Integrated Case Studies for Stellenbosch Accounting Students (SU BAcc Integrated Accounting 378 / 388 Exam Notes)

Integrated, case-based questions are at the heart of Stellenbosch University (SU) BAcc assessments, especially in third- and fourth-year modules such as Integrated Accounting 378, Financial Accounting 388 and Professional Practice 478. These notes focus on how to tackle integrated case studies that combine Financial Accounting, Management Accounting, Taxation and Auditing, geared to the South African context. While the primary focus is SU, links are drawn to similar approaches used in UNISA (e.g. FAC3703, MAC3701), CUT (e.g. ACCJ60AS) and other South African universities so you can use common online keywords when searching past papers and resources.

The aim is to help SU BAcc students understand how examiners think, how case information is structured, and how to integrate IFRS, SA tax rules and audit/management accounting principles under time pressure. Each section uses South African-style scenarios, with emphasis on the kind of integrated questions you can expect in SAICA-aligned programmes.

1. Exam Mindset and Structure for SU Integrated Case Studies

Integrated case studies in SU’s BAcc stream (especially in Financial Accounting 388 and Integrated Accounting 378) are designed to test whether you can think and act like a trainee accountant working on a real South African client. This differs significantly from straightforward “textbook” questions that focus only on one topic.

1.1 What “Integrated” Means in the SU / SAICA Context

In the Stellenbosch University BAcc and BAccHons programmes, integration generally means:

Multiple disciplines in one scenario
A single case will typically touch on:
- Financial Accounting (IFRS, Companies Act)
- Management Accounting (costing, CVP, budgeting, performance measures)
- Taxation (Income Tax, VAT, CGT at a basic level)
- Auditing / Assurance (risk, controls, basic procedures)
Multiple required skills in one answer
SU exams are SAICA competency-based. You will often have to:
- Calculate figures (journal entries, tax consequences, variances)
- Explain and apply theory (discuss treatment under IFRS, interpret ratios)
- Advise a client (recommend a structure, explain risks, suggest controls)

Example: A case about a medium-size manufacturing company may require you to:

Draft adjusting entries under IFRS.
Prepare a segment report or contribution income statement.
Analyze tax implications of an asset acquisition.
Identify audit risks and suggest procedures.

1.2 Typical Exam Layout in SU Integrated Accounting & FA Modules

While each semester may differ, a common structure for modules like Integrated Accounting 378 and Financial Accounting 388 is:

One long integrated case (40–60 marks)
- 60–90 minutes of your time budget.
- Often broken into 5–8 sub-requirements.
- Covers at least two, sometimes three disciplines.
Two or three medium-length questions (20–35 marks each)
- More focused (e.g. mostly Financial Accounting with a bit of tax).
- Often structured around mini-cases rather than one long story.

Compare with UNISA modules like FAC3703 Integrated Financial Accounting:

Also heavily case-based, but often with fewer narrative details and more focused IFRS content.
Distance students often rely on self-study of integrated questions.

At CUT (Central University of Technology) in modules like ACCJ60AS Accounting, integrated practicals may:

Use a specific business (like a construction company) and require:
- Financial statements
- Costing
- Internal control evaluation

SU’s integrated questions are similar in spirit but pitched at a SAICA-equivalent technical level.

1.3 Time Management and Mark Allocation

Time management is crucial. For SU exams, a common rule of thumb is 1.5 minutes per mark (allowing a small buffer). Thus:

50-mark integrated case ⇒ ±75 minutes.
30-mark question ⇒ ±45 minutes.

Practical tactics:

Step 1: Scan the entire question (3–5 minutes)
- Identify all required sections (e.g. Part A: IFRS; Part B: tax; Part C: audit).
- Highlight verbs: calculate, explain, discuss, recommend.
Step 2: Plan order of attack (1–2 minutes)
- Start with sections where:
  - You can score calculation marks quickly.
  - Information overlap is minimal (so you reduce flipping back).
Step 3: Allocate time per sub-question
For a 50-mark case split into 6 parts (10, 8, 12, 6, 8, 6):
- Mark down target times: 15, 12, 18, 9, 12, 9 minutes.
- Use your watch or exam clock aggressively.
Step 4: Move on when time is up
- An incomplete 10-mark answer plus a full 20-mark answer is better than a perfect 10-mark answer and zero on the rest.

1.4 Reading and Marking the Case Like a Trainee Accountant

Treat the case like client information you’re reviewing. Techniques that help:

Use colour-coded underlining (if allowed by exam rules)
- Red: IFRS / financial reporting data.
- Blue: Tax-related figures and dates.
- Green: Internal control and audit risk hints.
- Pencil margins: For calculations and cross-references.
Build a mini “data map” in the margin
Example (for a manufacturing case):
- PPE: cost, dates, fair value, impairment hints.
- Inventory: costing method, NRV issues.
- Revenue: contracts, customer terms, related parties.
- Tax: allowances, capital gains, fringe benefits.
Separate “given” vs “assumed” vs “to be derived”
- Given: Figures directly stated (e.g. “The machine cost R620 000 on 1 March 2023”).
- Assumed: You must pick IFRS policy consistent with the case or prior year.
- To be derived: Depreciation, profit, variances, tax liability.

This approach is similar to what you’d use in UNISA FAC3703 exam papers or MAC3701 integrated assignments, but SU markers often place more emphasis on structure and professional communication.

1.5 Common Pitfalls in SU Integrated Cases

SU examiners often comment on the same recurring weaknesses:

Lack of structure
- Writing long paragraphs with no headings or subheadings.
- Not answering in the same sequence as the question (markers then struggle to award method marks).
Ignoring verb cues
- “Calculate” but you only explain theory.
- “Explain with reference to IFRS 15” and you only give a numerical answer.
Not referencing authority where easy marks are available
- Failing to mention IFRS 16 lease classification rules when clearly relevant.
- Ignoring Income Tax Act sections relevant to allowances.
Not integrating disciplines
- Treating tax and accounting calculations and answers as completely unrelated.
- Forgetting that tax consequences can affect deferred tax in consolidated financial statements.

Developing exam technique in integrated cases is as crucial as mastering the technical standards and formulas.

2. Financial Accounting in Integrated Cases (IFRS, Groups, and Presentation)

Financial Accounting (FA) is usually the backbone of integrated case studies at SU, especially in Financial Accounting 388 and Accounting 378. Cases often mimic SAICA APC-style integrated tasks but scaled to undergraduate level.

2.1 IFRS Themes Commonly Integrated with Other Disciplines

The following IFRS areas often feature prominently in integrated SU cases:

Property, Plant and Equipment (IAS 16) and Impairment (IAS 36)
- Revaluation vs cost model.
- Component depreciation.
- Impairment indicators (e.g. obsolescence, declining cash flows).
- Tax integration: capital allowances, recoupments, deferred tax.
Inventory (IAS 2)
- Cost formulas (FIFO, weighted average).
- Net realisable value (NRV) write-downs.
- Overhead allocation and integration with Management Accounting.
Revenue from Contracts with Customers (IFRS 15)
- Identifying performance obligations.
- Over-time vs point-in-time recognition.
- Variable consideration, discounts, rebates.
- Tax integration: VAT implications.
Leases (IFRS 16)
- Lessee right-of-use assets and lease liabilities.
- Lessor classification (finance vs operating).
- Tax integration: wear-and-tear vs lease expense.
Financial Instruments (IFRS 9) and Fair Value Measurement (IFRS 13)
- Basic classification (amortised cost, FVPL, FVOCI).
- Simple embedded derivatives or convertible instruments.
- Interaction with treasury and risk management.
Consolidations (IFRS 10, IFRS 3, IAS 28)
- Acquisition date adjustments and goodwill calculation.
- Intercompany transactions and unrealised profits.
- NCI calculation and group reserves.
- Tax integration: fair value adjustments impacting deferred tax.

2.2 Worked Integrated Example: PPE, Tax, and Ratios

Consider a simplified SU-style case fragment:

Case fragment:

Stellenbosch Machines (Pty) Ltd, a South African manufacturer, acquired a CNC machine on 1 March 2023 for R620 000 (excluding VAT). The machine has a useful life of 5 years and no residual value. For tax purposes, it qualifies for a wear-and-tear allowance over 4 years, straight-line. The company uses the cost model under IAS 16.

Required (part of a longer case):

Calculate depreciation expense for the financial year ended 28 February 2024.

Calculate the tax allowance for the same year, assuming the company’s year of assessment ends on 28 February 2024.

Briefly comment on the reason for a deferred tax asset or liability arising from this asset at year-end.

Step 1: Financial depreciation under IAS 16

Cost: R620 000
Useful life: 5 years
Method: straight-line
Acquisition date: 1 March 2023
Financial year-end: 28 February 2024 (12 months of use)

Depreciation per year:
R620 000 ÷ 5 = R124 000 per annum

For year ended 28 Feb 2024: full year, so R124 000.

Step 2: Tax wear-and-tear

Wear-and-tear period: 4 years straight-line.
Annual allowance: R620 000 ÷ 4 = R155 000.
Year of assessment ends 28 Feb 2024, machine used full year ⇒ full allowance.
Tax allowance: R155 000.

Step 3: Deferred tax implication

Accounting depreciation: R124 000 (lower).
Tax allowance: R155 000 (higher).
Tax base of asset at year-end:
Cost (R620 000) – Tax allowance (R155 000) = R465 000.
Carrying amount at year-end:
Cost (R620 000) – Accumulated depreciation (R124 000) = R496 000.

Carrying amount (R496 000) > Tax base (R465 000) by R31 000.
This temporary difference will result in future taxable amounts when the asset is recovered (less tax allowances remaining than accounting depreciation). Thus, a deferred tax liability arises.

If the tax rate is 27%:

DTL = R31 000 × 27% = R8 370.

In an integrated SU case, this figure may then be:

Included in group financial statements (FA).
Used in a tax computation question.
Used in ratio analysis (e.g. impact on ROA, debt-to-equity).

2.3 Common SU-Style IFRS/Tax Interactions

Examiners like to test awareness that accounting and tax treatments differ. Examples frequently used:

Revaluation gains (IAS 16 and IAS 12)
- Accounting: revaluation surplus in OCI.
- Tax: no revaluation allowance until disposal (leading to deferred tax liability).
- Integrated question:
  - Calculate revaluation surplus, deferred tax, and updated equity.
  - Discuss impact on gearing or interest cover.
Finance leases vs instalment sale agreements
- IFRS 16: On-balance-sheet right-of-use asset and lease liability.
- Tax: Many leases treated as instalment credit agreements for allowances.
- Integrated question:
  - Prepare journal entries.
  - Calculate tax allowances and deferred tax.
  - Evaluate impact on debt covenants.
Revenue recognition and tax timing differences
- IFRS 15: Over time vs point in time recognition.
- Tax: Often when invoice is issued or payment is received (depending on VAT method and tax rules).
- Integrated question:
  - Identify timing difference.
  - Discuss how accrual vs cash flows affect both financial statements and performance metrics.

2.4 Consolidations and Business Combinations in Integrated Cases

Group accounts are a high-value area in Financial Accounting 388 and appear prominently in integrated examinations.

2.4.1 Core consolidation mechanics

Key components:

Control assessment (IFRS 10)
- Voting rights > 50%.
- Power + exposure to variable returns + ability to use power to affect returns.
Business combination accounting (IFRS 3)
- Consideration transferred (cash + fair value of shares issued + contingent consideration).
- Net identifiable assets at fair value.
- Goodwill or bargain purchase gain.
Non-controlling interests (NCI)
- Measured at fair value or proportionate share of net assets.
Post-acquisition profits
- Group share vs NCI share allocation.
Intragroup transactions
- Unrealised profits in inventory or PPE.
- Intercompany loans and interest.
- Intercompany dividends.

2.4.2 Mini-case example: Intercompany inventory and tax

Case fragment:

SU Retail (Pty) Ltd owns 80% of Maties Distributors (Pty) Ltd. On 1 January 2024, Maties sold inventory to SU Retail for R150 000 at a 25% mark-up on cost. At the year-end, 28 February 2024, SU Retail still had 40% of this inventory on hand. The corporate tax rate is 27%.

Required (part of integrated case):

Calculate the unrealised profit on consolidation at 28 February 2024.

Prepare the consolidation adjustment for inventory and cost of sales.

Determine the deferred tax effect.

Step 1: Compute cost and profit

Maties’ selling price: R150 000
Mark-up on cost: 25% ⇒ Profit = 25% of cost.

Let cost = x. Then:
x + 0.25x = 150 000 ⇒ 1.25x = 150 000 ⇒ x = 120 000.

Cost: R120 000
Profit: R30 000.

Step 2: Closing inventory portion

SU Retail still holds 40% of the inventory:

Closing inventory (at selling price) = 0.40 × R150 000 = R60 000.
Of this R60 000, cost portion: 0.40 × R120 000 = R48 000.
Profit portion = R60 000 – R48 000 = R12 000.

This R12 000 is unrealised profit from the group’s perspective.

Step 3: Consolidation adjustment

To remove unrealised profit:

Dr Group cost of sales R12 000
Cr Group inventory R12 000

This reduces group inventory to cost and increases group cost of sales, reducing group profit.

Step 4: Deferred tax

Tax has already been paid on Maties’s profit of R30 000. For the portion still in inventory, the profit of R12 000 is unrealised for group purposes but has been taxed already in the subsidiary.

This creates a deductible temporary difference (when inventory is sold externally, profit will be realised but no further tax arises).

Deductible temporary difference: R12 000.
Deferred tax asset: 27% × R12 000 = R3 240.

Consolidation journals:

Dr Cost of sales R12 000
Cr Inventory R12 000
Dr Deferred tax asset R3 240
Cr Income tax expense R3 240

In an integrated question, you may then have to:

Disclose this in a consolidated statement of financial position.
Discuss tax planning or performance evaluation implications in an MA or Tax-angled sub-question.

2.5 Presentation, Disclosure and Professional Communication

SU marking rubrics increasingly reward:

Clear referencing to IFRS standards.
Correct use of financial statement formats (IFRS-based).
Structured explanations that could plausibly be given to a non-accountant director.

Strategies:

Use mini-headings in narrative answers:
- “Identification of performance obligations (IFRS 15)”
- “Measurement of lease liability (IFRS 16)”
Link numbers to reasoning:
- “Depreciation is based on the cost model, as the entity does not hold PPE primarily for sale and revaluation is not part of its usual practice…”
Brief, precise sentences, not essays:
- Focus on applying the standard to the facts given.
- Avoid generic IFRS summaries that do not answer the specific scenario.

These habits also apply to UNISA FAC3703 integrated assignments and CUT ACCJ60AS case-based tests, making them valuable generic skills for South African accounting students.

3. Management Accounting Integration (Costing, Budgeting and Performance)

Management Accounting often appears in integrated cases as a second layer applied to the same data used in Financial Accounting. SU modules like Management Accounting 278 and Advanced Management Accounting 388 feed into integrated case thinking, even if they are not explicitly labelled “integrated” on the timetable.

3.1 How MA Shows Up in SU Integrated Cases

Common patterns in SU BAcc integrated exams:

Costing and profitability analysis based on IFRS figures
- Use inventory and cost data already computed under IFRS to:
  - Determine unit costs.
  - Perform CVP analysis or break-even.
  - Compare product-line profitability.
Budgeting and variance analysis
- Use prior-year financial statements or case assumptions to:
  - Construct budgets.
  - Conduct variance analysis.
  - Relate findings to performance appraisal or bonuses.
Performance measurement
- Use ratios and segment data from FA to:
  - Evaluate divisional performance.
  - Discuss ROI vs residual income.
  - Propose non-financial KPIs.
Decision-making scenarios
- Relevant cost analysis for special orders.
- Make-or-buy decisions.
- Shutdown decisions.

These themes resemble those in UNISA MAC3701 and MAC3702 exams and in CUT modules focusing on cost and management accounting, but SU will often integrate them explicitly with IFRS-based data.

3.2 CVP (Cost-Volume-Profit) in an Integrated Manufacturing Case

Consider an SU-style integrated mini-case:

Case fragment:

Maties Manufacturing (Pty) Ltd produces a single product, using Cost of Sales data from the FA records. For the year ended 31 December 2024, the accounting records showed:

Sales revenue: R3 000 000

Cost of sales: R1 800 000 (all variable)

Operating expenses: R750 000, of which 60% are fixed and 40% variable with sales volume.

Required (part of longer integrated question):

Calculate the break-even sales revenue.

Determine the margin of safety in rand and as a percentage of actual sales.

Step 1: Classify costs

Variable cost of sales: R1 800 000.
Operating expenses: R750 000:
- Fixed operating expenses: 60% × 750 000 = R450 000.
- Variable operating expenses: 40% × 750 000 = R300 000.

Thus:

Total variable costs = R1 800 000 + R300 000 = R2 100 000.
Contribution = Sales – variable costs = R3 000 000 – R2 100 000 = R900 000.
Fixed costs (for CVP) = R450 000.

Step 2: Contribution margin ratio

Contribution margin ratio (CM%) = Contribution ÷ Sales
= 900 000 ÷ 3 000 000 = 30%.

Step 3: Break-even sales

Break-even sales (R) = Fixed costs ÷ CM%
= 450 000 ÷ 0.30 = R1 500 000.

Step 4: Margin of safety

Margin of safety (R) = Actual sales – break-even sales
= 3 000 000 – 1 500 000 = R1 500 000.
Margin of safety (%) = 1 500 000 ÷ 3 000 000 = 50%.

In an integrated SU exam, these results might then tie into:

FA: Explore how changes in sales affect profit in the income statement.
MA: Recommend pricing strategies, cost reduction strategies.
Tax: Estimate taxable income based on CVP results.

3.3 Special Orders and Relevant Costing

Examiners like to see if you can distinguish between:

Sunk costs (irrelevant).
Committed fixed costs (often irrelevant for one-off decisions).
Incremental costs and revenues (relevant).

Mini-case:

Case fragment:

Maties Manufacturing has spare capacity of 5 000 units. A foreign customer offers to buy 4 000 units at R70 per unit. Normal selling price is R100 per unit. Variable production cost is R55 per unit and variable selling costs of R5 per unit apply to regular customers but not to this export order. There are no additional fixed costs for the order.

Required:

Should the order be accepted based purely on financial considerations?

How could this decision impact future financial statements?

Step 1: Relevant revenues and costs

Extra revenue: 4 000 × R70 = R280 000.
Relevant variable costs:
- Production: 4 000 × R55 = R220 000.
- Selling: none for export order.
Contribution from order = 280 000 – 220 000 = R60 000.

As there are no extra fixed costs and spare capacity exists, the order adds R60 000 to profit. Purely financially, accept the order.

Step 2: Integrated considerations

FA:
- Record additional sales and cost of sales, increasing profit.
- Any foreign exchange implications (if denominated in foreign currency)?
MA:
- Assess long-term pricing strategy; risk of undercutting normal selling price?
Tax:
- Extra taxable income; potential export incentives or foreign tax credits.
Audit:
- Ensure contract terms and pricing approvals are properly documented.

3.4 Budgeting and Variance Analysis in Integrated Cases

SU cases frequently use budget vs actual information:

Using IFRS-based income statement as the “actual”.
Students must:
- Construct flexible budgets.
- Calculate materials, labour, and overhead variances.
- Explain reasons and managerial responses.

Example structure in a Stellenbosch Accounting 388-style question:

Part A (FA): Prepare an income statement and basic notes.
Part B (MA): Prepare:
- Sales volume variance.
- Sales price variance.
- Variable cost variances.
Part C (MA/FA): Comment on the performance of the sales division.

Tips:

Match volume basis:
- Use units actually sold vs budgeted to distinguish between volume and price effects.
Tie variances back to case story:
- If case mentions aggressive discounting, expect an unfavourable sales price variance but possibly a favourable volume variance.
Connect to performance measurement:
- If sales staff are rewarded on revenue alone, their incentives may cause suboptimal pricing decisions.

These dimensions are similar to those tested in UNISA MAC3702 and CUT management accounting papers, but SU examiners may demand more narrative interpretation in addition to calculations.

3.5 Performance Measurement and Balanced View

When integrated with FA and Audit components, performance questions may ask you to:

Evaluate divisions using:
- Return on investment (ROI).
- Residual income (RI).
- Economic value added-type measures.
Interpret ratios:
- Gross margin, operating margin, ROE, current ratio, debt-to-equity.
Suggest non-financial KPIs:
- Delivery times.
- Defect rates.
- Customer satisfaction measures.

In SU BAcc integrated exams:

Calculation marks are often followed by explanation marks.
You must show awareness that:
- Ratios are influenced by accounting policy choices (e.g. revaluations).
- Tax planning decisions can affect both profit and risk.

4. Taxation in Integrated Case Studies (Income Tax, VAT, and CGT)

Taxation is a common second or third dimension layered onto FA and MA in SU case-based exams. SU modules like Taxation 288 and Advanced Taxation 388 introduce detailed rules, but integrated cases at BAcc level usually test core principles rather than complex planning.

4.1 How Tax is Integrated with Financial Accounting

Typical SU integrated patterns:

Reconciliation from accounting profit to taxable income
- Using FA income statement to:
  - Add back non-deductible expenses.
  - Adjust for capital allowances vs accounting depreciation.
  - Adjust for exempt income and special inclusions.
Capital gains tax (CGT) on disposals
- Disposals of assets already accounted for under IAS 16 / IFRS 9.
- Calculate recoupment (ordinary income) and capital gain (subject to inclusion rate).
Assessed losses and group situation
- Usage of assessed losses at company level.
- No formal group tax relief in SA for income tax, so each entity taxed separately.
- But integrated exam may explore perception of “group” vs company-level tax.
Employees’ tax, fringe benefits and allowances
- Integrated with HR/payroll scenarios.
- Basic knowledge of taxable vs non-taxable fringe benefits.
VAT implications of transactions already classified under IFRS 15 / IFRS 16
- Time of supply rules.
- Zero-rated vs exempt supplies.
- Output vs input VAT.

4.2 Worked Example: Accounting Profit to Taxable Income

Case fragment:

For the year ended 31 December 2024, SU Retail (Pty) Ltd reported an accounting profit before tax of R800 000. This figure includes:

Depreciation of R200 000 on machinery with tax wear-and-tear of R260 000.

Fines and penalties for late payment of suppliers: R15 000.

Interest received from a South African bank: R25 000.

Dividends received from a 10%-held JSE-listed company: R40 000 (already accounted for in profit).
The corporate tax rate is 27%.

Required:

Calculate taxable income.

Calculate income tax expense for the year (ignoring deferred tax).

Step 1: Start with accounting profit

Accounting profit before tax: R800 000.

Step 2: Adjust for tax differences

Depreciation vs wear-and-tear
- Accounting depreciation: 200 000.
- Tax wear-and-tear: 260 000.
- Difference: 60 000 (wear-and-tear higher than depreciation).
- For tax comp, add back accounting depreciation and deduct wear-and-tear:
  - Add back: +200 000
  - Deduct: –260 000
  - Net effect: –60 000 reduction in taxable income.
Fines and penalties
- Generally not deductible.
- Already expensed in profit (i.e. reduced accounting profit).
- Add back the full 15 000.
Interest received from a SA bank
- Taxable as interest income; already included in profit.
- No adjustment required (assuming no exempt portions for company).
Dividends received from JSE-listed company (10% holding)
- Generally exempt from income tax for companies.
- Already included in accounting profit; for taxable income you must deduct 40 000.

Step 3: Compute taxable income

Start: R800 000
Add back depreciation: +200 000
Add back fines: +15 000
Less wear-and-tear: –260 000
Less exempt dividends: –40 000

Taxable income: R715 000

Step 4: Income tax expense (current tax)

Income tax = 27% × 715 000 = R193 050.

In an integrated SU case, these figures may tie back to:

FA: Income tax expense and current tax liability in financial statements.
MA: After-tax performance evaluation.
Audit: Assess the risk that non-deductible expenses or exempt income are misclassified.

4.3 CGT Integrated with PPE Disposals

Consider a case where PPE is revalued and then sold, combining IAS 16, IAS 12 and CGT:

Case fragment:

SU Tools (Pty) Ltd purchased a machine on 1 January 2020 for R500 000 (cost). The machine was depreciated over 10 years straight-line, with no residual value. On 1 January 2023, its carrying amount was R350 000. On that date, the company elected to revalue it to R420 000, with the surplus taken to a revaluation reserve. On 31 December 2024, the machine was sold for R380 000. For tax purposes, wear-and-tear allowances claimed to date amount to R200 000, and the tax base at the date of sale is R300 000.
The corporate tax rate is 27%, and the corporate CGT inclusion rate is 80% (effective CGT rate 21.6%).

Required (simplified):

Calculate the accounting gain or loss on disposal.

Calculate any recoupment and capital gain for tax purposes.

Briefly explain deferred tax implications of the revaluation at 1 January 2023 (ignoring later changes).

Accounting treatment

Revalued carrying amount at 1 Jan 2023: R420 000.
By 31 Dec 2024, another 2 years of depreciation (10-year remaining life at 1 Jan 2020; by 1 Jan 2023, 3 years have passed; remaining 7 years, but typically post-revaluation you depreciate revalued amount over remaining useful life – assume remaining life at revaluation was 7 years):

Annual depreciation after revaluation:
R420 000 ÷ 7 ≈ R60 000.

For 2 years (2023 and 2024): 2 × 60 000 = R120 000.

Carrying amount at disposal date:
R420 000 – 120 000 = R300 000.

Sale proceeds: R380 000.
Accounting gain on disposal = 380 000 – 300 000 = R80 000.

Tax treatment

Tax base at sale date: R300 000 (given).
Proceeds: R380 000.

Difference: 380 000 – 300 000 = R80 000.

Tax law may treat:

Recoupment: Up to original cost minus tax value (i.e. allowances claimed), but in this simplified scenario, assume:
- Recoupment of allowances = Min (allowances claimed, proceeds over tax value).
- Allowances claimed: 200 000.
- Proceeds over tax value: 80 000.
  ⇒ Recoupment: R80 000 (fully ordinary income; no capital gain remains).

Thus:

Ordinary income: R80 000 recoupment.
Capital gain: R0 (in this simple exam version).

In more complex real-world situations, part could be recoupment and part capital gain.

Deferred tax on revaluation at 1 Jan 2023

At revaluation date:

Carrying amount increased from 350 000 to 420 000: surplus 70 000 in OCI.
Tax base remained at cost less allowances = 500 000 – (wear-and-tear to date; say 3 years at 50 000/year = 150 000) ⇒ 350 000 (coincidentally same as pre-revaluation carrying amount in this setup).

Temporary difference: 420 000 – 350 000 = R70 000.
This will result in future taxable amounts when asset is recovered (sold).

Deferred tax liability at that point: 27% × 70 000 = R18 900, recognised in OCI (because the underlying gain was in OCI).

In an integrated SU exam, this case could then interact with:

Statement of changes in equity (revaluation reserve, retained earnings).
Tax computation (recoupment as ordinary income).
Performance ratios (impact of revaluation and subsequent disposal).

4.4 VAT in Integrated Cases

VAT is frequently tested in combination with revenue recognition and expense classification.

Common exam features:

Time of supply
- Basic rule: earlier of invoice date or payment received.
- Integrated with IFRS 15 revenue recognition (over time vs point in time).
Output VAT vs input VAT
- Sales to customers (standard-rated, zero-rated, exempt).
- Purchases (claimable input VAT if vendor is registered and supply is taxable).
Mixed supplies
- E.g. a company that rents out residential property (exempt) and also sells goods (taxable).
- Need to apportion input VAT.

A mini integrated VAT example:

Case fragment:

SU Retail (Pty) Ltd is a registered VAT vendor. On 15 March 2024, it sold goods for R230 000 including VAT to a customer on 30-day credit terms. The VAT rate is 15%. In its accounting records, the sale was recorded as R200 000 plus VAT of R30 000.

Required:

Confirm whether the accounting treatment is correct.

Explain the VAT implication for the March 2024 VAT period.

Step 1: Check the accounting entry

If total invoice amount is R230 000 including VAT at 15%:

VAT-exclusive amount = 230 000 ÷ 1.15 = R200 000.
VAT = 230 000 – 200 000 = R30 000.

The accounting entry:

Dr Trade receivables 230 000
Cr Sales revenue 200 000
Cr Output VAT 30 000

This is correct.

Step 2: VAT implication

Output VAT of R30 000 must be included in the VAT 201 return for the period including 15 March 2024.
Time of supply rule: On invoice date (15 March 2024) since it is earlier than payment receipt (30 days later).
VAT is payable to SARS even though cash has not yet been received.

Integrated with FA:

Revenue recognised at invoice date (IFRS 15, assuming control passes at dispatch/delivery).
Receivable of R230 000 appears in the statement of financial position.
Output VAT liability appears under current liabilities.

4.5 Linking Tax with Management and Audit

Taxation cross-links with other disciplines in integrated exams:

Management Accounting
- Taxable income vs accounting profit in performance evaluation.
- Net-of-tax cash flows in capital budgeting (NPV, IRR).
Auditing
- Inherent risk in tax computations.
- Detection risk where complex CGT calculations or VAT apportionments are involved.
- Tests of controls over:
  - Payroll tax.
  - VAT return preparation.
  - Corporate tax provision.

SU integrated cases may require:

Identifying major tax risks (e.g. misclassification of capital vs revenue).
Recommending documentation and review controls for the finance department.

5. Auditing and Assurance Dimensions in Integrated SU Cases

Auditing components are increasingly included in integrated case studies, particularly in Auditing 288 and Auditing 388 at Stellenbosch University. Cases align to SAICA competencies and may resemble scenarios seen later in SAICA ITC and APC case studies.

5.1 Auditing Themes in Integrated Cases

Commonly examined aspects:

Risk assessment
- Identify business risks (strategic, operational).
- Translate into financial statement audit risks (misstatements).
- Identify significant accounts/areas (e.g. revenue, inventory, provisions).
Internal controls
- Evaluate design and implementation of controls.
- Recommend improvements.
- Address segregation of duties, authorisation, reconciliations.
Substantive procedures and tests of controls
- Propose specific audit procedures for key assertions.
- Link procedures to risks and assertions (existence, completeness, accuracy, valuation, rights & obligations, presentation & disclosure).
Ethical issues and independence
- Identify threats to independence.
- Propose safeguards.

5.2 Integrated Risk Assessment Example

Case fragment:

You are an audit senior at Maties Auditors Inc., planning the 31 December 2024 audit of SU Retail (Pty) Ltd, a new client. The company sells electronic devices from a single large store and via an online platform. It offers generous return and warranty policies. The case indicates that:

Revenue has grown 30% year-on-year, mainly through online sales.

Inventory includes high-value smartphones that are easily portable.

The company is transitioning to a new inventory system during November 2024.

There is a bonus scheme for sales managers based on reported sales.

Required (part of integrated question):

Identify and explain three significant audit risks related to revenue and inventory.

For each risk, suggest one relevant substantive procedure.

Possible answer structure

Risk 1: Overstatement of revenue (existence and cut-off)

Explanation:
- Revenue growth of 30% and a bonus scheme tied to reported sales create an incentive to inflate revenue or record sales prematurely.
- Online sales recognition may be complex (timing of control transfer, returns and warranties).
Substantive procedure:
- Perform cut-off testing around year-end:
  - Select a sample of online sales transactions just before and after 31 December 2024.
  - Trace to dispatch/delivery documentation and customer acknowledgements.
  - Verify correct period recognition in accordance with IFRS 15.

Risk 2: Overstatement or misstatement of inventory (existence and valuation)

Explanation:
- High-value smartphones are attractive to theft and may be missing from physical stock.
- System migration in November 2024 introduces risk of errors in inventory records and pricing.
Substantive procedure:
- Attend year-end inventory count:
  - Perform test counts of smartphones and reconcile to final inventory listing.
  - Inspect items for damage or obsolescence.
  - Test unit costs back to supplier invoices.

Risk 3: Understatement of sales returns and warranty provisions (completeness and valuation)

Explanation:
- Generous return and warranty policies may lead to significant post-year-end returns or warranty claims.
- Management may understate provisions to boost profit.
Substantive procedure:
- Inspect a sample of returns and warranty claims after year-end:
  - Determine whether they relate to pre-year-end sales.
  - Consider whether year-end provisions are adequate by comparing trends to prior years and current policies.

In a full integrated SU case, these risk assessments may cross-link with:

FA: Accounting for provisions (IAS 37) and revenue (IFRS 15).
Tax: Deductibility of warranty provisions.
MA: Cost of warranties factored into product pricing.

5.3 Internal Controls in an Integrated Case

SU integrated exams often include scenarios about weak controls in sales, purchases, or payroll cycles, requiring:

Identification of control weaknesses.
Explanation of associated risks.
Recommendation of improvements.

Mini-case:

Case fragment:

SU Retail (Pty) Ltd’s payroll process has the following practices:

The HR manager recruits staff and captures their details directly onto the payroll system without independent review.

The payroll supervisor both processes salaries and prepares the bank EFT file for payment.

The financial manager reviews only the total payroll amount each month, not detailed reports.

Required:

Identify and explain three internal control weaknesses.

For each weakness, recommend an improvement.

Weakness 1: Lack of independent review of new employee setup

Explanation:
- HR manager can capture employees without oversight ⇒ risk of ghost employees and fraudulent payments.
Recommendation:
- Require that a second person (e.g. payroll supervisor or finance team) reviews and approves new employees and changes to payroll master data based on authorised documentation (e.g. contracts, ID copies).

Weakness 2: Inadequate segregation of duties in payroll processing and payment

Explanation:
- The same person (payroll supervisor) processes salaries and prepares EFT payment file ⇒ can create fictitious employees or inflate salaries and then pay themselves.
Recommendation:
- Separate duties:
  - Payroll processing by payroll clerk/supervisor.
  - EFT file preparation by another member of finance.
  - Bank release of payments by financial manager, based on comparison to authorised payroll reports.

Weakness 3: Superficial review of payroll

Explanation:
- Financial manager reviews only total amount, not compositional changes ⇒ may miss unusual individual variances or new employees.
Recommendation:
- Require detailed review:
  - Compare current month’s payroll listing to prior month.
  - Investigate large individual increases, new employees, and unusual deductions.
  - Sign-off on variance analysis.

Such internal control questions may then tie into:

FA: Accurate recording of staff costs and accruals.
Tax: Correct PAYE, UIF, and SDL payments.
Audit: Reduced control risk where strong controls exist, altering substantive testing strategy.

5.4 The Role of Ethics and Independence

Many SU integrated cases lightly touch on ethics and independence, especially in fourth-year and BAccHons modules like Professional Practice 478.

Examples:

Audit firm provides both audit and tax planning services to a client, raising threats to independence.
A trainee discovers a material misstatement and must decide how to escalate it.

Typical requirements:

Identify ethical issues and threats (self-interest, self-review, advocacy, familiarity, intimidation).
Reference the SAICA Code of Professional Conduct (or IRBA Code for auditors).
Suggest safeguards (e.g. different teams, second partner review, declining or limiting services).

These ethical components connect naturally to:

FA: Reliability of financial statements.
Tax: Aggressive tax planning vs compliance.
MA: Pressure on management to achieve targets and cut corners.

5.5 Putting It All Together: A Full Integrated SU-Style Case Outline

To consolidate the above, consider how a full 60–70 mark SU integrated case for a BAcc third or fourth year could be structured:

Scenario:
- Maties Electronics (Pty) Ltd, a medium-sized electronics retailer and online seller based in Stellenbosch.
- Group structure:
  - Parent: Maties Electronics (Pty) Ltd (80% share in SU Online (Pty) Ltd).
- Year-end: 31 December 2024.
Data provided:
- Draft group and separate financial statements.
- Details of:
  - PPE acquisitions and disposals (IFRS 16 leases, IAS 16, IAS 36).
  - Inventory issues (valuation, system migration).
  - Revenue streams (in-store, online, extended warranties).
  - Tax adjustments (depreciation vs wear-and-tear, provisions, fines).
- MA data:
  - Budget vs actual sales and variable costs.
  - Planned expansion of the online business.
- Audit context:
  - Maties Auditors Inc. as auditors.
  - Current year is first-year audit.
Integrated requirements (illustrative mark breakdown):
- Part A – Financial Accounting (28 marks)
  - Prepare selected consolidation adjustments (intragroup sales, unrealised profits).
  - Calculate and journalise PPE revaluation and impairment.
  - Present extracts of consolidated statement of financial position.
- Part B – Taxation (14 marks)
  - Reconcile accounting profit to taxable income for Maties Electronics (Pty) Ltd.
  - Calculate current tax payable.
  - Briefly discuss deferred tax on revaluations.
- Part C – Management Accounting (12 marks)
  - Perform CVP analysis for proposed expansion of online segment.
  - Calculate break-even sales and margin of safety.
  - Comment on feasibility in light of FA and tax results.
- Part D – Auditing and Controls (16 marks)
  - Identify significant audit risks relating to revenue and inventory.
  - Propose tests of controls and substantive procedures.
  - Evaluate payroll and IT system controls, recommending improvements.
- Total: 70 marks
Expectations:
- Consistent figures across all parts (students must not contradict themselves).
- Evidence of integration:
  - Tax effects considered in performance discussions.
  - Auditing risks linked to accounting treatments (e.g. revenue recognition).
- Professional communication:
  - Structured headings, clear language, sensible layout.

This style of comprehensive integrated case aligns with:

SU’s BAcc and BAccHons approach (e.g. Integrated Accounting 378, Financial Accounting 388, Professional Practice 478).
SAICA’s holistic competency framework.
Similar integrated questions in UNISA FAC3703/MAC3701 and CUT ACCJ60AS-type modules, making these notes broadly relevant to South African accounting students preparing for integrated exams.

By studying integrated case patterns, practising multi-discipline questions and always linking IFRS, Tax, MA and Audit perspectives to a single coherent set of facts, Stellenbosch BAcc students can significantly improve both their exam performance and their readiness for SAICA ITC and APC-style assessments.