix.
11
Email D: Email from Lindsey to Kabelo
Subject Income tax and distribution decision
Attachment Tax computations
Hi Kabelo
Please see attached the income tax computation for the FY2024, and tax payable balance
calculation which were used as a basis to determine the tax balances in the draft annual
financial statements I shared with you on Friday. You will notice that I will be recommending
to the partners that we use dividends as a distribution method of the R26 million retained
income. Could you please review the attachment and provide me with review comments to
address before I share same with the partners?
Kind regards
Lindsey Basson
12
Attachment: Tax computations
Income tax computation for the FY2024 Amounts in R’000

Profit before tax 18 154
Permanent differences 2 314

• JV dividend converted at the average exchange rate 3 124
• Section 10B(3) foreign dividend exemption (R3 124 x 7/27) (810)
Temporary differences (2 548)

• Deferred income / income received in advance 6 980
• Section 24C allowance (R6 980 x GP% of 40%) (2 792)
• Add back depreciation on property, plant, and equipment 975
• Wear-and-tear allowances calculated at cost / 5 years (4 125)
• Add back allowance account for expected credit loss 2 340
• Section 11(j) allowance (R2 340 x 25%) (585)
• Insurance / legal claims are of capital nature (5 341)
Taxable income 17 920

Tax rate 28%
Current tax (taxable income x tax rate) 5 018
Deferred tax (temporary differences x tax rate) (713)
Income tax expense in the income statement 4 305
Tax payable as at 30 September 2024 R’000

Opening balance, 01/10/2023 2 764
Current tax 5 018
First provisional tax payment (2 500)
Penalty and interest on the late first provisional tax payment 259
Closing balance, 30 September 2024 5 541
The partners have decided to distribute the retained income earned in the past 4 333
two years. The key question is whether to distribute this profit as a salary or
dividend to the partners. Based on my calculations below, dividend would be
the most tax advantageous option. Consequently, I have raised a dividend tax
liability of R4 333 000 in the taxation payable account against the provisions
account (refer to the draft financial statements).
Total tax payable, 30 September 2024 9 874
Option 1: salary would be taxed at the maximum marginal tax rate of 41% in 10 660
the individual tax returns for the partners (R26 million x 41%)
Option 2: dividend is taxed at the 20% dividend tax rate (R26 million x 20/120) 4 333
13
Email E: Email from Lindsey to Kabelo
Subject RE: 8CC Shareholder exit
Attachment Value of shareholding of Amy Jane Jones at 30 September 2024
Hi Kabelo
Amy has been in discussions with a few interested individuals and companies to acquire her
stake in the firm, and she is strongly considering selling all her shares in 8CC to Thrive
Consulting (Pty) Ltd (‘TC’). TC is an up-and-coming consulting firm headquartered in Pretoria.
They specialise in offering consulting services mainly within the consumer goods and
manufacturing sectors but are looking to expand into sports and entertainment. The CEO of
TC, Travis Crews, told Amy to name her price and Amy indicated she will get back to him within
a week. Amy asked me to calculate the value of her shareholding in 8CC as at 30 September
2024.
I have attached my attempt at the draft valuation, together with my explanatory notes to this
email. Please could you critically review the draft valuation and provide me with your review
comments to address, before I share the final valuation with Amy? In addition, could you also
provide me with four key strategic, risk or other qualitative factors that Amy should consider
before deciding whether to sell her interest to TC? Amy will be so thankful to us for helping her
make this big decision.
Kind regards
Lindsey Basson
14
Attachment: Value of shareholding of Amy Jane Jones at 30 September 2024
Amounts in R’ millions Notes Year 0 Year 1 1st year of

perpetuity
2024 2025 2026
EBIT 1 23,40 24,92
Add Share of JV Profit 1 6,50 6,92
Equals cash operating profit before tax 29,90 31,84
Tax on operating profit (8,37) (8,92)
Equals cash operating profit after tax 21,53 22,92
Terminal value 2 258,30
Total cash flow from operations 21,53 281,22
Value of Amy Jane Jones Equity 3 261,10
Notes
1 In calculating the growth in EBIT and the Share of JV Profit, I have assumed a growth
of 30% for 2025. The major reason for the growth projected for 2025 is due to ongoing
discussions with a few new customers. The fruits of these discussions are expected
to start being realised in 2025 and will be based on the new royalty arrangement billing
model. I have also estimated inflationary growth of 6.5% from 2026 onwards.
2 Terminal value was calculated as follows: (22,92) (1 + 6.5%) / (15.95% (a) – 6.5%) =
258,42
Where:
a) Represents the weighted average cost of capital of 8CC calculated as follows:

[80% (b) * 17% (c)] + [20% (b) * 11.75% (d)] = 15.95%
b) Represents the target debt-to-equity ratio of 8CC (Pty) Ltd of 20%
c) Equals the cost of equity (Ke) of 8CC calculated as follows:

8.6% (e) + [1.2 (f) * 7% (g)]
d) Represents the current prime borrowing rate.
e) This represents the current yield of R2030 government bond.
f) Represents the levered equity beta of Accenture Plc.
g) Represents the current equity market risk premium for JSE listed shares.
3 This was calculated as follows: [21,53 * 1/1.15951] + [281,22 * 1/1.15951]
15
Email F: Email from Daniel to Kabelo
Subject RE: Africa expansion
Hi Kabelo
I have an update for you on my email I sent you last week regarding the firm’s plans to expand
into Africa. The partners have since requested that we start with a checklist that we could use
to identify which African countries would be suitable for pursuing consulting projects. They
would like a checklist of say, eight key factors that the firm should consider in evaluating
whether a country is viable for 8CC to pursue consulting projects within its borders or not.
Please draft a checklist for my review. List the key factors that should be considered when
evaluating countries with a brief explanation of why each factor is relevant to our expansion
decision. Ultimately, we will be required to list the attributes of individual consulting project
opportunities that should be important. But for now, let’s focus on a country level.
Thanks in advance. I am looking forward to your input.
Kind regards
Daniel Makhathini
Managing Partner: 8CC
16
Email G: Email from Daniel to Kabelo
Subject RE: People Survey
Attachment Extract of people survey results
Hi Kabelo
Please see the attached extract of the people survey results following the closure of the survey
on Monday, 30 September 2024. All thanks to Amy for this initiative because she designed the
questionnaire containing the 90 questions and administered the survey from beginning to end.
The questionnaire should take about forty-five minutes to complete. Amy used Microsoft Excel
to collate the individual responses and to provide a report summarising the results of everyone
who completed the survey. She sent me the attached extract from the people survey results
for four of the questions which had the lowest scores, on which we could focus our analysis,
interpretation and response plan.
Please prepare a brief memo for my review with your initial analysis and interpretation of the
people survey results, and a response plan that we can share with the partners. Please attach
the memo to your email response. In your email response, please outline the areas of
improvement to our people survey or to the process we followed which we can implement in
the survey or the process of survey for the next year. I am of the view that we should aim to
undertake the people survey each year – perhaps next year we will have improved results which
we can even share beyond the partners.
Kind regards
Daniel Makhathini
Managing Partner: 8CC
17
Attachment: Extract of people survey results
Respondent statistics
Staff
A total of Partners
13 people 31%
survey
responses Associates
54%
were
received.
Senior associates
15%
Partners Senior associates Associates
Feedback response scale

The 8CC people survey uses a three-point scale (i.e., strongly agree is rated 3, agree is rated 2,
and disagree is rated 1). It asks respondents to answer questions and calculates averages by
dividing the sum of the scores by the number of respondents.
Lowest scores
This section features the three lowest rated behaviors, as perceived by employees that
participated in the survey. This gives you an indication of your firm’s potential development
areas. The score column shows the average rating across all your valuators.
Rank Scoring category Behaviours / Questions Average

1 Performance 8CC shows care and concern for its people and my 1.46
performance is evaluated fairly.
2 Wellbeing My workload allows me the time to deliver work of an 2.15
appropriate quality.
3 Reward and I believe my total compensation (base pay and bonus) 2.69
recognition is fair for the work I do.
Open comments
o Senior associates and partners need to engage more with the lower ranks and demonstrate
that they care about their wellbeing.
o Some partners have clear favourites, and these individuals are treated much better than
us. They also always seem to work on the big projects, which is unfair.
o Though annual cash bonuses are great in years where 8CC makes super profits, better
salaries or tokens of appreciation will go a long way in managing our monthly cash flow.
o Respect is key. Anger does not solve problems. People fear consulting seniors because
they will shout at you. I ended up not coming to work because of depression.
18
ENDUNAMOO APC PROFESSIONAL PROGRAMME
CASE STUDY #3: SUPPLEMENTARY CASE STUDY
TASKS
You are Kabelo, a newly qualified Chartered Accountant having passed the Assessment of
Professional Competence and having completed your training contract.
A. Respond to Lindsey’s request in Email A with your review comments on the journals.
Respond to Lindsey’s request in Email B with your thoughts on applying the proposes
B.
updates prospectively and review comments on the updated AFS.
Respond to Lindsey’s request in Email C with your attached analysis, concerns, trends
C.
and calculations of revenue and related accounts.
Respond to Lindsey’s request in Email D with your review comments on the tax
D.
computations (i.e., income tax and tax payable computations).
Respond to Lindsey’s request in Email E with your review comments on the draft
E.
valuation of 8CC and four key strategic, risk or other qualitative factors to consider.
Respond to Daniel’s request in Email F with your checklist containing key factors and
F.
brief reasons to be considered when evaluating countries.
Respond to Daniel’s request in Email G with improvement areas of the survey and
G. process followed and a memo containing initial analysis and interpretation of the people
survey results and a response plan.
Note to Namibian candidates ONLY: Task D can be left as a no attempt – if you do attempt the task,
it would be assessed using the South African marking grid and relevant tax legislation.
1
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2024

INFORMATION ON THE DAY

Email# Subject Attachments Pages

Currency amounts are in Rands Rates Units Total

1. Structured Solutions – Miss Africa

Performance Consideration Previous assessment Updated

2. Property, plant, equipment (PPE), and intangible assets

3. Net trade receivables

Amounts in R’000 Note Work-in- Accounts Deferred Revenue

Income tax computation for the FY2024 Amounts in R’000

Permanent differences 2 314

Temporary differences (2 548)

Taxable income 17 920

Tax payable as at 30 September 2024 R’000

Amounts in R’ millions Notes Year 0 Year 1 1st year of

Value of Amy Jane Jones Equity 3 261,10

a) Represents the weighted average cost of capital of 8CC calculated as follows:

b) Represents the target debt-to-equity ratio of 8CC (Pty) Ltd of 20%

c) Equals the cost of equity (Ke) of 8CC calculated as follows:

d) Represents the current prime borrowing rate.

e) This represents the current yield of R2030 government bond.

f) Represents the levered equity beta of Accenture Plc.

Thanks in advance. I am looking forward to your input.

Feedback response scale

Rank Scoring category Behaviours / Questions Average

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