汇总zbf8一串讲网址电话地址市区北三环西路32号恒润国际大厦1202室

Batchcontrols

Oneforonechecking

Regularbackupofprograms

1and4

3and4

1and2

2and3

WhichTWOofthefollowingarefundamentalprinciplesasstatedintheACCA’sCodeofEthicsandConduct?

Objectivity

Independence

Confidentiality

Professionalskepticism

1and4

1and2

2and3

1and3

Auditorsusuallycarryouttheirauditworkatdifferentstagesknownastheinterimauditandthefinalaudit.

Whichofthefollowingstatements,ifany,is/arecorrect?

1Carryingouttestsofcontrolonthecompany’ssalesdaybookswouldnormallybeundertakenduringaninterimaudit.

2Reviewofagedreceivablesledgertoidentifybalancesrequiringwritedownorallowancewouldnormallybeundertakenduringafinalaudit.

Neither1nor2

Both1and2

1only

2only

Whichofthefollowingstatementsrelatetoreviewengagements?

Subjectmatterisplausible

Reasonableassurance

Nothinghascometoourattentionwhichwouldindicatethatthesubjectmattercontainsmaterialmisstatements

Positiveassurance

1and3

2and4

2and3

1and4

Whenplacingrelianceontheworkofanexpertisthefollowingstatementtrueorfalse?Inordertoplacereliance,theauditorisrequiredtoevaluatetheworkperformedbythe

expert.

True

False

Anemphasisofmatterparagraphisusedinanauditreporttodrawattentiontoamatteraffectingthefinancialstatements.

WhichTWOofthefollowingarecorrectinrelationtoanEmphasisofMatterParagraphintheAuditor’sReport?

Itisusedwhenthereisasignificantuncertainty

Itconstitutesaqualifiedauditopinion

Theauditreportisreferredtoasanunmodifiedreport

Thematterisdeemedtobefundamentaltotheusersunderstandingofthefinancialstatements

1and2

1and4

1and3

2and4

Duringtheplanningstagesofthefinalaudit,theauditorbelievesthattheprobabilityofgivinganinappropriateauditopinionistoohigh.

Howshouldtheauditoramendtheauditplantoresolvethisissue?

Increasethematerialitylevel

Decreasetheinherentrisk

Decreasethedetectionrisk

TheauditofGiggsCo’sfinancialstatementsfortheyearended31October2014hasbeencompleted;theauditreportandthefinancialstatementshavebeensignedbutnotyetissued.

ThefinancedirectorofGiggsCohasjustinformedtheauditteamthathehasreceivednotificationthatamaterialreceivablebalancehasbecomeirrecoverableandGiggsCowillnotreceiveanyoftheamountsowing.

Whatactions,ifany,shouldtheauditornowtaketosatisfytheirresponsibilitiesunderISA560SubsequentEvents?

Noactionsrequiredastheauditreportandfinancialstatementshavealreadybeensigned

Requestmanagementtoadjustthefinancialstatements,verifytheadjustmentandprovideanewauditreport

Requestmanagementtomakedisclosureofthiseventinthefinancialstatements

Requestthatmanagementadjustforthiseventinthefollowingyear’sfinancialstatementsasitoccurredinyearending31October2015.

ISA315IdentifyingandAssessingtheRisksofMaterialMisstatementthroughUnderstandingtheEntityandItsEnvironmentsetsoutthefivecomponentsofinternalcontrol.

WhichofthefollowingisNOTsetoutasacomponentofinternalcontrolwithinISA315?

Controlenvironment

Theinformationsystemrelevanttofinancialreporting

Humanresourcepoliciesandpractices

Answers

1.B

Thedescriptionsarecorrectbutrelatetoalternativesamplingmethods.AismonetaryunitsamplingandCisblockselectionmethodofsampling.

2.D

Auditevidenceisoftendescribedintermsofthedegreeofreliability.Thirdpartyasmostreliablefollowedbyauditorgenerated,companydocumentationandleastreliableverbalevidence.

3.A

Bisincorrectasexternalauditorsalonewouldrequestbankconfirmationletters,thisisnotsomethingtheywouldexpectinternalaudittoperform.Cisincorrectsinceinternalauditwouldnotretaintheirindependenceiftheyimplementedaccountingpackages;theirroleistoreviewhowthepackageoperatesonceimplemented.Disincorrectasinternalauditshouldnothelppreparefinancialstatements.

4.D

Thecontrolsgivenat1and4areincorrectastheyaregeneralITcontrolsthatrelatetomanyapplicationsandsupporttheoverallITsystem.

5.D

Professionalskepticismreferstothestateofmindtheauditorshouldmaintainwhilstconductingtheaudit.Withregardstoindependencethereisanoverridingrequirementtobeindependentratherthanitbeingaspecificprinciple.

6.B

Testsofcontrolaretypicallyundertakenattheinterimauditstage.Reviewingtheagedreceivableswouldbeundertakenontheyearendbalancesandhenceatthefinalaudit.

7.A

Statements2and4areincorrectastheyrelatetothelevelofassuranceprovidedbyanexternalauditratherthanareviewengagement.

8.A

Theauditorcanonlyrelyontheworkundertakenbyanexpertifthishasbeenevaluated.

9.B

Statement2isincorrectsinceanemphasisofmatterdoesnotresultinaqualifiedopinion.Statement3isincorrectasanemphasisofmatterresultsinthereportbeingmodifiedbuttheopinionisunqualified.

10.C

Itisinappropriatetoadjustmaterialitylevelstodetermineauditrisk.Inherentriskisnotundertheauditor’scontrol.Auditriskdependsoninherentrisk,controlriskanddetectionrisk.Onlydetectionriskcanbechangedbytheauditortoreduceauditrisk.

11.B

Aisincorrectaseventhoughthefinancialstatementshavebeensignedtheauditorhasanon-goingresponsibility.Cisincorrectasthisisanadjustingeventandsomustbeadjustedforasopposedtojustdisclosed.Disincorrectastheeventrequiresadjustmentinthecurrentyearfinancialstatementseventhoughitoccurredinyearending31October2015.

12.C

Humanresourcepoliciesandpracticesisanelementofacontrolenvironmentwhichisitselfacomponentofinternalcontrol.

串讲2

WhichTWOofthefollowingshouldbeincludedinanauditengagementletter?

Objectiveandscopeoftheaudit

Resultsofpreviousaudits

Management’sresponsibilities

Needtomaintainprofessionalscepticism

A1and2

B1and3

C2and4

D3and4

(2marks)

AuditorshaveaprofessionaldutyofconfidentialityunderACCA’sCodeofEthicsandConduct;voluntarydisclosureof

informationmaybenecessaryincertainsituations.

ForwhichTWOofthefollowingsituationsshouldanauditormakeVOLUNTARYdisclosure?

Ifanauditorknowsorsuspectshisclientisengagedinmoneylaundering

Wheredisclosureismadetonon-governmentalbodies

Whereitisinthepublicinteresttodisclose

IfanauditorsuspectshisclienthascommittedterroristoffencesA1and4

B1and3

C2and4

D2and3

(2marks)

ISA580WrittenRepresentationsrequireauditorstoobtainwrittenrepresentationstosupportotherevidence.

ForwhichofthefollowingmatterswouldawrittenrepresentationNOTbesuitableasauditevidence?

AThatalldeficienciesininternalcontrolknowntomanagementhavebeencommunicatedtotheauditor

BThatsubsequenteventsrequiringadjustmentordisclosureinthefinancialstatementshavebeendealtwith

appropriately

CThatthepayrollchargeforthreemonthsoftheyearwhentheaccountingrecordswereunavailableiscorrectly

stated

DThatmanagementhasfulfilledtheirresponsibilityforthepreparationandpresentationofthefinancialstatements

(2marks)

2

WhichTWOofthefollowingsubstantiveproceduresprovideevidenceovertheEXISTENCEoftradereceivables?

Agreeingasampleofgoodsdespatchednotestosalesinvoicesandtothesalesledger

Undertakingareceivablescircularisation

Reviewofpostyear-endcashreceipts,iftheserelatetoyear-endreceivablesfollowthroughtothesalesledger

Recalculatingtheallowanceforuncollectibleaccounts

A1and3

B2and4

C2and3

D1and4

(2marks)

WhichofthefollowingisNOTaresponsibilityoftheauditor?

AToprovideanopiniononthetruthandfairnessofthefinancialstatements

BToconductanauditinaccordancewithInternationalStandardsonAuditing

CToexpressanopiniononthecompany’sgoingconcernstatus(1mark)

WhichofthefollowingproceduresareTESTSOFCONTROLanauditorshouldperformintestingtheinventory

cycleoftheirclientwhilstattendingtheinventorycount?

Observewhethertheclient’sstaffarefollowingtheinventorycountinstructions

Reviewinventorypresentinthewarehouseforevidenceofdamageorobsolescence

Obtainasampleofthelastgoodsreceivednotesandgoodsdespatchednotesandfollowthroughtoensure

inclusioninthecorrectaccountingperiod

Inspectandreviewmanagement’sinventorycountinstructions

A2and3

B1and4

C1and2

D3and4

(2marks)

WhichofthefollowingisNOTanadvantageofacompanyoutsourcingitsinternalauditfunction?

ATherewillalwaysbeareductionincosts

BProvidesaccesstospecialistskills

CCanprovideaccesstoaninternalauditteamimmediately(1mark)

3[P.T.O.

WhichofthefollowingisNOTanauditsoftwaretechnique?

AUsingcomputerprogramstoextractasampleforareceivablescircularisation

BRunningacomputerprogramtotesttheadditionofthecashbook

CUsingacomputertoperformananalyticalreviewcomparisonofadministrationexpensesagainsttheprioryear

DEnteringasampleofdummysalesordersthroughthecomputersystemwhichtakescustomersovertheircredit

limittoensurethesystemrejectstheorders(2marks)

WhichofthefollowingisaDISADVANTAGEofrecordingaccountingandcontrolsystemsusinginternalcontrol

questionnaires?

ATheymaycontainalargenumberofirrelevantcontrols

BItcanbedifficulttoidentifymissingcontrols

CTheyaretimeconsumingtocomplete(1mark)

Whichofthefollowingstatements,ifany,is/arecorrect?

Internalauditorsshouldreporttothefinancedirectorastheyunderstandinternalcontrolsandarebestplacedto

implementanyrecommendationsinatimelymanner

Companiesarenotrequiredtoestablishandmaintainaninternalauditfunction

A1only

B2only

CBoth1and2

DNeither1nor2

(2marks)

Isthefollowingstatementtrueorfalse?

Auditriskisafunctionoftwocomponents,inherentriskandcontrolrisk.

ATrue

BFalse(1mark)

Whichofthefollowingstatements,relatingtotheauditor’sreportingresponsibilitiesforgoingconcern,ifany,

is/arecorrect?

Wheremanagementisunwillingtomaketheirassessmentofthecompany’sabilitytocontinueasagoing

concern,theauditorshouldincludeanemphasisofmatterparagraphintheauditreport

Wheretheuseofthegoingconcernassumptionisinappropriate,theauditorshouldincludeaqualifiedopinion

intheauditreport

A1only

B2only

CBoth1and2

DNeither1nor2

(2marks)Answers

1.B

Resultsofpreviousauditsandtheneedtomaintainprofessionalscepticismshouldbeincludedinanauditstrategyasopposedtoanauditengagementletter.

2.D

Inthecaseofsituations1and4,theauditorhasanobligationtodisclosedetailsoftheirclients’affairstothirdparties.Situations2and3areoneswherevoluntarydisclosureshouldbemade.

3.C

Whentheaccountingrecordsareunavailable,itisnotacceptabletoobtainawrittenrepresentationasthisrepresentsaninabilitytoobtainsufficientandappropriateauditevidenceandifmaterialwouldresultinamodifiedauditreport.

4.C

Substantiveprocedure1providesevidenceovertheassertionofcompletenessasthedirectionofthetestisfromsourcedocumentstoaccountingrecords.Substantiveprocedure4providesevidenceovervaluationandallocationratherthanexistence.

5.C

Auditorsdonothavearesponsibilitytoformallyreportonthegoingconcernstatus.ISA570GoingConcernrequiresauditorstoobtainsufficientappropriateauditevidenceabouttheappropriatenessofmanagement’suseofthegoingconcernassumptionin

thepreparationofthefinancialstatementsandtoconcludewhetherthereisamaterialuncertaintyabouttheentity’sabilitytocontinueasagoingconcern.

6.B

Procedures2and3aresubstantiveproceduresratherthantestsofcontrol.

7.A

Costsmayreduceiftheinternalauditfunctionisoutsourced;however,thiswouldnotalwaysbethecaseasredundanciesofthecompany’sexistinginternalauditfunctionmayincreasetheoverallcosts.

8.D

Enteringdummydataintothecompany’sowncomputersystemisatestdatatechniqueasitinvolvestheuseofthecompany’ssystemratherthantheauditor’sowncomputerprograms.

9.A

Internalcontrolquestionnairescansometimescontainalargenumberofirrelevantcontrols;hencethisisadisadvantage.BrelatestodisadvantagesofusingnarrativenotesandCisincorrectasquestionnairesarequicktoprepare.

10.B

Statement1isnotcorrectasinternalaudit(IA)shouldnotreporttothefinancedirectorasthiswouldimpactontheirindependence.SomeoftheinternalcontrolsandfunctionsIAreviewaretheresponsibilityofthefinancedirectorandtheymaynotactonanyrecommendationswhichappeartocriticisetheirdepartment.Statement2iscorrectascompaniesarenotrequiredtoimplementandmaintainanIAfunction.CorporategovernanceprinciplesrecommendthatlistedcompaniesmaintainanIAfunctionandannuallyconsidertheneedforsuchafunction;however,theydonotrequireit.

11.B

Auditriskismadeupoftwocomponentsbeingriskofmaterialmisstatement;inherentriskandcontrolriskandalsotheriskthattheauditorwillnotdetectmaterialmisstatementsbeingdetectionrisk.

12.D

Ifmanagementareunwillingtomaketheirassessmentofgoingconcernthiswouldresultinamodifiedopinionwithaqualifiedordisclaimeropinion.Ifthegoingconcernbasisisnotappropriate,thenanadverseopinionshouldbeprovidedratherthanaqualifiedopinionasthematterismaterialandpervasive.

串讲3

Whichofthefollowingauditproceduresforobtainingauditevidenceiscorrectlydescribed?ARecalculationinvolvestheauditor’sindependentexecutionofproceduresorcontrolswhichwereoriginally

performedaspartoftheentity’sinternalcontrol

Confirmationconsistsofseekinginformationofknowledgeablepersons,withinthecompanyoroutsidethe

company

Reperformanceconsistsofcheckingthemathematicalaccuracyofdocumentsorrecords

DObservationconsistsoflookingataprocedureorprocessbeingperformedbyothers(2marks)

Auditorsarerequiredtoundertakeanoverallreviewofthefinancialstatementsasthefinalstepbeforetheyformtheir

auditopinion.Aspartofthisprocesstheyundertakeanumberofprocedures.

WhichofthefollowingprocedureswouldanauditorNOTundertakeaspartoftheoverallreviewofthefinancial

statements?

AReviewingthefinancialstatementstoensuretheyareconsistentwiththeauditor’sknowledgeofthebusiness

andtheresultsoftheirauditwork

Performinganalyticalproceduresonthefinancialstatementstoformanoverallconclusiononthefinancial

statements

Undertakingareviewofsubsequenteventstoidentifywhetheranyadjustmentordisclosureisrequiredinthe

financialstatements

DReviewingthefinancialstatementstoensurecompliancewithaccountingstandardsandlocallegislation

disclosure(2marks)

WhichofthefollowingisNOTaninherentlimitationofinternalcontrolsystems?

AInsufficientsegregationofduties

BPossibilitythatemployeesmaycolludetogetherfraudulently

CPossibilityofhumanerrorinundertakingtasks(1mark)

Whichofthefollowingstatements,relatingtoInternationalStandardsonAuditing(ISAs),ifany,is/arecorrect?

InternationalStandardsonAuditing(ISAs)areissuedbytheInternationalAccountingStandardsBoard(IASB)

andprovideguidanceontheperformanceandconductofanaudit

IntheeventthatISAsdifferfromlocallegislationinaspecificcountry,auditorsmustcomplywiththe

requirementsoftheISAs

A1only

B2only

CBoth1and2

DNeither1nor2

(2marks)

2

WhichTWOofthefollowingstatementsregardingtheuseofanalyticalproceduresduring

thePLANNINGstageoftheauditarecorrect?

Analyticalproceduresareusefulwhenforminganoverallconclusionastowhetherthefinancialstatementsare

consistentwiththeauditor’sunderstandingofthecompany

Analyticalprocedurescanbeusedtoobtainrelevantandreliableauditevidence

Analyticalprocedurescanassistinidentifyingtherisksofmaterialmisstatement

Analyticalprocedurescanassistinidentifyingunusualtransactionsandevents

A1and2

B2and3

C3and4

D2and4

(2marks)

WhichofthefollowingsubstantiveproceduresprovidesevidenceovertheCOMPLETENESSofnon-current

assets?

ASelectasampleofassetsincludedinthenon-currentassetregisterandphysicallyverifythemattheclient

premises

BReviewtherepairsandmaintenanceexpenseaccounttoidentifyanyitemsofacapitalnature

CForassetsdisposedof,agreethesaleproceedstosupportingdocumentationandcashbook

(1mark)

WhichofthefollowingisNOTaprincipleoftheUKCorporateGovernanceCode?

AThereshouldbearigorousandtransparentprocedurefortheappointmentofnewdirectorstotheboard

BTheboardshouldusetheannualgeneralmeeting(AGM)tocommunicatewithinvestors

CThenon-executivechairmanshoulddecideontheremunerationofalldirectors

DAlldirectorsshouldreceiveinductiontrainingonjoiningtheboard(2marks)

Whichofthefollowingisasubstantiveauditprocedureforwagesandsalaries?

AInspectasampleofclockcardsforevidenceofauthorisationbyaresponsibleofficial

BRecalculateasampleofpayrolldeductionssuchasemploymenttaxestoconfirmaccuracy

CAttempttoaccessandmakechangestothepayrollmasterfileusingthelogonforajuniorclerk

(1mark)

3[P.T.O.

Whichofthefollowingstatements,relatingtotheauditor’sresponsibilitiesregardingsubsequentevents,ifany,

is/arecorrect?

Auditorsdonothavearesponsibilitytoperformprocedurestoidentifysubsequenteventsafterthedateofthe

auditor’sreport

Whereamaterialadjustingsubsequenteventisidentifiedafterthefinancialstatementsareissued,butpriorto

approvalbytheshareholders,theauditorshouldincludeaqualifiedopinionintheirauditreportifmanagement

refusestoadjustthefinancialstatementsfortheevent

A1only

B2only

CBoth1and2

DNeither1nor2

(2marks)

Isthefollowingstatementtrueorfalse?

Asignificantchangeintheownershipofanexistingauditclientisafactorwhichmakesitappropriatefortheauditor

toreviewthetermsofengagement.

ATrue

BFalse(1mark)

Whichofthefollowingstatementsrelatingtointernalandexternalauditorsiscorrect?

AInternalauditorsarerequiredtobemembersofaprofessionalbody

BInternalauditors’scopeofworkshouldbedeterminedbythosechargedwithgovernance

CExternalauditorsreporttothosechargedwithgovernance

DInternalauditorscanneverbeindependentofthecompany(2marks)

WhichTWOofthefollowingcontrolsofasalessystemensurethatallgoodsdespatchedarecompletelyand

accuratelyinvoiced?

Gooddespatchednotesarematchedtosalesinvoices

Salesinvoicesaresequentiallynumbered

Salesinvoicesarematchedtocustomerorders

Regularreviewofunfulfilledorders

A1and2

B2and4

C2and3

D1and4

(2marks)

(20marks)

Answers

1.D

AuditprocedureAdescribesreperformance,BisdescribinginquiryratherthanconfirmationandprocedureCisdescribingrecalculation.

2.C

ProceduresA,BandDwouldbeundertakenaspartoftheoverallreviewofthefinancialstatements.However,procedureCisundertakenwhenreviewingsubsequenteventsoccurringbetweenthedateofthefinancialstatementsandthedateoftheauditor’sreport.

3.A

Aisincorrectasitisnotaninherentlimitationofaninternalcontrolsystem;ratheritisaninternalcontroldeficiency.

4.D

Statement1isincorrectasISAsareissuedbytheInternationalAuditingandAssuranceStandardsBoardratherthantheIASBwhoissueaccountingstandards.Statement2isincorrectasISAsdonotoverridelocallegislation.

5.C

Statement1referstotheuseofanalyticalproceduresatthefinalrevieworcompletionstageoftheaudit.Statement2referstotheuseofanalyticalprocedurestoobtainsubstantiveevidenceduringthefieldworkstageoftheaudit.

6.B

ProcedureAgivesassuranceoverexistenceandprocedureCverifiesvaluationratherthancompleteness.

7.C

CisincorrectastheUKCorporateGovernanceCodestatesthatnodirectorshouldbeinvolvedinsettingtheirownremuneration.Hencethenon-executivechairmancannotsethisownremuneration.

8.B

AandCareincorrectastheyaretestsofcontrolforthepayrollcycleratherthansubstantiveprocedures.

9.A

Statement2isnotcorrectasifaneventoccursafterthefinancialstatementsareissued,theauditorhasalreadysignedtheauditreportandsoisnotabletonowincludeaqualifiedopinion.

10.A

Wherethereisasignificantchangeinownershipofthecompany,ISA210AgreeingtheTermsofAuditEngagementsrecommendsthatanewauditengagementletterissenttoavoidmisunderstandings.

11.B

Aisincorrectasinternalauditorsarenotrequiredtobemembersofanyprofessionalbody.

Cisincorrectasexternalauditorsreport

toshareholdersratherthanthosechargedwithgovernance.Disincorrectasinternalauditorscanbeindependentofthecompany,

if,forexample,theinternalauditfunctionhasbeenoutsourced.

12.D

Sequentialnumberingofinvoicesconfirmsthecompletenessofsalesinvoices,however,itdoesnotgiveassurancethatallgoods

despatchedareinvoiced.Agreeinginvoicesbacktoordersdoesnotconfirmthatthegoodshaveactuallybeendespatchedyet.

串讲4

TheauditengagementpartnerforHazardCo(Hazard),alistedcompany,hasbeeninplaceforapproximatelysixyearsandhersonhasjustacceptedajobofferfromHazardasasalesmanager.ThisrolewouldentitlehimtosharesinHazardaspartofhisremunerationpackage.

Hazard’sdirectorsareconsideringestablishinganinternalauditdepartment,andthefinancedirectorhasaskedtheauditfirm,Remy&Coaboutthedifferencesbetweeninternalauditandexternalaudit.

Iftheinternalauditdepartmentisestablished,andRemy&Coisappointedasinternalaswellasexternalauditors,thenHazardhassuggestedthattheexternalauditfeeshouldberenegotiatedwithatleast20%ofthefeebeingbasedontheprofitaftertaxofthecompanyastheyfeelthiswillaligntheinterestsofRemy&CoandHazard.

Required:

Usingtheinformationabove:

ExplaintheethicalthreatswhichmayaffecttheindependenceofRemy&Coinrespectoftheauditof

HazardCo;and(3marks)

Afamiliaritythreatariseswhereanengagementpartnerisassociatedwithaclientforalongperiodoftime.

Remy’spartnerhasbeeninvolvedintheauditofHazardCoforsixyearsandhencemaynotmaintainherprofessionalskepticismandobjectivity.

Remy&Coshouldmonitortherelationshipbetweenengagementandclientstaff,andshouldconsiderrotatingengagementpartnerswhenalongassociationhasoccurred.

Inaddition,ACCA’sCodeofEthicsandConductrecommendsthatengagementpartnersrotateoffanauditafterfiveyearsforlistedandpublicinterestentities.Thereforeconsiderationshouldbegiventoappointinganalternativeauditpartner.

Foreachthreatexplainhowitmightbereducedtoanacceptablelevel.(3marks)Ethicalthreat Managingrisk

Theengagementpartner’ssonhasacceptedajobasasalesmanageratHazardCo.

This could represent a self-interest/familiaritythreatifthesonwasinvolvedinthefinancialstatementprocess.Aself-interestthreatcanarisewhenanauditfirmhasafinancialinterestinthecompany.Inthiscasethepartner’ssonwillreceivesharesaspartofhisremuneration.Asthesonisanimmediatefamilymemberofthepartnerthenifheholdsthesharesitwillbeasifthepartnerholdstheseshares,andthisisprohibited.

Aself-reviewthreatcanarisewhenanauditfirmprovidesaninternalauditservicetoanauditclient.

FeesbasedontheoutcomeorresultsofworkperformedareknownascontingentfeesandareprohibitedbyACCA’sCodeofEthicsandConduct.

HenceHazard’srequestthat20%oftheexternalauditfeeisbasedonprofitaftertaxwouldrepresentacontingentfee.

Itisunlikelythatasasalesmanagerthesonwouldbeinapositiontoinfluencethefinancialstatementsandhenceadditionalsafeguardswouldnotbenecessary.

Ifitwasbelievedthatadditionalsafeguardswererequiredthenconsiderationshouldbegiventoappointinganalternativeauditpartner.

InthiscaseasholdingsharesisprohibitedbyACCA’sCodeofEthicsandConducttheneitherthesonshouldrefusethesharesormorelikelytheengagementpartnerwillneedtoberemovedfromtheaudit.

Remy&Coshouldhaveappropriatesafeguardsbyensuringtheauditteamisnotinvolvedintheinternalauditserviceandalsoensuringclientstaffremainresponsiblefortheinternalauditactivitiesandapprovealltheworkdone.

Remy&CowillnotbeabletoacceptcontingentfeesandshouldcommunicatetoHazardthattheexternalauditfeeneedstobebasedonthetimespentandlevelofworkperformed

串讲5

YouareanauditseniorofBeech&CoandhavebeenallocatedtotheauditofWillowWandsCo(Willow),alistedcompanywhichhasbeenanauditclientforeightyearsandspecialisesinmanufacturingmusicalinstruments.

BethanOakwastheauditengagementpartnerforWillowandasshehadcompletedsevenyearsastheauditengagementpartner,shehasrecentlybeenrotatedofftheauditengagement.Thecurrentauditpartner,SandeepPine,hassuggestedthatin

ordertomaintainacloserelationshipwithWillow,Bethanshouldundertaketheroleofindependentreviewpartnerthisyear.InadditionWillowhasrequestedthatBethanassistthembyattendingtheirauditcommitteemeetings,asanon-executivedirectorhasrecentlyleftthecompany.

WillowhasalsoaskedSandeepandtheotherpartnersatBeech&Cotohelptheminrecruitinganewnon-executivedirector.

ThetotalfeesreceivedbyBeech&Coforlastyearequatedto16%ofthefirm’stotalfeeincome.Thecurrentyear’sauditfeehasnotyetbeenconfirmed,butalongwithtaxationandotherpossiblenon-auditfeesthetotalincomefromWillowthisyearcouldbegreaterthanforlastyear.Lastyear’sauditfeewasbeingpaidmonthlybyWillowbutnopaymentshavebeenmadeforthelastthreemonths.

TheauditmanagerforWillowhasjustannouncedthatheisleavingBeech&CotojoinWillowasthefinancialcontroller.

Required:

Usingtheinformationabove:

IdentifyandexplainFIVEe