The Manager 16 MarchNorth Line TrainsLondonDear Sir, On 14 March, I got on the 12.45 train

(b) You are the audit manager of Johnston Co, a private company. The draft consolidated financial statements for

the year ended 31 March 2006 show profit before taxation of $10·5 million (2005 – $9·4 million) and total

assets of $55·2 million (2005 – $50·7 million).

Your firm was appointed auditor of Tiltman Co when Johnston Co acquired all the shares of Tiltman Co in March

2006. Tiltman’s draft financial statements for the year ended 31 March 2006 show profit before taxation of

$0·7 million (2005 – $1·7 million) and total assets of $16·1 million (2005 – $16·6 million). The auditor’s

report on the financial statements for the year ended 31 March 2005 was unmodified.

You are currently reviewing two matters that have been left for your attention on the audit working paper files for

the year ended 31 March 2006:

(i) In December 2004 Tiltman installed a new computer system that properly quantified an overvaluation of

inventory amounting to $2·7 million. This is being written off over three years.

(ii) In May 2006, Tiltman’s head office was relocated to Johnston’s premises as part of a restructuring.

Provisions for the resulting redundancies and non-cancellable lease payments amounting to $2·3 million

have been made in the financial statements of Tiltman for the year ended 31 March 2006.

Required:

Identify and comment on the implications of these two matters for your auditor’s reports on the financial

statements of Johnston Co and Tiltman Co for the year ended 31 March 2006. (10 marks)

From: Rita Boyle To: Jason Wright Date: March 15 Subject: New Employee Training Hi, Jason. Thanks for meeting with me last Friday despite your busy schedule. As discussed, I drew out the frist draft of the schedule for Aprils New Employee Training. Please take a moment to review the below schedule, and let me know what you and the other committee members think about it. By the way, please extend my thanks to everyone in Sydney for working on this event with us. Im especially grateful to you for offering to reserve the facilities at the Skyview Hotel. Day 1. 09: 00 A.M. C.E.O addresses and introductions in the Diamond Hall, 3 floor 10: 00 A.M. Video presentation by Human Resources Manager in the Diamond Hall 11: 00 A.M. Group meetings in the seminar rooms 1-5, 5 floor 12: 00 P.M. Lunch in the seminar rooms: Lunch boxes provided by the Hotel Day 2. 09: 00 A.M. Meeting with mentors in the Amber Room, 4 floor 11: 45 A.M. Lunch out in the nearby park(Red Deer Park) 2: 00 P.M. Lectures on teamwork building in the Diamond Hall, 3 floor Day 3. 09: 00 A.M. Presentation on company policy in the Diamond Hall, 3 floor 11: 30 A.M. Lunch in the Hotels Sapphire restaurant, 2 floor 2: 00 P.M. Final presentation in the Diamond Hall, 3 floor From: Jason Wright To: Rita Boyle Date: March 16 Re: Training Schedule Hi, Rita.Thank you for sending me the training schedule. Im afraid we have to revise the schedule slightly due to weather conditions. Below is the forecast for the days of the training, which I found on my mobile phone provided by the National Weather Institute. As you can see, the weather may pose a problem.To be safe, Ill go ahead and ask the hotel to switch the lunch venues for the second and third day. Fortunately, the final schedule wont get printed until March 25. [*]

Where will the new employees meet the Human Resources Manager？

A．Seminar room 1

B．The Sapphire restaurant

C．The Diamond Hall

D．Red Deer Park

Date: March 15 Subject: New Employee Training Hi, Jason. Thanks for meeting with me last Friday despite your busy schedule. As discussed, I drew out the frist draft of the schedule for Aprils New Employee Training. Please take a moment to review the below schedule, and let me know what you and the other committee members think about it. By the way, please extend my thanks to everyone in Sydney for working on this event with us. Im especially grateful to you for offering to reserve the facilities at the Skyview Hotel. Day 1. 09: 00 A.M. C.E.O addresses and introductions in the Diamond Hall, 3 floor 10: 00 A.M. Video presentation by Human Resources Manager in the Diamond Hall 11: 00 A.M. Group meetings in the seminar rooms 1-5, 5 floor 12: 00 P.M. Lunch in the seminar rooms: Lunch boxes provided by the Hotel Day 2. 09: 00 A.M. Meeting with mentors in the Amber Room, 4 floor 11: 45 A.M. Lunch out in the nearby park(Red Deer Park) 2: 00 P.M. Lectures on teamwork building in the Diamond Hall, 3 floor Day 3. 09: 00 A.M. Presentation on company policy in the Diamond Hall, 3 floor 11: 30 A.M. Lunch in the Hotels Sapphire restaurant, 2 floor 2: 00 P.M. Final presentation in the Diamond Hall, 3 floor From: Jason Wright＜jwright@training.au＞ To: Rita Boyle＜rboyle@training.au＞ Date: March 16 Re: Training Schedule Hi, Rita.Thank you for sending me the training schedule. Im afraid we have to revise the schedule slightly due to weather conditions. Below is the forecast for the days of the training, which I found on my mobile phone provided by the National Weather Institute. As you can see, the weather may pose a problem.To be safe, Ill go ahead and ask the hotel to switch the lunch venues for the second and third day. Fortunately, the final schedule wont get printed until March 25. [*]

Where will the new employees meet the Human Resources Manager？

A．Seminar room 1

B．The Sapphire restaurant

C．The Diamond Hall

D．Red Deer Park

To: Sales Staff

From: Robert Webster, manager of Sales

Date: March, 8, 2005

Subject: Quarterly Sales Figures

I've just seen the sales figures for the first quarter, and I'm happy to announce we're ahead of last year's figure by 10 percent! The top three sales people will be awarded, Number one will receive $300.00; Number two, $200.00, and Number three, $100.00. This great performance reflects the dedication and hard work of the entire sales staff. Let's see if we can continue the good work and beat the last year's record for the remaining three quarters.

RW: wrt

What is the announcement about？

Dear Mr.Benson,42（)of March 12.43（)the computer you bought from us arrived in such poor

Dear Mr.Benson,

42()of March 12.

43()the computer you bought from us arrived in such poor condition.It might have been damaged during shipment.

44()a new computer as soon as possible.To ensure it reaches you safely, it will be double-packed this time.

45()for the inconvenience it has caused.

Yours sincerely,

Emily Watson

Emily Watson

Customer Service Manager

(b) You are the audit manager of Petrie Co, a private company, that retails kitchen utensils. The draft financial

statements for the year ended 31 March 2007 show revenue $42·2 million (2006 – $41·8 million), profit before

taxation of $1·8 million (2006 – $2·2 million) and total assets of $30·7 million (2006 – $23·4 million).

You are currently reviewing two matters that have been left for your attention on Petrie’s audit working paper file

for the year ended 31 March 2007:

(i) Petrie’s management board decided to revalue properties for the year ended 31 March 2007 that had

previously all been measured at depreciated cost. At the balance sheet date three properties had been

revalued by a total of $1·7 million. Another nine properties have since been revalued by $5·4 million. The

remaining three properties are expected to be revalued later in 2007. (5 marks)

Required:

Identify and comment on the implications of these two matters for your auditor’s report on the financial

statements of Petrie Co for the year ended 31 March 2007.

NOTE: The mark allocation is shown against each of the matters above.

FROM: S. Banner, Industrial Cleaning, Customer Service Manager

TO: J. Choi, Kenton Office Supplies

SUBJECT: Renewal of your contract

SENT: March 13, 10:40 A.M.

Dear J. Choi,

I have recently learned that your company is not renewing its contract with us to clean your office facilities. I would like to inquire why you have decided to make this change and see if there is anything we could do to keep your business.

Sincerely,

Steve Banner

WORLD CONSTRUCTION

Bill statement

Customer name and number: Tom Morris / 36544

Date: March 10

Overdue

Materials $450.00

Labor $150.00

Tax $60.00

Total $660.00

You have to pay this expense within fifteen days of the billing date. You can pay by personal checks and credit cards, if prefered. If paying by check, make it out to WORLD CONSTRUCTION.

WORLD CONSTRUCTION

PO Box 32000 Amherst, MA 01002-5000 (413) 543-2045

Subject: Payment for construction work

To: Tom Morris (tml23@yahoo.com)

From: Allan Cooper, accounting manager (acoop@yahoo.com)

Dear Mr. Morris,

I'm writing to inform. you that our construction company, WORLD CONSTRUCTION, hasn't yet received payment for the work done on your drive way in the first week of January. You were supposed to pay this by the end of February. Our firm policy is to begin legal proceedings two months after the work has been done if your payment is not made. We haven't received payment for two months.

If you don't send payment to our account by the end of this month March 31, You will be persecuted.

Allan Cooper

Accounting Manager

What is the purpose of this e-mail？

A．To attract customers.

B．To inform. a customer of an overdue statement.

C．To inform. a customer about a big sale.

D．To apologize to a customer for a mistake.

Ryder Wholesale Medical Supplies Ltd.

To: Mr. Frank Connoirs, Security Manager

From: Mr. Victors, Security Supervisor

Date: March 15th, 2009

Subject: Incident Report—Damage to Medical Equipment

Occurrence:

Date: March 14, 2009

Time: 10 : 30 p.m.

Location: Warehouse, Ubi Road

Description: While on patrol at the equipment warehouse, I noticed that the newly arrived equipment was very wet and had been severely damaged by water leaking through the ceiling.

Immediate actions taken:

a) The affected equipment was immediately removed from the damp area and dried by using blankets.

b) I made temporary repairs to stop the water entering the ceiling.

c) The matter was reported verbally to the Warehouse Manager at 7 : 00 a. m. today.

Findings:

A small team consisting of Mr. Smith (Maintenance), Mr. Robin (Warehouse Manager), and myself (Security), investigated the damages to the warehouse roof.

It was discovered that several parts of the roof were very weak indeed and in urgent need of repair. It was also found that the weakest part of the roof appeared to be over the equipment storage area.

Conclusions:

It appeared from our observations that recent heavy rain had weakened several parts of the roof, and that this was the cause of the water entering the warehouse.

Maintenance Department has agreed to make temporary repairs to the roof to stop water from entering the warehouse and provide temporary measures to protect equipment in the warehouse.

Recommendations:

It is strongly recommended that permanent repairs be carried out on the roof so as to solve the problem of water damage to equipment.

Victors Grow

Security Supervisor

What is the main function of this passage？

A．To report an incident of damage to the security manager

B．To narrate an incident of water leakage in his company

C．To describe the damage to the medical equipment to the general manager

D．To ask the security manager to repair the medical equipment

marketing manager of the

company (MM) has decided that this is insufficient and has put a small team together to re-design the site. MM feels

that the site looks ‘amateur and old-fashioned and does not project the right image’. The board of the company has

given the go-ahead for the MM ‘to re-design the website’. The following notes summarise the outcomes of the

meetings on the website re-design. The team consists of the marketing manager (MM), a product range manager (RP),

a marketing image consultant (IC) and a technical developer (TD).

Meeting 1: 9 July attended by MM, RP, IC and TD

The need for a re-designed website to increase sales volume through the website and to ‘improve our market visibility’

was explained by MM. IC was asked to produce a draft design.

Meeting 2: 16 August attended by MM, RP, IC and TD

IC presented a draft design. MM and RP were happy with its image but not its functionality, suggesting that it was

too similar to the current site. ‘We expected it to do much more’ was their view.

Meeting 3: 4 September attended by MM, RP and IC

IC produced a re-drafted design. This overall design was agreed and the go-ahead was given for TD to produce a

prototype of the design to show to the board.

Meeting 4: 11 September attended by RP, IC and TD

TD explained that elements of the drafted re-design were not technically feasible to implement in the programming

language being used. Changes to the design were agreed at the meeting to overcome these issues and signed off by

RP.

Meeting 5: 13 October attended by MM, RP, IC and TD

The prototype re-design was demonstrated by TD. MM was unhappy with the re-design as it was ‘moving too far away

from the original objective and lacked functionality that should be there’. TD agreed to write a technical report to

explain why the original design (agreed on 4 September) could not be adhered to.

Meeting 6: 9 November attended by MM, IC and TD

It was agreed to return to the 4 September design with slight alterations to make it technically feasible. TD expressed

concerns that the suggested design would not work properly with all web browsers.

At the board meeting of 9 December the board expressed concern about the time taken to produce the re-design and

the finance director highlighted the rising costs (currently $25,000) of the project. They asked MM to produce a

formal cost-benefit of the re-design. The board were also concerned that the scope of the project, which they had felt

to be about re-design, had somehow been interpreted as including development and implementation.

On 22 December MM produced the following cost-benefit analysis of the project and confirmed that the word ‘redesignhad been interpreted as including the development and implementation of the website

On 4 January the board gave the go ahead for the development and implementation of the website with a further

budget of $25,000 and a delivery date of 1 March. TD expressed concern that he did not have enough developers

to deliver the re-designed website on time.

Meeting 7: 24 February attended by MM, RP, IC and TD

A partial prototype system was demonstrated by TD. RP felt that the functionality of the re-design was too limited and

that the software was not robust enough. It had crashed twice during the demonstration. He suggested that the

company delay the introduction of the re-designed website until it was complete and robust. MM declared this to be

impossible.

Conclusion

The re-designed website was launched on 1 March. MM declared the re-design a success that ‘had come in on time

and under budget’. On 2 and 3 March, numerous complaints were received from customers. The website was

unreliable and did not work with a particular popular web browser. On 4 March an emergency board meeting decided

to withdraw the site and reinstate the old one. On 5 March, MM resigned.

Required:

Most project management methods have an initiation or definition stage which includes the production of a document

that serves as an agreement between the sponsors and deliverers of the project. This may be called a project initiation

document or a project charter. Defining the business case is also an important part of the initiation or definition stage

of the project.

(a) Explain how a business case and a project initiation document would have helped prevent some of the

problems that emerged during the conduct of the website re-design project. (15 marks)