（財(cái)會考證）ACCACAT考試P7高級審計(jì)與認(rèn)證業(yè)務(wù)主觀題練習(xí)

1、ACCACAT考試P7高級審計(jì)與認(rèn)證業(yè)務(wù)主觀題練習(xí)1、(c) With specific reference to Hugh Co, discuss the objective of a review engagement and contrast the level ofassurance provided with that provided in an audit of financial statements. (6 marks)2、You are the manager responsible for performing hot reviews on audit files whe

2、re there is a potential disagreementbetween your firm and the client regarding a material issue. You are reviewing the going concern section of the auditfile of Dexter Co, a client with considerable cash flow difficulties, and other, less significant operational indicators ofgoing concern problems.

3、The working papers indicate that Dexter Co is currently trying to raise finance to fundoperating cash flows, and state that if the finance is not received, there is significant doubt over the going concernstatus of the company. The working papers conclude that the going concern assumption is appropr

4、iate, but it isrecommended that the financial statements should contain a note explaining the cash flow problems faced by thecompany, along with a description of the finance being sought, and an evaluation of the going concern status of thecompany. The directors do not wish to include the note in th

5、e financial statements.Required:(b) Consider and comment on the possible reasons why the directors of Dexter Co are reluctant to provide thenote to the financial statements. (5 marks)3、(c) The OECDs Financial Action Task Force on Money Laundering (FATF) recommends preventative measures to betaken by

6、 independent legal professionals and accountants (including sole practitioners, partners and employedprofessionals within professional firms).Required:Describe FOUR measures that assist in preventing professional accountants from being used for moneylaundering purposes. (8 marks)4、Section B TWO ques

7、tions ONLY to be attempted (a) You are an audit manager in Weller & Co, an audit firm which operates as part of an international network of firms. This morning you received a note from a partner regarding a potential new audit client:I have been approached by the audit committee of the Plant Group,

8、which operates in the mobile telecommunications sector. Our firm has been invited to tender for the audit of the individual and group financial statements for the year ending 31 March 2013, and I would like your help in preparing the tender document. This would be a major new client for our firms te

9、lecoms audit department.The Plant Group comprises a parent company and six subsidiaries, one of which is located overseas. The audit committee is looking for a cost effective audit, and hopes that the strength of the Plant Groups governance and internal control mean that the audit can be conducted q

10、uickly, with a proposed deadline of 31 May 2013. The Plant Group has expanded rapidly in the last few years and significant finance was raised in July 2012 through a stock exchange listing.Required:Identify and explain the specific matters to be included in the tender document for the audit of the P

11、lant Group. (8 marks)(b) Weller & Co is facing competition from other audit firms, and the partners have been considering how the firms revenue could be increased. Two suggestions have been made: 1. Audit partners and managers can be encouraged to sell non-audit services to audit clients by includin

12、g in their remuneration package a bonus for successful sales. 2. All audit managers should suggest to their audit clients that as well as providing the external audit service, Weller & Co can provide the internal audit service as part of an extended audit service. Required: Comment on the ethical an

13、d professional issues raised by the suggestions to increase the firms revenue. (8 marks)5、(c) Comment on the matters to be considered in seeking to determine the extent of Indigo Cos financial lossresulting from the alleged fraud. (6 marks)6、(c) Pinzon, a limited liability company and audit client,

14、is threatening to sue your firm in respect of audit fees chargedfor the year ended 31 December 2004. Pinzon is alleging that Bartolome billed the full rate on air fares for auditstaff when substantial discounts had been obtained by Bartolome. (4 marks)Required:Comment on the ethical and other profes

15、sional issues raised by each of the above matters and their implications,if any, for the continuation of each assignment.NOTE: The mark allocation is shown against each of the three issues.7、You are a manager in Ryder & Co, a firm of Chartered Certified Accountants, and you have taken on the respons

16、ibility for providing support and guidance to new members of the firm. Ryder & Co has recently recruited a new audit junior, Sam Tyler, who has come across several issues in his first few months at the firm which he would like your guidance on. Sams comments and questions are shown below:(a) I know

17、that auditors are required to assess risks of material misstatement by developing an understanding of the business risks of an audit client, but I am not clear on the relationship between business risk and risk of material misstatement. Can you explain the two types of risk, and how identifying busi

18、ness risk relates to risk of material misstatement? (4 marks)(b) I worked on the interim audit of Crow Co, a manufacturing company which outsources its payroll function. I know that for Crow Co payroll is material. How does the outsourcing of payroll affect our audit planning? (4 marks)(c) Crow Co i

19、s tendering for an important contract to supply Hatfield Co. I know that Hatfield Co is also an audit client of our firm, and I have heard that Crow Cos management has requested our firm to provide advice on the tender it is preparing. What matters should our firm consider in deciding whether to pro

20、vide advice to Crow Co on the tender? (5 marks)(d) I also worked on the audit of Campbell Co, where I heard the managing director, Ting Campbell, discussing a potential new business opportunity with the audit engagement partner. Campbell Co is an events organiser, and is planning to run a programme

21、of nationwide events for accountants, at which speakers will discuss technical updates to financial reporting, tax and audit regulations. Ting proposed that our firm could invest some cash in the business opportunity, supply the speakers, market the events to our audit clients, and that any profit m

22、ade would be shared between Ryder & Co and Campbell Co. What would be the implications of our firm considering this business opportunity? (7 marks)Required:For each of the issues raised, respond to the audit junior, explaining the ethical and professional matters arising from the audit juniors comme

23、nts.Note: The split of the mark allocation is shown against each of the issues above.8、(b) Identify and explain the financial statement risks to be taken into account in planning the final audit.(12 marks)9、(c) In November 2006 Seymour announced the recall and discontinuation of a range of petcare p

24、roducts. Theproduct recall was prompted by the high level of customer returns due to claims of poor quality. For the year to30 September 2006, the product range represented $89 million of consolidated revenue (2005 $96 million)and $13 million loss before tax (2005 $04 million profit before tax). The

25、 results of the petcare operationsare disclosed separately on the face of the income statement. (6 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit

26、working papers and financial statements of Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.10、(iii) cheese. (4 marks)11、(c) Critically discuss the likely effectiveness of standard questionnaires sent to other auditors as a means ofob

27、taining information required. (5 marks)12、You are a manager in Monet & Co, a firm of accountants which has 12 offices and 30 partners, 10 of whom are members of ACCA. As an expert in ethics and professional conduct, you have been asked to advise the partners on the following issues, which were raise

28、d at a recent meeting.(a) An advertisement has been drafted as part of the firms drive to increase the number of clients. It is suggested that it should be placed in a number of quality national as well as local newspapers:(b) The planning for the audit of Renoir Cos financial statements for the yea

29、r ending 31 March 2016 will commence shortly. In preparation the audit partner telephoned Renoir Cos finance director, Jim Cassatt, to set up a planning meeting and to remind him that fees relating to a tax engagement from the previous year were still outstanding. Mr Cassatt raised concerns about th

30、e conduct of the previous audit, stating numerous examples of when he and his staff had been interrupted when they were busy. He stated that he wanted guarantees that this years audit will be more efficient, less intrusive and cheaper, otherwise he will seek an alternative auditor. (7 marks)(c) Your

31、 firm audits the publisher Homer Winslow Co. During its recent audit, the companys finance director commented on growing competition in the digital publishing sector. One rapidly expanding competitor, Pissarro Co, was specifically referred to. You are aware that your firm recently acquired another a

32、ccountancy firm, Maar Associates, and that Pissarro Co is one of their clients. It is hoped that the audit of Pissarro Co will be transferred to your department to take advantage of your specialism in media and publishing. (6 marks)Required:Evaluate each of the issues described above, commenting on

33、the ethical and professional issues raised and recommend any actions necessary in response to the issues identified.Note: The split of the mark allocation is shown against each of the issues above.13、Section A BOTH questions are compulsory and MUST be attemptedYou are an audit manager in Davies & Co

34、, responsible for the audit of Connolly Co, a listed company operating in the pharmaceutical industry. You are planning the audit of the financial statements for the year ending 31 December 2014, and the audit partner, Ali Stone, has sent you this email:Background informationConnolly Co is a pharmac

35、eutical company, developing drugs to be licensed for use around the world. Products include medicines such as tablets and medical gels and creams. Some drugs are sold over the counter at pharmacy stores, while others can only be prescribed for use by a doctor. Products are heavily advertised to supp

36、ort the companys brand names. In some countries television advertising is not allowed for prescription drugs.The market is very competitive, encouraging rapid product innovation. New products are continually in development and improvements are made to existing formulations. Four new drugs are in the

37、 research and development phase. Drugs have to meet very stringent regulatory requirements prior to being licensed for production and sale. Research and development involves human clinical trials, the results of which are scrutinised by the licensing authorities.It is common in the industry for pate

38、nts to be acquired for new drugs and patent rights are rigorously defended, sometimes resulting in legal action against potential infringement.Minutes from Ali Stones meeting with Maggie RamConnolly Co has approached its bank to extend its borrowing facilities. An extension of $10 million is being s

39、ought to its existing loan to support the on-going development of new drugs. Our firm has been asked by the bank to provide a guarantee in respect of this loan extension.In addition, the company has asked the bank to make cash of $3 million available in the event that an existing court case against

40、the company is successful. The court case is being brought by an individual who suffered severe and debilitating side effects when participating in a clinical trial in 2013.In January 2014, Connolly Co began to sell into a new market that of animal health. This has been very successful, and the sale

41、s of veterinary pharmaceuticals and grooming products for livestock and pets amount to approximately 15% of total revenue for 2014.Another success in 2014 was the acquisition of the Cold Comforts brand from a rival company. Products to alleviate the symptoms of coughs and colds are sold under this b

42、rand. The brand cost $5 million and is being amortised over an estimated useful life of 15 years.Connolly Cos accounting and management information systems are out of date. This is not considered to create any significant control deficiencies, but the company would like to develop and implement new

43、systems next year. Management has asked our firm to give advice on the new systems as they have little specialist in-house knowledge in this area.Key financial informationRequired:Respond to the email from the audit partner. (31 marks)Note: The split of marks is shown within the partners email.Profe

44、ssional marks will be awarded in question 1 for the presentation, clarity of explanations and logical flow of the answer. (4 marks)14、(ii) vehicles. (3 marks)15、(c) Identify and discuss the ethical and professional matters raised at the inventory count of LA Shots Co.(6 marks)16、Section A BOTH quest

45、ions are compulsory and MUST be attemptedYou are an audit manager in Montreal & Co, a firm of Chartered Certified Accountants, and you are responsible for the audit of the Vancouver Group (the Group). The Group operates in the supply chain management sector, offering distribution, warehousing and co

46、ntainer handling services.The Group comprises a parent company, Vancouver Co, and two subsidiaries, Toronto Co and Calgary Co. Both of the subsidiaries were acquired as wholly owned subsidiaries many years ago. Montreal & Co audits all of the individual company financial statements as well as the Gr

47、oup consolidated financial statements.You are beginning to plan the Group audit for the financial year ending 31 July 2016, and the audit engagement partner has sent you the following email:Notes from meeting with the Group finance director and audit committee representativeThe Group has not changed

48、 its operations significantly this year. However, it has completed a modernisation programme of its warehousing facilities at a cost of $25 million. The programme was financed with cash raised from two sources: $5 million was raised from a debenture issue, and $20 million from the sale of 5% of the

49、share capital of Calgary Co, with the shares being purchased by an institutional investor.An investigation into the Groups tax affairs started in January 2016. The tax authorities are investigating the possible underpayment of taxes by each of the companies in the Group, claiming that tax laws have

50、been breached. The Groups tax planning was performed by another firm of accountants, Victoria & Co, but the Groups audit committee has asked if our firm will support the Group by looking into its tax position and liaising with the tax authorities in respect of the tax investigation on its behalf. Vi

51、ctoria & Co has resigned from their engagement to provide tax advice to the Group. The matter is to be resolved by a tribunal which is scheduled to take place in September 2016.The Group audit committee has also asked whether one of Montreal & Cos audit partners can be appointed as a non-executive d

52、irector and serve on the audit committee. The audit committee lacks a financial reporting expert, and the appointment of an audit partner would bring much needed knowledge and experience.Financial information provided by the Group finance directorConsolidated statement of financial positionConsolida

53、ted statement of profit or loss for the year to 31 JulyNotes:1. Several old warehouses were modernised during the year. The modernisation involved the redesign of the layout of each warehouse, the installation of new computer systems, and the replacement of electrical systems.2. The deferred tax ass

54、et is in respect of unused tax losses (tax credits) which accumulated when Toronto Co was loss making for a period of three years from 2009 to 2012.3. The non-controlling interest has arisen on the disposal of shares in Calgary Co. On 1 January 2016, a 5% equity shareholding in Calgary Co was sold,

55、raising cash of $20 million. The profit made on the disposal is separately recognised in the Group statement of profit or loss.4. The provisions relate to onerous leases in respect of vacant properties which are surplus to the Groups requirements.Required:Respond to the instructions in the partners

56、email. (31 marks)Note: The split of the mark allocation is shown within the email.Professional marks will be awarded for presentation, logical flow, and clarity of explanations provided. (4 marks)17、Section B TWO questions ONLY to be attempted(a) According to ISA 240 The Auditors Responsibilities Re

57、lating to Fraud in an Audit of Financial Statements:When identifying and assessing the risks of material misstatement due to fraud, the auditor shall, based on a presumption that there are risks of fraud in revenue recognition, evaluate which types of revenue, revenue transactions or assertions give

58、 rise to such risks.Required:Discuss why the auditor should presume that there are risks of fraud in revenue recognition and why ISA 240 requires specific auditor responses in relation to the risks identified. (7 marks)(b) You are the manager responsible for the audit of York Co, a chain of health a

59、nd leisure clubs owned and managed by entrepreneur Phil Smith. The audit for the year ended 30 November 2015 is nearing completion and the draft financial statements recognise total assets of $27 million and profit before tax of $22 million. The audit senior has left the following file notes for you

60、r consideration during your review of the audit working papers:(i) Cash transfersDuring a review of the cash book, a receipt of $350,000 was identified which was accompanied by the description BD. Bank statements showed that the following day a nearly identical amount was transferred into a bank acc