A.Control environment
B.The information system relevant to financial reporting
C.Human resource policies and practices
D.Control activities
第1题
Required:
Identify and briefly explain the FIVE components of an entity’s internal control. (5 marks)
(b) Bonsai Trading Co (Bonsai) manufactures electrical equipment, and its year end is 30 September 2015. You are the audit supervisor of Poplar & Co and are developing the audit programmes for the forthcoming interim audit. The company’s internal audit department has provided you with documentation relating to the non-current assets cycle including the related controls listed below.
– Bonsai has a capital expenditure committee and all purchase orders for capital items are required to be authorised by this committee.
– On receipt, each asset is assigned a unique serial number and this is recorded on the asset and in the non-current assets register.
– When the asset arrives, a goods received note (GRN) is completed which details the nature of the expenditure (i.e. whether it is capital or revenue), and the GRN classification is reviewed and initialled by a responsible official. Copies of the GRNs relating to capital expenditure are then submitted to the finance department for updating of the non-current assets register.
– Periodically, internal audit undertakes a review of assets in the register and compares them to assets on site, using the serial number to confirm existence of the asset.
– Access to the non-current assets register is restricted through passwords to a small number of staff in the finance department.
Required:
Describe a test of control which the auditor of Bonsai Trading Co would perform. to assess whether or not each of the non-current asset controls listed above is operating effectively. (5 marks)
第2题
Required:
State THREE rights of an auditor, excluding those related to resignation and removal. (3 marks)
(b) ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment requires auditors to obtain an understanding of control activities relevant to the audit.
Control activities are the policies and procedures that help ensure that management directives are carried out; and which are designed to prevent and detect fraud and error occurring. An example of a control activity is the maintenance of a control account.
Required:
Apart from maintenance of a control account, explain FOUR control activities a company may undertake to prevent and detect fraud and error. (4 marks)
(c) Describe THREE limitations of external audits. (3 marks)
第3题
(a) According to ISA 240 The Auditor’s Responsibilities Relating 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 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 and 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 $2·2 million. The audit senior has left the following file notes for your consideration during your review of the audit working papers:
(i) Cash transfers
During 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 account held in a foreign country. When I asked the financial controller about this, she requested that I speak to Mr Smith, as he has sole responsibility for cash management. According to Mr Smith, an old friend of his, Brian Davies, has loaned the money to the company to fund further expansion and the money has been invested until it is needed. Documentary evidence concerning the transaction has been requested from Mr Smith but has not yet been received. (7 marks)
(ii) Legal dispute
At the year end York Co reversed a provision relating to an ongoing legal dispute with an ex-employee who was claiming $150,000 for unfair dismissal. This amount was provided in full in the financial statements for the year ended 30 November 2014 but has now been reversed because Mr Smith believes it is now likely that York Co will successfully defend the legal case. Mr Smith has not been available to discuss this matter and no additional documentary evidence has been made available since the end of the previous year’s audit. The audit report was unmodified in the previous year. (6 marks)
Required:
Evaluate the implications for the completion of the audit, recommending any further actions which should be taken by your audit firm.
Note: The split of the mark allocation is shown against each of the issues above.
第4题
(1) Analytical procedures are useful when forming an overall conclusion as to whether the financial statements are consistent with the auditor’s understanding of the company
(2) Analytical procedures can be used to obtain relevant and reliable audit evidence
(3) Analytical procedures can assist in identifying the risks of material misstatement
(4) Analytical procedures can assist in identifying unusual transactions and events
A.1 and 2
B.2 and 3
C.3 and 4
D.2 and 4
第5题
Directions: This task is the same as Task 1. The 5 questions or unfinished statements are numbered 41 through 45.
The human brain contains 10 thousand million cells and each of these may have a thousand connections. Such enormous numbers used to discourage us and cause us to dismiss the possibility of making a machine with human-like ability, but now that we have grown used to moving forward at such a pace we can be less sure. Quite soon, in only 10 or 20 years perhaps, we will be able to assemble a machine as complex as the human brain, and if we can we will. It may then take us a long time to render it intelligent by loading in the right software or by altering the architecture but that will happen, too.
I think it certain that in decades, not centuries, machines of silicon will arise first to rival and then exceed their human ancestors. Once they exceed us they will be capable of their own design. In a real sense they will be able to reproduce themselves. Silicon will have ended carbon's long control. And we will no longer be able to claim ourselves to be the finest intelligence in the known universe.
As the intelligence of robots increases to match that of humans and as their cost declines through economies of scale we may use them to expand our frontiers, first on earth through their ability to withstand environments, harmful to ourselves. Thus, deserts may bloom and the ocean beds be mined. Further ahead, by a combination of the great wealth this new age will bring and the technology it will provide, the construction of a vast, man-created world in space, home to thousands or millions of people, will be within our power.
In what way we make a machine intelligent?
A.By making it work in such environments as deserts, oceans or space.
B.By working hard for 10 or 20 years.
C.By either properly programming it or changing its structure.
D.By reproducing it.
第6题
we live on a dirty street in a shabby house among people who aren't much good. Johnny and the children can't see how pitiful it is that our neighbors have to make happiness out of this filth and dirt. My children must get on of this. But how? The money that we've saved isn't nearly enough.
The McGaritys have money, but they are show-offs with it. The McGarity girl just yesterday stood out there in the street eating from a bag of cookies while a ring of hungry children watched her. I saw those children looking at her and crying in their hearts, and when she couldn't eat any more, she threw the rest away.
Miss Jackson who teaches at the Settlement House isn't rich, but she knows things. She understands people. Her eyes look straight into yours when she talks with you. Everyone else here looks away because they're ashamed of their lives. I'd like to see the children be like Miss Jackson when they grow up.
(33)
A.Her family is extremely rich.
B.Her family is an unhappy one.
C.They are accustomed to their life.
D.They long for a change in their life.
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