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(ii) Describe the claim of each of the four identified stakeholders. (4 marks)
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更多“（ii) Describe the claim of each of the four identified stakeholders. （4 marks)”相关的问题
第1题
(ii) Describe the procedures to verify the number of serious accidents in the year ended 30 November 2007.
(4 marks)
第2题
(ii) Describe the basis for the calculation of the provision for deferred taxation on first time adoption of IFRS
including the provision in the opening IFRS balance sheet. (4 marks)
第3题
(ii) Describe the evidence you would seek to support the assertion that development costs are technically
feasible. (3 marks)
第4题
(i) Describe FIVE types of procedures for obtaining audit evidence; and
(ii) For each type of procedure, describe an example relevant to the audit of BANK balances.
Note: The total marks will be split equally between each part. (10 marks)
第5题
(a) ISA 700 Forming an Opinion and Reporting on Financial Statements requires auditors to produce an audit report. This report should contain a number of consistent elements so that users are able to understand what the audit report means.
Required:
Describe FOUR elements of an unmodified auditor’s report and for each explain why they are included. (4 marks)
(b) Bullfinch.com is a website design company whose year end was 31 October 2014. The audit is almost complete and the financial statements are due to be signed shortly. Revenue for the year is $11·2 million and profit before tax is $3·8 million. A key customer, with a receivables balance at the year end of $283,000, has just notified Bullfinch.com that they are experiencing cash flow difficulties and so are unable to make any payments for the foreseeable future. The finance director has notified the auditor that he will write this balance off as an irrecoverable debt in the 2015 financial statements.
Required:
(i) Explain whether or not the 2014 financial statements require amendment; and
(ii) Describe audit procedures which should be performed in order to form. a conclusion on any required amendment.
Note: The total marks will be split equally between each part. (6 marks)
第6题
(a) (i) Identify and explain FOUR financial statement assertions relevant to account balances at the year end; and
(ii) For each identified assertion, describe a substantive procedure relevant to the audit of year-end inventory. (8 marks)
(b) Pineapple Beach Hotel Co (Pineapple) operates a hotel providing accommodation, leisure facilities and restaurants. Its year end was 30 April 2012. You are the audit senior of Berry & Co and are currently preparing the audit programmes for the year end audit of Pineapple. You are reviewing the notes of last week’s meeting between the audit manager and finance director where two material issues were discussed.
Depreciation
Pineapple incurred significant capital expenditure during the year on updating the leisure facilities for the hotel. The finance director has proposed that the new leisure equipment should be depreciated over 10 years using the straight-line method.
Food poisoning
Pineapple’s directors received correspondence in March from a group of customers who attended a wedding at the hotel. They have alleged that they suffered severe food poisoning from food eaten at the hotel and are claiming substantial damages. Pineapple’s lawyers have received the claim and believe that the lawsuit against the company is unlikely to be successful.
Required:
Describe substantive procedures to obtain sufficient and appropriate audit evidence in relation to the above two issues.
Note: The total marks will be split equally between each issue. (8 marks)
(c) List and explain the purpose of FOUR items that should be included on every working paper prepared by the audit team. (4 marks)
第7题
(a) The senior management of Universal University (UU) intend to develop both quantitative and qualitative
measures of performance in relation to lecturing staff.
As part of UU’s mission to provide ‘quality education’ to its students, lecturers are encouraged to apply their skill and judgement in the creation, delivery and assessment aspects of the learning process.
Academic staff are organised on a departmental basis. Each department is expected to achieve and improve on targets in the achievement of its role. As part of their development both personally and as departmental members, staff are encouraged to participate fully in research publication, new course design and innovation in teaching and learning methods.
Academic staff have differing views on whether action on their part in pursuing aspects of such goals is
compatible with their personal goals.
Required:
Using the above scenario, discuss in relation to the lecturing staff within (UU) each of the following:
(i) The application of Agency Theory to staff, in their role as agents and provide examples of the
observability of their role in relation to outcomes and effort;
(ii) The application of Expectancy Theory with specific reference to the relationship between:
– strength of motivation to do (X);
– strength of preference for outcome (Y);
– expectation that doing (X) will result in (Y). (12 marks)
(b) ‘Hard Accountability’ is deemed to apply to lecturing staff in each of three specific areas as follows:
(i) accounting for the numbers;
(ii) ensuring the numbers are accounted for;
(iii) being held accountable for events and circumstances leading to the numbers.
Required:
Describe how each of the areas (b)(i) to (iii) may be applied at UU and critically evaluate this approach to
performance measurement in the context of the scenario described above. (8 marks)
第8题
(a) Explain the purpose of a value for money audit. (4 marks)
(b) Bluesberry hospital is located in a country where healthcare is free, as the taxpayers fund the hospitals which are owned by the government. Two years ago management reviewed all aspects of hospital operations and instigated a number of measures aimed at improving overall ‘value for money’ for the local community. Management have asked that you, an audit manager in the hospital’s internal audit department, perform. a review over the measures which have been implemented.
Bluesberry has one centralised buying department and all purchase requisition forms for medical supplies must be forwarded here. Upon receipt the buying team will research the lowest price from suppliers and a purchase order is raised. This is then passed to the purchasing director, who authorises all orders. The small buying team receive in excess of 200 forms a day.
The human resources department has had difficulties with recruiting suitably trained staff. Overtime rates have been increased to incentivise permanent staff to fill staffing gaps, this has been popular, and reliance on expensive temporary staff has been reduced. Monitoring of staff hours had been difficult but the hospital has implemented time card clocking in and out procedures and these hours are used for overtime payments as well.
The hospital has invested heavily in new surgical equipment, which although very expensive, has meant that more operations could be performed and patient recovery rates are faster. However, currently there is a shortage of appropriately trained medical staff. A capital expenditure committee has been established, made up of senior managers, and they plan and authorise any significant capital expenditure items.
Required:
(i) Identify and explain FOUR STRENGTHS within Bluesberry’s operating environment; and (6 marks)
(ii) For each strength identified, describe how Bluesberry might make further improvements to provide the best value for money. (4 marks)
(c) Describe TWO substantive procedures the external auditor of Bluesberry should adopt to verify EACH of the following assertions in relation to an entity’s property, plant and equipment;
(i) Valuation;
(ii) Completeness; and
(iii) Rights and obligations.
Note: Assume that the hospital adopts International Financial Reporting Standards. (6 marks)
第9题
(a) (i) Defi ne a ‘test of control’ and a ‘substantive procedure’; (2 marks)
(ii) State ONE test of control and ONE substantive procedure in relation to sales invoicing. (2 marks)
(b) Shiny Happy Windows Co (SHW) is a window cleaning company. Customers’ windows are cleaned monthly, the window cleaner then posts a stamped addressed envelope for payment through the customer’s front door.
SHW has a large number of receivable balances and these customers pay by cheque or cash, which is received in the stamped addressed envelopes in the post. The following procedures are applied to the cash received cycle:
1. A junior clerk from the accounts department opens the post and if any cheques or cash have been sent, she records the receipts in the cash received log and then places all the monies into the locked small cash box.
2. The contents of the cash box are counted each day and every few days these sums are banked by which ever member of the fi nance team is available.
3. The cashier records the details of the cash received log into the cash receipts day book and also updates the sales ledger.
4. Usually on a monthly basis the cashier performs a bank reconciliation, which he then fi les, if he misses a month then he catches this up in the following month’s reconciliation.
Required:
For the cash cycle of SHW:
(i) Identify and explain THREE defi ciencies in the system; (3 marks)
(ii) Suggest controls to address each of these defi ciencies; and (3 marks)
(iii) List tests of controls the auditor of SHW would perform. to assess if the controls are operating effectively. (3 marks)
(c) Describe substantive procedures an auditor would perform. in verifying a company’s bank balance. (7 marks)
第10题
(a) The existing standard dealing with provisions IAS 37, Provisions, Contingent Liabilities and Contingent Assets, has been in place for many years and is sufficiently well understood and consistently applied in most areas. The IASB feels it is time for a fundamental change in the underlying principles for the recognition and measurement of non-financial liabilities. To this end, the Board has issued an Exposure Draft, ‘Measurement of Liabilities in IAS 37 – Proposed amendments to IAS 37’.
Required:
(i) Discuss the existing guidance in IAS 37 as regards the recognition and measurement of provisions and why the IASB feels the need to replace this guidance; (9 marks)
(ii) Describe the new proposals that the IASB has outlined in the Exposure Draft. (7 marks)
(b) Royan, a public limited company, extracts oil and has a present obligation to dismantle an oil platform. at the end of the platform’s life, which is 10 years. Royan cannot cancel this obligation or transfer it. Royan intends to carry out the dismantling work itself and estimates the cost of the work to be $150 million in 10 years time. The present value of the work is $105 million.
A market exists for the dismantling of an oil platform. and Royan could hire a third party contractor to carry out the work. The entity feels that if no risk or probability adjustment were needed then the cost of the external contractor would be $180 million in ten years time. The present value of this cost is $129 million. If risk and probability are taken into account, then there is a probability of 40% that the present value will be $129 million and 60% probability that it would be $140 million, and there is a risk that the costs may increase by $5 million.
Required:
Describe the accounting treatment of the above events under IAS 37 and the possible outcomes under the proposed amendments in the Exposure Draft. (7 marks)
Professional marks will be awarded in question 4 for the quality of the discussion. (2 marks)
