ACCA官方样题 F4(ENG) F8

　　ACCA官方样题 F4(ENG) F8 Audit and Assurance 2014
　　
　　1 Which of the following sampling methods correctly describes systematic sampling?
　　
　　A A sampling method which is a type of value-weighted selection in which sample size, selection and evaluation
　　
　　results in a conclusion in monetary amounts
　　
　　B A sampling method which involves having a constant sampling interval, the starting point for testing is
　　
　　determined randomly
　　
　　C A sampling method in which the auditor selects a block(s) of contiguous items from within the population
　　
　　(1 mark)
　　
　　2 An audit junior has been assigned to the audit of bank and cash balances of Howard Co. He has obtained the
　　
　　following audit evidence:
　　
　　1 Bank reconciliation carried out by the cashier
　　
　　2 Bank confirmation report from Howard’s bankers
　　
　　3 Verbal confirmation from the directors that the overdraft limit is to be increased
　　
　　4 Cash count carried out by the audit junior
　　
　　What is the order of reliability of the audit evidence starting with the most reliable first?
　　
　　A 4, 2, 1 and 3
　　
　　B 2, 1, 4 and 3
　　
　　C 4, 3, 2 and 1
　　
　　D 2, 4, 1 and 3
　　
　　3 Fellaini Co operate a large department store and have a large internal audit department in place. The management of
　　
　　Fellaini Co are keen to increase the range of assignments that internal audit undertake.
　　
　　Which of the following assignments could the internal audit department of Fellaini Co be asked to perform by
　　
　　management?
　　
　　A Internal audit department members could undertake ‘mystery shopper’ reviews, where they enter the store as a
　　
　　customer, purchase goods and rate the overall shopping experience
　　
　　B Internal audit could be asked to assist the external auditors by requesting bank confirmation letters
　　
　　C Internal audit could be asked to implement a new payroll package for the payroll department
　　
　　D Internal audit could be asked to assist the finance department with the preparation of the year end financial
　　
　　statements.
　　
　　(2 marks)
　　
　　4 Application controls are manual or automated procedures that operate over accounting applications to ensure that all
　　
　　transactions are complete and accurate
　　
　　Which TWO of the following are application controls?
　　
　　1 Password protection of programs
　　
　　2 Batch controls
　　
　　3 One for one checking
　　
　　4 Regular back up of programs
　　
　　A 1 and 4
　　
　　B 3 and 4
　　
　　C 1 and 2
　　
　　D 2 and 3
　　
　　(2 marks)
　　
　　5 Which TWO of the following are fundamental principles as stated in the ACCA’s Code of Ethics and Conduct?
　　
　　1 Objectivity
　　
　　2 Independence
　　
　　3 Confidentiality
　　
　　4 Professional skepticism
　　
　　A 1 and 4
　　
　　B 1 and 2
　　
　　C 2 and 3
　　
　　D 1 and 3
　　
　　(2 marks)
　　
　　6 Auditors usually carry out their audit work at different stages known as the interim audit and the final audit.
　　
　　Which of the following statements, if any, is/are correct?
　　
　　1 Carrying out tests of control on the company’s sales day books would normally be undertaken during an interim
　　
　　audit.
　　
　　2 Review of aged receivables ledger to identify balances requiring write down or allowance would normally be
　　
　　undertaken during a final audit.
　　
　　A Neither 1 nor 2
　　
　　B Both 1 and 2
　　
　　C 1 only
　　
　　D 2 only
　　
　　(2 marks)
　　
　　7 [P.T.O.7 Which of the following statements relate to review engagements?
　　
　　1 Subject matter is plausible
　　
　　2 Reasonable assurance
　　
　　3 Nothing has come to our attention which would indicate that the subject matter contains material misstatements
　　
　　4 Positive assurance
　　
　　A 1 and 3
　　
　　B 2 and 4
　　
　　C 2 and 3
　　
　　D 1 and 4
　　
　　(2 marks)
　　
　　8 When placing reliance on the work of an expert is the following statement true or false?
　　
　　In order to place reliance, the auditor is required to evaluate the work performed by the expert.
　　
　　A True
　　
　　B False
　　
　　(1 mark)
　　
　　9 An emphasis of matter paragraph is used in an audit report to draw attention to a matter affecting the financial
　　
　　statements.
　　
　　Which TWO of the following are correct in relation to an Emphasis of Matter Paragraph in the Auditor’s Report?
　　
　　1 It is used when there is a significant uncertainty
　　
　　2 It constitutes a qualified audit opinion
　　
　　3 The audit report is referred to as an unmodified report
　　
　　4 The matter is deemed to be fundamental to the users understanding of the financial statements
　　
　　A 1 and 2
　　
　　B 1 and 4
　　
　　C 1 and 3
　　
　　D 2 and 4
　　
　　(2 marks)
　　
　　10 During the planning stages of the final audit, the auditor believes that the probability of giving an inappropriate audit
　　
　　opinion is too high.
　　
　　How should the auditor amend the audit plan to resolve this issue?
　　
　　A Increase the materiality level
　　
　　B Decrease the inherent risk
　　
　　C Decrease the detection risk
　　
　　(1 mark)
　　
　　11 The audit of Giggs Co’s financial statements for the year ended 31 October 2014 has been completed; the audit report
　　
　　and the financial statements have been signed but not yet issued.
　　
　　The finance director of Giggs Co has just informed the audit team that he has received notification that a material
　　
　　receivable balance has become irrecoverable and Giggs Co will not receive any of the amounts owing.
　　
　　What actions, if any, should the auditor now take to satisfy their responsibilities under ISA 560 Subsequent
　　
　　Events?
　　
　　A No actions required as the audit report and financial statements have already been signed
　　
　　B Request management to adjust the financial statements, verify the adjustment and provide a new audit report
　　
　　C Request management to make disclosure of this event in the financial statements
　　
　　D Request that management adjust for this event in the following year’s financial statements as it occurred in year
　　
　　ending 31 October 2015.
　　
　　(2 marks)
　　
　　12 ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its
　　
　　Environment sets out the five components of internal control.
　　
　　Which of the following is NOT set out as a component of internal control within ISA 315?
　　
　　A Control environment
　　
　　B The information system relevant to financial reporting
　　
　　C Human resource policies and practices
　　
　　(1 mark)
　　
　　13 [P.T.O.Section B – ALL SIX questions are compulsory and MUST be attempted
　　
　　1 The audit engagement partner for Hazard Co (Hazard), a listed company, has been in place for approximately six years
　　
　　and her son has just accepted a job offer from Hazard as a sales manager. This role would entitle him to shares in
　　
　　Hazard as part of his remuneration package.
　　
　　Hazard’s directors are considering establishing an internal audit department, and the finance director has asked the
　　
　　audit firm, Remy & Co about the differences between internal audit and external audit.
　　
　　If the internal audit department is established, and Remy & Co is appointed as internal as well as external auditors,
　　
　　then Hazard has suggested that the external audit fee should be renegotiated with at least 20% of the fee being based
　　
　　on the profit after tax of the company as they feel this will align the interests of Remy & Co and Hazard.
　　
　　Required:
　　
　　(a) Using the information above:
　　
　　(i) Explain the ethical threats which may affect the independence of Remy & Co in respect of the audit of
　　
　　Hazard Co; and (3 marks)
　　
　　(ii) For each threat explain how it might be reduced to an acceptable level. (3 marks)
　　
　　(b) Distinguish between internal and external audit. (4 marks)
　　
　　(10 marks)
　　
　　2 (a) Auditors are required to obtain sufficient appropriate audit evidence. Tests of control and substantive procedures
　　
　　can be used to obtain such evidence.
　　
　　Required:
　　
　　Define a ‘test of control’ and a ‘substantive procedure’. (2 marks)
　　
　　(b) Balotelli Beach Hotel Co (Balotelli) operates a hotel providing accommodation, leisure facilities and restaurants.
　　
　　Its year end was 31 October 2014. You are the audit senior of Mario & Co and are currently preparing the audit
　　
　　programmes for the year end audit of Balotelli. You are reviewing the notes of last week’s meeting between the
　　
　　audit manager and finance director where two material issues were discussed.
　　
　　Depreciation
　　
　　Balotelli 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
　　
　　Balotelli’s directors received correspondence in September 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. Balotelli’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)
　　
　　(10 marks)
　　
　　63 (a) You are the audit manager of Savage & Co and you are briefing your team on the approach to adopt in
　　
　　undertaking the review and finalisation stage of the audit. In particular, the audit senior is unsure about the steps
　　
　　to take in relation to uncorrected misstatements.
　　
　　Required:
　　
　　Describe the auditor’s responsibility in respect of misstatements. (2 marks)
　　
　　(b) You are the audit manager of Villa & Co and you are currently reviewing the audit files for several of your clients
　　
　　for which the audit fieldwork is complete. The audit seniors have raised the following issues:
　　
　　Czech Co
　　
　　Czech Co is a pharmaceutical company and has incurred research expenditure of $2·1m and development
　　
　　expenditure of $3·2m during the year, this has all been capitalised as an intangible asset. Profit before tax is
　　
　　$26·3m.
　　
　　Dawson Co
　　
　　Dawson Co’s computerised wages program is backed up daily, however for a period of two months the wages
　　
　　records and the back-ups have been corrupted, and therefore cannot be accessed. Wages and salaries for these
　　
　　two months are $1·1m. Profit before tax is $10m.
　　
　　Required:
　　
　　For each of the clients above:
　　
　　(i) Discuss the issue, including an assessment of whether it is material; and (4 marks)
　　
　　(ii) Describe the impact on the audit report if the issue remains unresolved. (4 marks)
　　
　　(10 marks)
　　
　　4 (a) Explain FOUR financial statement assertions relevant to account balances at the period end. (4 marks)
　　
　　(b) Torres Leisure Club Co (Torres) operates a chain of health and fitness clubs. Its year end was 31 October 2014.
　　
　　You are the audit manager and the year-end audit is due to commence shortly. The following matter has been
　　
　　brought to your attention. Torres’s trade receivables have historically been low as most members pay monthly in
　　
　　advance. However during the year a number of companies have taken up group memberships at Torres and
　　
　　hence the receivables balance is now material. The audit senior has undertaken a receivables circularisation for
　　
　　the balances at the year end; however, there are a number who have not responded and a number of responses
　　
　　with differences.
　　
　　Required:
　　
　　Describe substantive procedures you would perform to obtain sufficient and appropriate audit evidence in
　　
　　relation to Torres’s trade receivables. (6 marks)
　　
　　(10 marks)
　　
　　7 [P.T.O.5 You are the audit senior of Holtby & Co and are planning the audit of Walters Co (Walters) for the year ended
　　
　　31 December 2014. The company produces printers and has been a client of your firm for two years; your audit
　　
　　manager has already had a planning meeting with the finance director. He has provided you with the following notes
　　
　　of his meeting and financial statement extracts.
　　
　　Walters’s management were disappointed with the 2013 results and so in 2014 undertook a number of strategies to
　　
　　improve the trading results. This included the introduction of a generous sales-related bonus scheme for their
　　
　　salesmen and a high profile advertising campaign. In addition, as market conditions are difficult for their customers,
　　
　　they have extended the credit period given to them.
　　
　　The finance director of Walters has reviewed the inventory valuation policy and has included additional overheads
　　
　　incurred this year as he considers them to be production related.
　　
　　The finance director has calculated a few key ratios for Walters; the gross profit margin has increased from 44·4% to
　　
　　52·2% and receivables days have increased from 61 days to 71 days. He is happy with the 2014 results and feels
　　
　　that they are a good reflection of the improved trading levels.
　　
　　Financial statement extracts for year ended 31 December
　　
　　DRAFT ACTUAL
　　
　　2014 2013
　　
　　$m $m
　　
　　Revenue 23·0 18·0
　　
　　Cost of sales (11·0) (10·0)
　　
　　––––– –––––
　　
　　Gross profit 12·0 8·0
　　
　　Operating expenses (7·5) (4·0)
　　
　　––––– –––––
　　
　　Profit before interest and taxation 4·5 4·0
　　
　　––––– –––––
　　
　　Inventory 2·1 1·6
　　
　　Receivables 4·5 3·0
　　
　　Cash – 2·3
　　
　　Trade payables 1·6 1·2
　　
　　Overdraft 0·9 –
　　
　　Required:
　　
　　(a) Using the information above:
　　
　　(i) Calculate an additional THREE ratios, for BOTH years, which would assist the audit senior in planning
　　
　　the audit; and (3 marks)
　　
　　(ii) From a review of the above information and the ratios calculated, describe SIX audit risks and explain
　　
　　the auditor’s response to each risk in planning the audit of Walters Co. (12 marks)
　　
　　(b) Describe the procedures that the auditor of Walters Co should perform in assessing whether or not the
　　
　　company is a going concern. (5 marks)
　　
　　(20 marks)
　　
　　86 Garcia International Co (Garcia) is a manufacturer of electrical equipment. It has factories across the country and its
　　
　　customer base includes retailers as well as individuals, to whom direct sales are made through their website. The
　　
　　company’s year end is 30 September 2014. You are an audit supervisor of Suarez & Co and are currently reviewing
　　
　　documentation of Garcia’s internal control in preparation for the interim audit.
　　
　　Garcia’s website allows individuals to order goods directly, and full payment is taken in advance. Currently the website
　　
　　is not integrated into the inventory system and inventory levels are not checked at the time when orders are placed.
　　
　　Inventory is valued at the lower of cost and net realisable value.
　　
　　Goods are despatched via local couriers; however, they do not always record customer signatures as proof that the
　　
　　customer has received the goods. Over the past 12 months there have been customer complaints about the delay
　　
　　between sales orders and receipt of goods. Garcia has investigated these and found that, in each case, the sales order
　　
　　had been entered into the sales system correctly but was not forwarded to the despatch department for fulfilling.
　　
　　Garcia’s retail customers undergo credit checks prior to being accepted and credit limits are set accordingly by sales
　　
　　ledger clerks. These customers place their orders through one of the sales team, who decides on sales discount levels.
　　
　　Raw materials used in the manufacturing process are purchased from a wide range of suppliers. As a result of staff
　　
　　changes in the purchase ledger department, supplier statement reconciliations are no longer performed. Additionally,
　　
　　changes to supplier details in the purchase ledger master file can be undertaken by purchase ledger clerks as well as
　　
　　supervisors.
　　
　　In the past six months Garcia has changed part of its manufacturing process and as a result some new equipment
　　
　　has been purchased, however, there are considerable levels of plant and equipment which are now surplus to
　　
　　requirement. Purchase requisitions for all new equipment have been authorised by production supervisors and little
　　
　　has been done to reduce the surplus of old equipment.
　　
　　Required:
　　
　　(a) In respect of the internal control of Garcia International Co:
　　
　　(i) Identify and explain SIX deficiencies;
　　
　　(ii) Recommend a control to address each of these deficiencies; and
　　
　　(iii) Describe a test of control Suarez & Co would perform to assess if each of these controls is operating
　　
　　effectively.
　　
　　Note: The total marks will be split equally between each part (18 marks)
　　
　　(b) Describe substantive procedures Suarez & Co should perform at the year end to confirm plant and equipment
　　
　　additions. (2 marks)
　　
　　(20 marks)
　　
　　End of Question Paper
　　
　　9AnswersFundamentals Level – Skills Module, Paper F8
　　
　　Audit and Assurance Specimen Exam Answers
　　
　　Section A
　　
　　Question Answer See Note
　　
　　1 B 1
　　
　　2 D 2
　　
　　3 A 3
　　
　　4 D 4
　　
　　5 D 5
　　
　　6 B 6
　　
　　7 A 7
　　
　　8 A 8
　　
　　9 B 9
　　
　　10 C 10
　　
　　11 B 11
　　
　　12 C 12