Myanmar CPA Part II (MAC)

Under IFRS 10 (Consolidated Financial Statements), an investor controls an investee if and only if the investor possesses which three cumulative elements of control?

• AOwnership of more than 50% of the voting shares, physical possession of share certificate…
• BPower over the investee, exposure or rights to variable returns from its involvement with…
• CVeto power over annual budget expenditures, joint liability for bank borrowings, and shar…
• DRegistration as a holding company with DICA, holding common directorships, and unified ta…

On 1 January 2025, Parent Corp acquires 80% of the equity shares of Subsidiary Ltd for a cash consideration of 120,000,000 MMK. On that date, the fair value of Subsidiary's identifiable net assets is 100,000,000 MMK. The group policy is to measure non-controlling interest (NCI) at its proportionate share of the acquiree's identifiable net assets. Under IFRS 3 (Business Combinations), what is the amount of Goodwill recognized on acquisition?

• A40,000,000 MMK
• B20,000,000 MMK
• C24,000,000 MMK
• D16,000,000 MMK

On 1 January 2025, Alpha Co acquires 100% of the voting shares of Beta Co for a cash payment of 75,000,000 MMK. On that date, Beta Co's identifiable assets have a fair value of 110,000,000 MMK and its recognized liabilities have a fair value of 20,000,000 MMK (net identifiable assets = 90,000,000 MMK). After reassessing the identification and measurement of all acquired assets and liabilities, the net asset value of 90,000,000 MMK is confirmed. Under IFRS 3, how should the resulting difference of 15,000,000 MMK be accounted for?

• ARecognized immediately as a 'Bargain Purchase Gain' (negative goodwill) in profit or loss…
• BCredited directly to equity as a capital reserve in other comprehensive income
• CRecognized as deferred income on the balance sheet and amortized over 5 years
• DDeducted proportionally from the fair values of the acquired non-current assets

Under IAS 28 (Investments in Associates and Joint Ventures), an investor is presumed to exercise 'Significant Influence' over an investee when it directly or indirectly holds what percentage of the voting power?

• AAt least 5% of voting rights
• B20% or more of the voting power of the investee, unless it can be clearly demonstrated th…
• CMore than 50% of the voting power
• D100% of the voting power through a statutory trust

A parent company sold inventory to its 75%-owned subsidiary during the year for 20,000,000 MMK at a profit markup of 25% on cost. At the year-end reporting date of 31 December 2025, 40% of this inventory remains unsold in the subsidiary's warehouse. In preparing the consolidated financial statements under IFRS 10, what is the required consolidation elimination adjustment for unrealized intragroup profit?

• ADebit Consolidated Cost of Sales 1,600,000 MMK and Credit Consolidated Inventory 1,600,00…
• BDebit Consolidated Retained Earnings 2,000,000 MMK and Credit Consolidated Inventory 2,00…
• CDebit Consolidated Sales 20,000,000 MMK and Credit Cost of Sales 20,000,000 MMK with zero…
• DDebit Consolidated Inventory 1,600,000 MMK and Credit Non-Controlling Interest 1,600,000…

Under IFRS 9 (Financial Instruments), what are the two statutory tests that a debt instrument must satisfy to be measured subsequently at 'Amortized Cost'?

• AThe Fair Value Test and the Legal Title Test
• BThe Business Model Test (held to collect contractual cash flows) and the Contractual Cash…
• CThe Active Market Test and the Management Intent Test
• DThe Credit Rating Test and the Central Bank Approval Test

An entity tests a Cash-Generating Unit (CGU) for impairment under IAS 36. The carrying amounts are: Goodwill = 20,000,000 MMK; Building = 60,000,000 MMK; Plant & Equipment = 40,000,000 MMK (Total carrying amount = 120,000,000 MMK). The recoverable amount of the CGU is determined to be 90,000,000 MMK. None of the individual assets has a fair value less costs of disposal that can be determined. How should the total impairment loss of 30,000,000 MMK be allocated across the assets of the CGU?

• AGoodwill: 20,000,000 MMK; Building: 6,000,000 MMK; Plant & Equipment: 4,000,000 MMK
• BGoodwill: 5,000,000 MMK; Building: 15,000,000 MMK; Plant & Equipment: 10,000,000 MMK
• CGoodwill: 0 MMK; Building: 18,000,000 MMK; Plant & Equipment: 12,000,000 MMK
• DGoodwill: 10,000,000 MMK; Building: 10,000,000 MMK; Plant & Equipment: 10,000,000 MMK

Under IAS 19 (Employee Benefits), how are 'Remeasurements of the Net Defined Benefit Liability (Asset)' (such as actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions) accounted for?

• ARecognized in profit or loss on a systematic basis over the expected remaining working li…
• BRecognized immediately in other comprehensive income (OCI) and never reclassified (recycl…
• CDeferred on the statement of financial position and amortized against future pension cont…
• DExpensed in profit or loss only upon final liquidation of the pension fund

On 1 January 2025, an enterprise grants 100 share options to each of its 200 employees, conditional upon the employees remaining in service for 3 years (vesting date 31 December 2027). The fair value of each option at the grant date is 3,000 MMK. At 31 December 2025, the company estimates that 10% of employees will leave during the 3-year period. During 2025, 6 employees actually left. Under IFRS 2 (Share-based Payment), what is the compensation expense to be recognized in profit or loss for the year ended 31 December 2025?

• A18,000,000 MMK
• B20,000,000 MMK
• C60,000,000 MMK
• D19,400,000 MMK

Under IAS 21 (The Effects of Changes in Foreign Exchange Rates), how must an entity translate the financial statements of a foreign operation into its presentation currency when consolidating?

• AAssets and liabilities at historical exchange rates; income and expenses at closing rate;…
• BAssets and liabilities at the closing rate at the reporting date; income and expenses at…
• CAll balance sheet and income statement items at the opening exchange rate of the financia…
• DMonetary items at current rate and non-monetary items at fair value, with all translation…

At 31 December 2025, an enterprise owns plant and equipment with an accounting carrying amount of 80,000,000 MMK. The tax base of the equipment under the Myanmar Internal Revenue Department rules (tax written down value) is 50,000,000 MMK. The applicable corporate income tax rate is 22%. There are no other temporary differences. Under IAS 12 (Income Taxes), what deferred tax liability or asset must be recognized?

• ADeferred Tax Liability of 6,600,000 MMK
• BDeferred Tax Asset of 6,600,000 MMK
• CDeferred Tax Liability of 17,600,000 MMK
• DNo deferred tax is recognized because differences in depreciation rates are permanent

Under IFRS 8 (Operating Segments), an entity must report financial and descriptive information about an operating segment if its reported revenue (including both sales to external customers and intersegment sales) exceeds what quantitative threshold of the combined revenue of all operating segments?

• AAt least 5%
• BAt least 10%
• CAt least 20%
• DAt least 25%

A public company had 10,000,000 ordinary shares in issue at 1 January 2025. On 1 July 2025, it issued 2,000,000 additional ordinary shares for cash at full market price. For the year ended 31 December 2025, net profit attributable to ordinary equity holders was 44,000,000 MMK. Under IAS 33 (Earnings Per Share), what is the Basic Earnings Per Share (EPS)?

• A4.00 MMK per share
• B4.40 MMK per share
• C3.67 MMK per share
• D4.80 MMK per share

Under IFRS 11 (Joint Arrangements), what is the key legal and operational distinction between a 'Joint Operation' and a 'Joint Venture'?

• AA joint operation is incorporated as a public company, while a joint venture is an inform…
• BIn a joint operation, the parties have rights to the assets and obligations for the liabi…
• CA joint operation is accounted for using the equity method, whereas a joint venture is ac…
• DA joint operation requires unanimous approval from DICA, whereas a joint venture requires…

An entity can sell the same financial asset in two accessible markets. Market A has the greatest volume and level of activity for the asset. Market B would produce slightly higher net proceeds after transaction costs. Under IFRS 13, which market normally determines the fair value measurement?

• AMarket B, because the market with the highest net proceeds must always be used
• BWhichever market management selects after the reporting date
• CMarket A, because the principal market takes priority over a more advantageous market whe…
• DAn average of the quoted prices in Markets A and B

Under IAS 24 (Related Party Disclosures), which of the following is explicitly NOT considered a related party of the reporting entity simply by virtue of their normal commercial relationship?

• AA director of the parent company and their close family members
• BA key management personnel member who participates in major financial policy decisions
• CA single commercial customer who accounts for 40% of the entity's total annual sales volu…
• DAn entity that controls or is controlled by the reporting entity

An entity possesses a convertible bond with a face value of 50,000,000 MMK that carries a contractual coupon interest rate of 4% per year payable annually, redeemable in 3 years. The prevailing market interest rate for an equivalent non-convertible debt instrument without conversion rights is 8%. The present value factor of an ordinary annuity at 8% for 3 years is 2.5771, and the present value of 1 MMK at 8% at the end of year 3 is 0.7938. Under IAS 32 (Financial Instruments: Presentation), what is the initial carrying amount of the Liability component at issuance?

• A44,844,200 MMK
• B50,000,000 MMK
• C5,155,800 MMK
• D39,690,000 MMK

Under ISA 600 (Special Considerations — Audits of Group Financial Statements Including the Work of Component Auditors), who bears ultimate legal and professional responsibility for the group audit opinion expressed on consolidated financial statements?

• AThe component auditors who audited the largest operating subsidiaries
• BThe group engagement partner and the group audit firm, without any reduction in responsib…
• CThe Board of Directors of the holding company
• DThe Directorate of Investment and Company Administration (DICA)

Under ISA 701 (Communicating Key Audit Matters in the Independent Auditor's Report), what is the definition of 'Key Audit Matters' (KAMs)?

• AAll minor clerical adjustments that management agreed to correct during the interim audit
• BThose matters that, in the auditor's professional judgment, were of most significance in…
• CConfidential commercial trade secrets that the client requested the auditor to conceal fr…
• DA comprehensive list of all fraud allegations investigated by the internal audit departme…

Under ISA 706 (Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report), which of the following is a strict condition for including an 'Emphasis of Matter' paragraph?

• AThe matter must NOT have been adequately presented or disclosed in the financial statemen…
• BThe matter must be fundamental to users' understanding of the financial statements, appro…
• CThe auditor must use the paragraph to issue a qualified opinion regarding an accounting e…
• DThe paragraph must be used exclusively to report non-compliance with commercial tax filin…

Under International Standard on Quality Management (ISQM) 1, which replaces ISQC 1, how must audit firms structure their system of quality management?

• ABy relying solely on retrospective peer reviews conducted once every 10 years
• BBy adopting a proactive, risk-based approach that includes establishing quality objective…
• CBy delegating quality control entirely to junior audit assistants at the client site
• DBy outsourcing all audit engagement quality reviews to foreign software vendors

Under ISA 250 (Consideration of Laws and Regulations in an Audit of Financial Statements) and the IESBA NOCLAR (Non-Compliance with Laws and Regulations) standard, what is the auditor's professional responsibility when discovering deliberate illegal tax evasion by executive management?

• AMaintain absolute client confidentiality under all circumstances and conceal the crime fr…
• BObtain an understanding of the act, evaluate the financial statement implications, discus…
• CDemand a confidential bonus from the client in exchange for non-disclosure
• DImmediately destroy all audit working papers referencing the transaction

Under ISA 540 (Auditing Accounting Estimates and Related Disclosures), what are the three main approaches an auditor can take to obtain sufficient appropriate audit evidence regarding accounting estimates involving high estimation uncertainty?

• ATesting how management made the estimate; developing an independent point estimate or ran…
• BAccepting management's point estimate; guessing market prices; and recalculating arithmet…
• CInterviewing low-level office clerks; verifying cash register tapes; and inspecting utili…
• DSubmitting the estimate to local municipal courts for binding legal arbitration

In information technology (IT) auditing, what is the essential difference between 'General IT Controls' (GITCs) and 'IT Application Controls'?

• AGITCs apply only to laptop computers, while application controls apply only to mainframe…
• BGITCs are overarching policies and procedures that apply to all or many IT systems (acces…
• CGITCs are tested by internal auditors, while application controls cannot be audited
• DGITCs prevent physical theft of office furniture, while application controls manage corpo…

In forensic auditing and fraud risk assessment, what three conditions comprise the 'Fraud Triangle' model (developed by Donald Cressey) that are typically present when occupational fraud occurs?

• AIgnorance, Carelessness, and Stupidity
• BPressure (Incentive), Opportunity, and Rationalization (Attitude)
• CGreed, Wealth, and Authority
• DDebit, Credit, and Balance

Under ISA 720 (The Auditor's Responsibilities Relating to Other Information), what is the auditor's professional duty regarding the Director's Report, Chairman's Statement, and corporate governance disclosures included within an entity's Annual Report?

• ATo perform a full independent substantive audit on every figure in the narrative report a…
• BTo read the other information, consider whether there is a material inconsistency between…
• CTo completely ignore all narrative sections of the annual report as they lie outside the…
• DTo re-write the Director's Report to ensure it matches the marketing objectives of the co…

An auditor has identified a significant deficiency in inventory controls and is preparing the written communication required by ISA 265. Which content belongs in that communication?

• AA guarantee that the audit found every control deficiency and fraud in the inventory syst…
• BA description of the deficiency and its potential effects, with enough context for govern…
• COnly the name of the employee responsible for the control and a mandatory dismissal date
• DA separate assurance opinion stating that the entity's entire internal-control system is…

In modern computer-assisted auditing, how do Audit Data Analytics (ADAs) enhance substantive testing compared to traditional manual sampling techniques?

• AADAs eliminate the need for the auditor to apply professional judgment or exercise profes…
• BADAs allow auditors to analyze, visualize, and test 100% of transaction populations (e.g.…
• CADAs guarantee that no fraudulent transaction can ever occur within the client's informat…
• DADAs automatically prepare and lodge the corporate tax returns with the Internal Revenue…

When two independent audit firms are jointly appointed and intend to issue one audit report, which engagement practice best supports a defensible shared conclusion?

• AEach firm works independently and the two reports are combined after signing without reco…
• BThe firms document the division of work, coordinate materiality and risk decisions, revie…
• CThe larger firm sets all judgments while the smaller firm performs procedures without acc…
• DThe firms avoid exchanging working conclusions so that each remains independent of the ot…

In public sector auditing under the International Standards of Supreme Audit Institutions (ISSAI) and the Office of the Auditor General of the Union (OAG), what are the '3Es' evaluated during a Performance Audit (Value for Money audit)?

• AEquity, Execution, and Enforcement
• BEconomy, Efficiency, and Effectiveness
• CEthics, Embezzlement, and Evidence
• DExpenditure, Estimation, and Exemption

Under International Standard on Quality Management (ISQM) 2, what is the mandatory 'cooling-off period' required before an engagement partner can be appointed as the Engagement Quality Reviewer (EQR) for that same audit engagement?

• ANo cooling-off period is required if the partner is a senior partner in the firm
• BA cooling-off period of at least two consecutive years, or such longer period as specifie…
• CExactly six months following the signing of the audit report
• DA cooling-off period of ten years under all circumstances

During the audit of a financially distressed subsidiary under ISA 570, management relies on a Letter of Support (comfort letter) from the parent company to justify using the going concern basis of accounting. What is the auditor's primary responsibility regarding this letter?

• AAccept the letter at face value as conclusive evidence without further verification
• BAudit and verify both the legal enforceability of the commitment and the parent company's…
• CReject all letters of support as legally invalid under the Myanmar Companies Law
• DDemand that the parent company deposit 100% of the subsidiary's debt into an escrow accou…

Under International Standard on Assurance Engagements (ISAE) 3000 (Revised), how does a limited-assurance engagement fundamentally differ from a reasonable-assurance engagement?

• ALimited assurance provides absolute assurance on a smaller sample size, while reasonable…
• BIn a limited assurance engagement, the auditor performs fewer procedures and expresses th…
• CLimited assurance is issued by non-accountants, whereas reasonable assurance can only be…
• DLimited assurance applies only to state economic enterprises, while reasonable assurance…

Under ISA 620 (Using the Work of an Auditor's Expert), when an auditor engages an external independent valuation specialist to assess the fair value of complex mineral exploration assets, what is the auditor's professional duty?

• AThe auditor may transfer all responsibility for the valuation to the expert and omit any…
• BThe auditor must evaluate the competence, capabilities, and objectivity of the expert, ob…
• CThe auditor must co-sign the independent valuation certificate as a certified mining engi…
• DThe auditor must ensure that the expert is a full-time salaried employee of the audit cli…

A medical diagnostics manufacturer incurs the following whole-life costs over a planned 4-year product life cycle: Research and Development = 60,000,000 MMK; Production Facility Setup = 20,000,000 MMK; Total Manufacturing Costs = 140,000,000 MMK; Marketing and Distribution = 30,000,000 MMK; Decommissioning and Disposal = 10,000,000 MMK. Total planned lifetime production output is 130,000 units. Under Life-Cycle Costing, what is the life-cycle cost per unit?

• A2,000 MMK per unit
• B1,077 MMK per unit
• C1,538 MMK per unit
• D2,500 MMK per unit

In Throughput Accounting, what is the formula used to calculate the 'Throughput Accounting Ratio' (TPAR)?

• ATPAR = Total Factory Costs / Total Gross Sales
• BTPAR = (Throughput per bottleneck minute) / (Factory Cost per bottleneck minute)
• CTPAR = Net Profit / Total Invested Operating Capital
• DTPAR = Direct Material Cost / Direct Labor Cost

A production line has total weekly operating factory costs of 18,000,000 MMK (excluding direct materials) and a bottleneck assembly station with 60 hours (3,600 minutes) of capacity per week. Product Gamma sells for 12,000 MMK per unit and requires direct materials of 4,000 MMK. It requires 1.2 minutes of time on the bottleneck assembly machine. What is the Throughput Accounting Ratio (TPAR) for Product Gamma?

• A1.33
• B0.75
• C1.60
• D2.00

According to Eliyahu Goldratt's Theory of Constraints (TOC), what is the correct sequence of the 'Five Focusing Steps' to achieve continuous process improvement?

• AEliminate, Automate, Delegate, Outsource, Terminate
• BIdentify the system's constraint(s) -> Exploit the constraint(s) -> Subordinate everythin…
• CStandardize, Measure, Benchmark, Re-engineer, Downsize
• DPlan, Do, Check, Act, Report

Division A manufactures a standardized mechanical component that it can sell on an active external intermediate market for 5,000 MMK per unit. Division A incurs variable manufacturing costs of 3,200 MMK per unit and has zero spare capacity (it can sell all output externally). Division B of the same group wishes to purchase 2,000 units internally. Division A would save 300 MMK per unit in packaging and transport costs on internal transfers. What is the optimal transfer price per unit that preserves goal congruence under the general transfer pricing rule?

• A3,200 MMK per unit
• B4,700 MMK per unit
• C5,000 MMK per unit
• D2,900 MMK per unit

A divisional operating company has operating profit after tax of 35,000,000 MMK. In arriving at this profit, 8,000,000 MMK of research and development costs for long-term product creation were expensed, and accounting depreciation was 12,000,000 MMK (economic depreciation is agreed at 10,000,000 MMK). Treat those adjustments as after-tax amounts. Net operating assets at the start of the year were 200,000,000 MMK. The group's weighted average cost of capital (WACC) is 10%. Under the Stern Stewart Economic Value Added (EVA) methodology, what is the division's EVA for the year?

• A24,200,000 MMK
• B25,000,000 MMK
• C15,000,000 MMK
• D21,000,000 MMK

In the Balanced Scorecard framework established by Robert Kaplan and David Norton, what are the four integrated operational perspectives that link strategic vision to performance metrics?

• AIncome, Balance Sheet, Cash Flow, and Tax Compliance
• BFinancial, Customer, Internal Business Processes, and Learning and Growth
• CMarketing, Engineering, Personnel, and Legal Affairs
• DShort-term, Medium-term, Long-term, and Permanent

What is the primary operational philosophy of the 'Beyond Budgeting' movement in modern management accounting?

• ADoubling the frequency of traditional annual fixed budgeting negotiations from once a yea…
• BAbandoning rigid traditional annual fixed budgets in favor of continuous rolling forecast…
• CEliminating all management accountants and software systems from corporate administration
• DMandating that operating expenses are never permitted to exceed budgeted revenues by even…

In strategic cost management, how does 'Competitive Benchmarking' differ from 'Functional (Generic) Benchmarking'?

• ACompetitive benchmarking compares metrics against direct industry rivals, whereas functio…
• BCompetitive benchmarking is illegal under commercial law, whereas functional benchmarking…
• CCompetitive benchmarking focuses exclusively on executive salaries, while functional benc…
• DCompetitive benchmarking applies only to government ministries, while functional benchmar…

In Environmental Management Accounting (EMA), what is the key insight of 'Material Flow Cost Accounting' (MFCA - ISO 14051)?

• AAll environmental waste costs are minor externalities that should be excluded from factor…
• BMaterial losses, emissions, and waste generated during manufacturing represent not only p…
• CEnvironmental taxes paid to the government should be capitalized into property, plant, an…
• DCompanies must never manufacture products that consume petroleum products

What is the primary strategic risk when an enterprise adopts a 'Price Skimming' strategy for a newly developed technological product?

• AThe product's low initial price will cause consumers to view it as low-quality
• BSetting an initial high price to extract consumer surplus from early adopters attracts ag…
• CThe strategy automatically triggers anti-dumping tariff sanctions by the Ministry of Comm…
• DThe company will suffer catastrophic capacity overutilization on the first day of product…

In Customer Profitability Analysis, what phenomenon does a 'Whale Curve' of cumulative customer profitability illustrate?

• AEvery individual customer generates an identical net operating profit margin of 10%
• BA relatively small set of customers can generate more than 100% of reported profit before…
• CHigh-revenue customers are necessarily the most profitable because service costs do not v…
• DCustomer profitability normally rises in a straight line as sales volume increases