案例分析题5、You are a manager at Thyme Co

案例分析题It is 1 July 20X5

案例分析题You are an audit manager in Davies Co, responsible for the audit of Connolly Co, a listed company operating in the pharmaceutical industry

案例分析题5、(a) ISA 701 Communicating Key Audit Matters in the Independent Auditors Report states The purpose of communicating key audit matters is to enhance the communicative value of the auditors report by providing greater transparency about the audit that was performed. Required： Discuss this statement in relation to the benefits and difficulties of communicating key audit matters to users of the auditors report and the contribution of ISA 701 in addressing the audit expectation gap. (8 marks) (b) You are the manager responsible for the audit of the Blackmore Group (the Group), a listed manufacturer of high quality musical instruments, for the year ended 31 March 2018. The draft financial statements of the Group recognise a loss before tax of $22 million (2017 loss of $15 million) and total assets of $141 million (2017 $183 million). The audit is nearing completion and the audit senior has drafted the auditors report which contains the following extract: Required: Critically appraise the extract from the auditors report on the consolidated financial statements of the Blackmore Group for the year ended 31 March 2018. Note: You are NOT required to re-draft the extract from the auditors report. (12 marks)

案例分析题(a) You are an audit manager in Jansen Co which offers a range of audit and other assurance services to its clients. One of your audit clients is Narley Co which operates a commercial haulage company. Narley Co has been an audit client for the last five years and is currently planning a significant expansion of its operations into a new geographical area and jurisdiction. In order to finance the planned expansion, Narley Co needs funds to purchase additional heavy goods vehicles, expand its warehousing facilities and recruit more drivers. The company is also planning a major advertising and marketing campaign targeted at potential customers in the new jurisdiction. Narley Cos finance director, Suzanne Seddon, has approached you to ask if your firm will provide a report on the prospective financial information which has been prepared in support of a loan application. The application is for a new long term loan of $22 million from the companys current lender which it intends to use exclusively to finance the planned expansion. The company currently has an existing long term loan of $31 million from the same bank which is redeemable in five years time. Suzanne Seddon has provided you with the following extract from the prospective financial information which will form part of the companys loan application: Forecast statements of profit or loss Notes: 1. Revenue represents the amounts derived from the provision of haulage services to commercial customers operating principally in the retail sector. Narley Cos board of directors believes that trade in both its existing and new markets will experience significant growth over the next two years. 2. Cost of sales comprises the costs of warehousing and distribution including relevant staff costs, maintenance and repair of vehicles and depreciation of property, equipment and vehicles. 3. Administrative expenses are mainly the costs of running Narley Cos central head office facility. 4. Finance costs represent the cost of servicing long term finance from Narley Cos bankers. Required: (i) Explain the matters which should be considered by Jansen Co before accepting the engagement to review and report on Narley Cos prospective financial information. (ii) Assuming Jansen Co accepts the engagement, recommend the examination procedures to be performed in respect of Narley Cos forecast statements of profit or loss. (b) One of your colleagues at Jansen Co, Rodney Evans, has been taken ill at short notice and you have been temporarily assigned as audit manager on Watson Co, an IT consultancy company which is listed on a second tier investment market. The final audit of Watson Co for the year ended 30 June 20X8 is approaching completion and you are in the process of reviewing the audit working papers. The draft financial statements for the year recognise profit before taxation for the year of $542 million and total assets of $231 million. The audit supervisor, who is a part qualified chartered certified accountant, has sent you an email from which the following extract is taken: Its great to have you on board as I was beginning to worry that there would be no manager review of our working papers prior to the final audit clearance meeting next week. The audit assistant and myself have done our best to complete all of the audit work but we only saw Rodney on the first day of the audit about a month ago when I think he was already feeling unwell. We had a short briefing meeting with him at which he told us if in doubt, follow last years working papers. One issue which I wanted to check with you is that Watson Co has introduced a cash-settled share-based payment scheme by granting its directors share appreciation rights (SARs) for the first time this year. This was not identified at planning as a high risk area. The SARs were granted on 1 July 20X7 at which date the client obtained a valuation of the rights which was performed by an external firm of valuers. I have filed a copy of the valuation report and I have looked up the valuers online and have found a very professional looking website which confirms that they know what they are doing. The cost of the SARs scheme based on this valuation is being appropriately recognised over the three-year vesting period and a straight line expense of $195,000 has been recognised in the statement of profit or loss on this basis. A corresponding equity reserve has also been correctly recognised on the statement of financial position. The amount also seems immaterial and I cant see any need to propose any amendments to the financial statements in relation to either the amounts recognised or the disclosures made in the notes to the financial statements. Required: Comment on the quality of the planning and performance of the audit of Watson Co discussing the quality control and other professional issues raised.

案例分析题(a) You are an audit manager in Weston Co which is an international firm of Chartered Certified Accountants with branches in many countries and which offers a range of audit and assurance services to its clients

案例分析题5、You are the manager responsible for the audit of Boston Co, a producer of chocolate and confectionery. The audit of the financial statements for the year ended 31 December 2015 is nearly complete and you are reviewing the audit working papers. The financial statements recognise revenue of $76 million, profit before tax for the year of $64 million and total assets of $104 million. The summary of uncorrected misstatements included in Boston Cos audit working papers, including notes, is shown below. The audit engagement partner is holding a meeting with the management team of Boston Co next week, at which the uncorrected misstatements will be discussed. (i) During the year Boston Co impaired one of its factories. The carrying value of the assets attributable to the factory as a single, cash-generating unit totalled $36 million at the year end. The fair value less costs of disposal and the value in use were estimated to be $3 million and $35 million respectively and accordingly the asset was written down by $100,000 to reflect the impairment. Audit procedures revealed that management used growth rates attributable to the company as a whole to estimate value in use. Using growth rates attributable to the factory specifically, the audit team estimated the value in use to be $31 million. (ii) Interest charges of $75,000 relating to a loan taken out during the year to finance the construction of a new manufacturing plant were included in finance charges recognised in profit for the year. The manufacturing plant is due for completion in November 2016. (iii) One of Boston Cos largest customers, Cleveland Co, is experiencing financial difficulties. At the year end Cleveland Co owed Boston Co $100,000, against which Boston Co made a 5% specific allowance. Shortly after the year end Cleveland Co paid $30,000 of the outstanding amount due but has since experienced further problems, leading to their primary lender presenting a formal request that Cleveland Co be liquidated. If successful, only secured creditors are likely to receive any reimbursement. (iv) During the year Boston Co purchased 150,000 shares in Nebraska Co for $400 per share. Boston Co classified the investment as a financial asset held at fair value through profit or loss. On 31 December 2015, the shares of Nebraska Co were trading for $429. At the year end the carrying value of the investment in Boston Cos financial statements was $600,000. Required:

案例分析题4、You are an audit manager at Thornhill Co responsible for the audit of Northwest Co, a subsidiary of Valerian Co

案例分析题2、You are a senior manager in Macau Co, a firm of Chartered Certified Accountants

案例分析题The audit of Bradley Cos financial statements for the year ended 31 August 2014 is nearly complete, and the audit report is due to be issued next week

案例分析题4、You are a senior manager at Cobra Co, a firm of Chartered Certified Accountants

案例分析题2、You are a manager in the audit department of Pigeon Co, a firm of Chartered Certified Accountants. You are responsible for the audit of Goldfinch Gas Co, a company which is the main supplier of gas to business and residential customers across the country. The audit fieldwork for the year ended 30 June 2017 is nearing completion. The draft financial statements recognise profit before tax of $130 million (2016 $110 million), and total assets of $1,900 million (2016 $1,878 million). You are reviewing the audit files and the following matters have been noted for your attention by the audit senior: (a) Decommissioning provision A provision of $430 million (2016 $488 million) is recognised as a long-term liability. The provision is in respect of decommissioning a number of gas production and storage facilities when they are at the end of their useful lives. The estimate of the decommissioning costs has been based on price levels and technology at the reporting date, and discounted to present value using an interest rate of 8% (2016 6%). The timing of decommissioning payments is dependent on the estimated useful lives of the facilities but is expected to occur by 2046, with the majority of the provision being utilised between 2025 and 2040. The accounting policy note discusses the methodology used by management for determining the value of the decommissioning provision and states that this is an area of critical accounting judgements including key areas of estimation uncertainty. The estimate has been made by management. In previous years, a management expert was engaged to provide the estimate but as this was expensive, management decided to produce their own estimate for the year ended 30 June 2017. (10 marks) (b) Depreciation The draft statement of financial position includes plant and equipment, unrelated to gas production and storage facilities, with a carrying value of $65 million. There was a change in the estimation technique used to determine the depreciation in respect of these assets during the year. Depreciation was previously calculated on a straight line basis over a 10-year useful life, but from 1 July 2016, the useful life has been amended to 15 years. The finance director explained to the audit team that the review of estimated useful life has been made on the basis that the assets are lasting longer than originally anticipated. The change in depreciation policy has been accounted for as a prior year adjustment, resulting in an increase of $20 million to property, plant and equipment and to retained earnings. The depreciation expense recognised in draft profit for the year to 30 June 2017 is $12 million (2016 $15 million). (8 marks) (c) Trade receivables The draft statement of financial position recognises total trade receivables of $450 million (2016 $390 million). The audit team has performed substantive analytical procedures on trade receivables with the following results: Receivables from business customers are generally reviewed for impairment on an individual basis when a customer changes their gas supplier, discontinuing their relationship with the Group. Receivables from residential customers are reviewed for impairment where they are more than 90 days late in paying their bill, or where customers have a history of late payment. Since a new customer billing system was introduced in September 2016, management has exercised additional judgement regarding the appropriate level of allowance for these trade receivables. (7 marks) Required: Comment on the matters to be considered, and explain the audit evidence you should expect to find during your file review in respect of each of the issues described above. You are NOT required to explain the potential impact of the matters on the auditors opinion or report. Note: The split of the mark allocation is shown against each of the issues above.

案例分析题It is 1 July 20X5

案例分析题Section A BOTH questions are compulsory and MUST be attempted 1、You are a manager in the audit department of Dove Co, responsible for the audit of the Sunshine Hotel Group (the Group), which has a financial year ending 31 December 2017. The Group operates a chain of luxury hotels and it is planning to expand its operations over the next three years by opening hotels in countries with increasingly popular tourist destinations. You are about to start planning the Group audit for forthcoming year end, and the audit engagement partner has just sent the following email to you: Background information The Group owns 20 hotels, all located in popular beachside holiday resorts. The hotels operate on an all-inclusive basis, whereby guests can consume unlimited food and drink, and take part in a variety of water sports including scuba diving as part of the price of their holiday. Each hotel has at least four restaurants and a number of bars. The Sunshine Hotel brand is a market leader, with significant amounts spent each year on marketing to support the brand. The hotels are luxurious and maintained to a very high standard and are marketed as exclusive adult-only luxury holiday destinations. When customers book to stay in the hotel, they are charged a deposit equivalent to 20% of the total cost of their stay, and a further 20% is payable eight weeks before arrival. The remaining 60% is settled on departure. If a booking is cancelled prior to a week before a guests stay commences, then a full refund is given, but no refunds are given for cancellations within the week leading up to a guests stay. Notes from meeting with finance director and representative of Group audit committee The Group has seen continued growth, with revenue for the year to 31 December 2017 projected to be $125 million (2016 $110 million), and profit before tax projected to be $10 million (2016 $9 million). According to the latest management accounts, the Groups total assets are currently $350 million. The Sunshine Hotel brand is not recognised as an asset in the financial statements because it has been internally generated. The Group has cash of $20 million at todays date. Most of this cash is held on short-term deposit in a number of different currencies. Based on the latest management accounts, the Groups gearing ratio is 25%. In January 2017, the Group entered into an agreement with an internationally acclaimed restaurant chain, Moulin Blanche, to open new restaurants in its five most popular hotels. The agreement cost $5 million, lasts for 10 years, and allows the Group to use the restaurant name, adopt the menus and decorate the restaurants in the style of Moulin Blanche. The cost of $5 million has been recognised within marketing expenses for the year. After a period of refurbishment, the new restaurants opened in all five hotels on 1 July 2017. Part of the Group strategy is to expand into new countries, and in July 2017 the Group purchased land in three new locations in Farland at a cost of $75 million. There are currently no specific plans for the development of these locations due to political instability in the country. In addition to the Farland acquisitions, an existing hotel complex was purchased from a competitor for $23 million. The hotel complex is located in a country where local legislation prohibits private ownership and use of beaches, so the Groups hotel guests cannot enjoy the private and exclusive use of a beach which is one of the Groups key selling points. For this reason, the Group has not yet developed the hotel complex and it is currently being used as a location for staff training. All of these assets are recognised at cost as property, plant and equipment in the Group statement of financial position. Due to the problems with these recent acquisitions, the Group is planning to invest in alternative locations, with capital expenditure on sites in new locations of $45 million budgeted for 2018. This will be funded entirely from an undrawn borrowing facility with the Groups bank which has a fixed interest rate of 35% per annum. Two of the Groups hotels are located in an area prone to hurricanes, and unfortunately only last week, a hurricane caused severe damage to both of these hotels. Under the Groups hurricane guarantee scheme, customers who were staying at the hotels at the time of the hurricane were transferred to other Group hotels, at no cost to the customer. Customers with bookings to stay at the closed hotels have been offered a refund of their deposits, or to transfer their reservation to a different Group hotel, under the terms of the scheme. The hotels are closed while the necessary repair work, which will take two months, is carried out at an estimated cost of $25 million. The repair work will be covered by the Groups insurance policy, which typically pays half of the estimated cost of repair work in advance, with the balance paid when the repair work is completed. No accounting entries have been made as yet in relation to the hurricane. Extract from email from the Group finance director to John Starling, audit engagement partner Required: Respond to the instructions in the partners email. (31 marks) Professional marks to be awarded for presentation, logical flow, and clarity of explanations provided. (4 marks)

案例分析题(a) You are an audit manager in Coram Co

案例分析题(a) You are the manager responsible for the audit of Kilmister Co, a listed company specialising in the manufacture and installation of sound-proof partitions for domestic and industrial buildings

案例分析题5、(a) Discuss the three types of misstatement identified in ISA 450 Evaluation of Misstatements Identified During the Audit and comment on why it is important for the auditor to consider the type of misstatement when evaluating their effect on the financial statements and determining the further actions to be taken

案例分析题It is 1 July 20X5

案例分析题Section A BOTH questions are compulsory and MUST be attempted 1、The Bassett Group (the Group) is a publisher of newspapers and magazines, academic journals, and books. The Group, a listed entity, has a financial year ending 30 April 2018, and your firm, Whippet Co, was appointed as Group auditor in September 2017. Whippet Co will audit all Group companies with the exception of Borzoi Co, a foreign subsidiary, which is audited by a local firm of auditors, Saluki Associates. The Group aims to comply fully with relevant corporate governance requirements. You are the manager responsible for the Group audit, and the audit engagement partner has just sent the following email to you: Background information and results of analytical procedures The Group operates globally, with sales being made in over 100 countries. The Group has 20 subsidiaries which have been acquired over the last 30 years. All Group companies are located in the same country, with the exception of Borzoi Co, a foreign subsidiary whose operations focus on the translation of published content into a variety of different languages. The Groups publishing activities can be categorised into three operating segments, each of which are cash generating units for the purpose of impairment reviews: newspapers and magazines, academic journals, and books. The revenue and total assets for 2018 (projected) and 2017 (actual) for the Group in total and for each segment is as follows: During the financial year the Group has invested in software which enhances and extends the Groups range of digital publications, across all operating segments. The total investment, which is recognised as an intangible asset, was $15 million, of which $5 million relates to purchased software, and $10 million relates to internally developed software. According to management, the implementation of this software has already led to significant increases in sales of digital publications, and while this accounts for only approximately 20% of Group revenue currently, management is confident that sales of digital publications will quickly grow, and within three years is expected to overtake sales of hard copy publications across all operating segments. Using this justification, management does not consider it necessary to perform impairment reviews on any of the three operating segments this year. Information on some specific aspects of the Groups operations and the associated Group accounting policies, and information in relation to Borzoi Co, is given below: Newspapers and magazines publication rights A substantial portion of the Groups newspaper and magazine publications are protected by publication rights which protect the Groups exclusive right to publish the relevant newspaper or magazine for specified periods. The Group owns more than 200 publication rights, which range in period of exclusivity from five years to 30 years. The publication rights are recognised as an intangible asset with a carrying amount of $79 million. The Groups accounting policy is to amortise publication rights over an average period of 25 years. Books royalty advances The Group commissions authors to write books for which the Group owns the copyright. When a book is commissioned, the author is paid a royalty advance, the amount of which depends on the expected sales of the book. The Groups accounting policy is to defer the cost of the royalty advance within current assets until the book is published, at which point the cost begins to be recognised as an expense, spread over a ten-year period. The Group finance director does not have a justification for this ten-year period other than it being industry practice. The total royalty advance projected to be recognised within current assets at 30 April 2018 is $34 million. Borzoi Co Borzoi Co is located in Farland, a country which has recently experienced political unrest, leading to significant volatility in the local currency, the Oska. At todays date, the management accounts of Borzoi Co recognise total assets of 68 million Oska, and the exchange rate is 4 Oska:1$. In the last six months, the exchange rate has fluctuated between 10 Oska:1$ to 3 Oska:1$. Farland requires the use of IFRS Standards and therefore Borzoi Co prepares its financial statements using IFRS Standards as its applicable financial reporting framework. To help with the companys development of language translation operations, on 1 May 2017, Bassett Co, the parent company of the Group, transferred a piece of translation software to Borzoi Co. The software had been purchased by the parent company for $15 million several years ago and prior to transfer to Borzoi Co, it was held at a carrying amount of $1 million, this being its cost less amortisation to date. Immediately prior to being transferred to Borzoi Co, the software was revalued in the parent companys financial statements to $54 million, this being its estimated fair value at the time of the transfer. The estimate of fair value was determined by Group management, and this amount is still outstanding for payment by Borzoi Co. Communication from Grey Co The previous Group auditor, Grey Co, states the following in their communication to Whippet Co: We have acted as Group auditor for the last four years and our audit opinion has been unmodified each year. However, we would like to bring to your attention a matter relating to the Groups corporate governance arrangements. We found that on several occasions in the last year the Group CFO initially blocked our firms access to the Group audit committee, making it difficult for us to discuss matters relating to the audit with the committee. Required: Respond to the instructions in the audit engagement partners email. (31 marks) Note: The split of the mark allocation is shown within the email. Note: The split of the mark allocation is shown within the email.

案例分析题(a) Following recent changes to its International Code of Ethics for Professional Accountants (the Code), in relation to audit firms providing non assurance services to audit clients, the IESBA commented that: The performance of non assurance services may create threats to independence of the firm or members of the audit team. Such threats include self review, self interest and advocacy threats. Further if a firm were to assume a management responsibility for an audit client, the threats created would be so significant that no safeguards could reduce the threats to an acceptable level. However, there are varying views on what constitutes a management responsibility and as such it is in the public interest to enhance the clarity and guidance on this topic in the Code. Required: Discuss the changes made to the Code in relation to non-assurance services and evaluate the arguments for and against auditors providing non-assurance services to audit clients. (b) It is 1 July 20X5. You are a manager in Hunt Co, a firm which offers a range of services to audit and non audit clients. You have been asked to consider a potential engagement to review and provide a report on the prospective financial information of Waters Co, a company which has been an audit client of Hunt Co for six years. The audit of the financial statements for the year ended 31 May 20X5 has just commenced. Waters Co operates a chain of cinemas across the country. Currently its cinemas are out of date and use projectors which cannot show films made using new technology, which are becoming more popular. Management is planning to invest in all of its cinemas in order to attract more customers. The company has sufficient cash to fund half of the necessary capital expenditure, but has approached its bank with a loan application of $8 million for the remainder of the funds required. Most of the cash will be used to invest in equipment and fittings, such as new projectors and larger screens, enabling new technology films to be shown in all cinemas. The remaining cash will be used for refurbishment of the cinemas. Prior to finalising the application for the funding from the bank, the finance director has also asked if the audit engagement partner will assist him in presenting the final version of the strategic plan, in relation to the refurbishment, to the board as he knows that Hunt Co has several clients in the industry and the partner will be able to confirm that the plan is consistent with what others in the industry are doing. The draft forecast statements of profit or loss for the years ending 31 May 20X6 and 20X7 are shown below, along with the key assumptions which have been used in their preparation. The unaudited statement of profit or loss for the year ended 31 May 20X5 is also shown below. The forecast has been prepared for use by the bank in making its lending decision, and will be accompanied by other prospective financial information including a forecast statement of cash flows. Forecast statement of profit or loss Note 1: The forecast increase in revenue is based on the following assumptions: (i) All cinemas will be fitted with new projectors and larger screens to show new technology films by September 20X5. (ii) Ticket prices will increase from $750 to $10 from 1 September 20X5. Note 2: Operating expenses include mainly staff costs, depreciation of property and equipment, and repairs and maintenance to the cinemas. Required: (i) Explain the matters to be considered by Hunt Co before accepting the engagement to review and report on Waters Cos prospective financial information. (ii) Assuming the engagement is accepted, describe the examination procedures to be used in respect of the forecast statement of profit or loss. (iii) Discuss the content of the report which would be issued on the prospective financial information, explaining the level of assurance which is provided.