Kazakhstan CAP common mistakes
Kazakhstan CAP · Understand the traps and how to avoid them.
Calculating deferred tax by applying the current tax rate to every temporary difference without first classifying each difference as taxable or deductible and confirming the rate that will apply when the item reverses.
Candidates memorise 'temporary difference × tax rate' and treat IAS 12 as a single formula, so they skip the recognition tests and the requirement to use enacted or substantively enacted rates expected at reversal.
What to do instead
Work a two-column schedule: carrying amount, tax base, difference, taxable or deductible, then apply the reversal-period rate. Explicitly state why any unrecognised deferred tax asset (insufficient probable future taxable profit) is not recorded.
Presenting a revaluation surplus net of deferred tax inside profit or loss, or routing the whole gain through OCI without testing the reversal of a prior impairment loss.
Candidates conflate the treatment of the asset revaluation with the tax effect and forget that the deferred tax on the revaluation follows the gain (OCI), while reversals of previously recognised impairment go to profit or loss.
What to do instead
Split the gain into the impairment-reversal portion (P&L) and the remaining revaluation (OCI), and allocate deferred tax to each component in the same proportion. Show the OCI movement gross with its tax line.
Treating all costs incurred up to the point an asset is ready for use as capitalisable borrowing costs or development costs, without applying the qualifying-asset and six-criteria tests.
Candidates over-apply 'capitalise if it relates to the asset' and do not check whether the asset is a qualifying asset under IAS 23 or whether IAS 38 development criteria are met.
What to do instead
Before capitalising, write the qualifying-asset conclusion and, for development, list each IAS 38 criterion with one line of evidence. Suspend capitalisation during extended interruptions and stop when the asset is ready for its intended use.
Computing variances to the wrong level: calculating a price variance on the quantity purchased while the question asks for the quantity used, or mixing labour rate and efficiency variances when idle time is present.
Candidates learn variance formulae by rote and do not read which quantity basis the scenario supplies, and they ignore idle time as a separate efficiency element.
What to do instead
Annotate the data: mark actual quantity purchased, actual quantity used, and standard quantity allowed. Compute the price variance on purchases only if inventory is held, and present idle time as its own line inside the labour efficiency variance.
Using a single plant-wide overhead rate when the scenario provides activity drivers that clearly require activity-based costing, and then explaining the resulting cost distortion as a pricing decision.
Candidates default to the absorption-costing template they practised and do not check whether the question supplies cost pools and drivers that signal ABC.
What to do instead
Scan the stem for multiple cost pools and drivers first. If present, build an ABC schedule, then reconcile total overhead allocated under both methods and state which product is over- or under-costed and why.
Concluding an audit opinion without linking the identified risk to the specific assertion, the procedure performed, and the evidence obtained, so the report reads as a generic 'except for the above'.
Candidates write the opinion first and retrofit the evidence, and they confuse a scope limitation (disclaimer or qualified) with a material misstatement (qualified or adverse).
What to do instead
Draft a three-line evidence chain for each issue: assertion at risk, procedure and result, effect on the financial statements. Then apply the pervasiveness test explicitly before choosing the opinion type.
Treating a related-party transaction disclosed in the notes as sufficiently addressed by reading the disclosure, without obtaining evidence that the transaction was at arm's length or properly authorised.
Candidates equate disclosure with audit evidence and do not consider that the risk is completeness and valuation of the transaction, not just its presentation.
What to do instead
Design procedures over completeness (search board minutes, confirm with the counterparty, review the register of related parties) and over terms (compare with third-party pricing). Document the conclusion on arm's-length terms and authorisation.
Applying the corporate income tax rate to a dividend or to a non-resident payment without checking the withholding regime, the reduced treaty rate, and whether the payer is a withholding agent.
Candidates carry over the 20% CIT rate by habit and do not separate the tax on the payer's profit from the withholding tax on the distribution, nor do they check treaty conditions and residency certificates.
What to do instead
For every cross-border or distribution item, state three things separately: CIT on the payer, withholding tax rate and base, and the treaty or domestic condition that must be met. Note the filing and remittance deadline for the withholding agent.
Advising on a corporate decision (share issue, dividend, major transaction) without checking whether the decision falls within the competence of the general meeting, the board, or the executive body, and without checking quorum and voting thresholds.
Candidates focus on the commercial merits and treat governance as background, forgetting that an improperly authorised decision can be challenged regardless of its economics.
What to do instead
Before advising, produce a short competence map: decision, competent body, quorum, majority required, documentation. Flag any decision that requires a qualified majority or a related-party approval.
Answering an ethics scenario by naming the fundamental principle breached but not identifying the threat type, evaluating its significance, and selecting a safeguard or course of action.
Candidates stop at the label ('integrity', 'objectivity') because that is what they memorised, and the question actually asks for the response.
What to do instead
Use a fixed four-step structure: identify the threat (self-interest, self-review, advocacy, familiarity, intimidation), assess significance, list safeguards, and state the action to take, including escalation or resignation if no safeguard is available.