2011 年 6 月 ACCA 考试 F8 真题
ALL FIVE questions are compulsory and MUST be attempted
1
Introduction
Tinkerbell Toys Co (Tinkerbell) is a manufacturer of children’s building block
toys; they have been trading for over 35 years and they sell to a wide variety of
customers including large and small toy retailers across the country. The company’
s year end is 31 May 2011.
The company has a large manufacturing plant, four large warehouses and a head
office. Upon manufacture, the toys are stored in one of the warehouses until they
are despatched to customers. The company does not have an internal audit department.
Sales ordering, goods despatched and invoicing
Each customer has a unique customer account number and this is used to enter
sales orders when they are received in writing from customers. The orders are entered
by an order clerk and the system automatically checks that the goods are available
and that the order will not take the customer over their credit limit. For new
customers, a sales manager completes a credit application; this is checked through
a credit agency and a credit limit entered into the system by the credit controller.
The company has a price list, which is updated twice a year. Larger customers are
entitled to a discount; this is agreed by the sales director and set up within the
customer master file.
Once the order is entered an acceptance is automatically sent to the customer
by mail/email confirming the goods ordered and a likely despatch date. The order
is then sorted by address of customer. The warehouse closest to the
customer
receives
the
order
electronically
and
a
de
spatch
list
and
sequentially
numbered
goods
despatch
notes (GDNs) are automatically generated. The warehouse team pack the goods from
the despatch list and, before they are sent out, a second member of the team double
checks the despatch list to the GDN, which accompanies the goods.
Once despatched, a copy of the GDN is sent to the accounts team at head office
and a sequentially numbered sales invoice is raised and checked to the GDN.
Periodically a computer sequence check is performed for any missing sales invoice
numbers.
Fraud
During the year a material fraud was uncovered. It involved cash/cheque receipts
from customers being diverted into employees’ personal accounts. In order to cover
up the fraud, receipts from subsequent unrelated customers would then be recorded
against the earlier outstanding receivable balances and this cycle of fraud would
continue.
The fraud occurred because two members of staff ‘who were related’ colluded.
One processed cash receipts and
prepared
the
weekly
bank
reconciliation;
the
other
employee
recorded
customer
receipts
in
the
sales
le
dger.
An unrelated sales ledger clerk was supposed to send out monthly customer
statements but this was not performed. The bank reconciliations each had a small
unreconciled amount but no-one reviewed the reconciliations after they were prepared.
The fraud was only uncovered when the two employees went on holiday at the same time
and it was discovered that cash receipts from different customers were being applied
to older receivable balances to hide the earlier sums stolen.
Required:
(a)
Recommend SIX tests of controls the auditor would normally carry out on
the sales system of Tinkerbell, and explain the objective for each
test.
(b)
Describe
substantive
procedures
the
auditor
shoul
d
perform
to
confirm
Tinkerbell’s
year-end
receivables
balance.
(c)
Identify and explain controls Tinkerbell should implement to reduce the
risk of fraud occurring again and, for each control, describe how it would mitigate
the
risk.
(d)
Describe substantive procedures the auditor should perform to confirm
Tinkerbell’s revenue.
2
(a)
Auditors are required to document their understanding of the client’
s internal controls. There are various options available for recording the internal
control system. Two of these options are narrative notes and internal control
questionnaires.
Required:
Describe
the
advantages
and
disadvantages
to
th
e
auditor
of
narrative
notes
and
internal
control
questionnaires as methods for documenting the
system.
(b)
ISA 210 Agreeing the Terms of Audit Engagements provides guidance on the
content of engagement letters and deals with the auditor’s responsibilities in
agreeing the terms of the audit engagement with management.
Required:
(i)
State the purpose of an engagement
letter.
(ii) List SIX matters that should be included within an audit engagement letter.
3
(a)
he auditor has a responsibility to design audit procedures to obtain
sufficient and appropriate evidence. There are various audit procedures for
obtaining evidence, such as external confirmation.
Required:
Apart from external confirmation:
(i)
State and explain FIVE procedures for obtaining evidence and;
(ii) For each procedure, describe an example relevant to the audit of purchases
and other expenses.
(b)
Donald Co operates an airline business. The company’s year end is 31 July
2011.
You are the audit senior and you have started planning the audit. Your manager
has asked you to have a meeting with the client and to identify any relevant audit
risks so that the audit plan can be completed. From your meeting you ascertain the
following:
In order to expand their flight network, Donald Co will need to acquire more
airplanes; they have placed orders for another six planes at an estimated total cost
of $20m and the company is not sure whether these planes will
be received by the year end. In addition the company has spent an estimated $15m
on refurbishing their existing planes. In order to fund the expansion Donald Co has
applied for a loan of $25m. It has yet to hear from the bank as to whether it will
lend them the money.
The company receives bookings from travel agents as well as directly via their
website. The travel agents are given a 90-day credit period to pay Donald Co, however,
due to difficult trading conditions a number of the receivables are struggling to
pay. The website was launched in 2010 and has consistently encountered difficulties
with customer complaints that tickets have been booked and paid for online but Donald
Co has no record of them and hence has sold the seat to another customer.
Donald Co used to sell tickets via a large call centre located near to their
head office. However, in May they closed it down and made the large workforce
redundant.
Required:
Using the information provided, describe FIVE audit risks and explain the
auditor’s response to each risk in planning the audit of Donald Co.
4
You are an audit manager in NAB & Co, a large audit firm which specialises
in the audit of retailers. The firm currently audits Goofy Co, a food retailer, but
Goofy Co’s main competitor, Mickey Co, has approached the audit firm to act as
auditors. Both companies are highly competitive and Goofy Co is concerned that if
NAB & Co audits both companies then confidential information could pass across to
Mickey Co.
Required:
(a)
Explain the safeguards that your firm should implement to ensure that this
conflict of interest is properly
managed.
Goofy Co’s year end is 31 December, which is traditionally a busy time for NAB
& Co. Goofy Co currently has an
internal
audit
department
of
five
employees
but
the
y
have
struggled
to
undertake
the
variety
and
e
xtent
of
work required by the company, hence Goofy Co is considering whether
to recruit to expand the department or to outsource
the
internal
audit
department.
If
outsourced,
Goofy
Co
would
require
a
team
to
undertake
monthly
vi
sits
to
test controls at the various shops across the country, and to
perform ad hoc operational reviews at shops and head office.
Goofy Co is considering using NAB & Co to provide the internal audit services
as well as remain as external auditors.
Required:
(b)
Discuss the advantages and disadvantages to both Goofy Co and NAB & Co
of outsourcing their internal audit
department.
(c)
The audit engagement partner for Goofy Co has been in place for
approximately six years and her son has just accepted a job offer from Goofy Co as
a sales manager; this role would entitle him to shares in Goofy Co as part of his
remuneration package. If NAB & Co is appointed as internal as well as external
auditors, then Goofy Co 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 that this will align the interests of NAB & Co and Goofy
Co.
Required:
From the information in (c) explain the ethical threats which may affect the
independence of NAB & Co in respect of the audit of Goofy Co, and for each threat
explain how it may be reduced.
5
You are the audit manager of Daffy & Co and you are briefing your team on
the approach to adopt in undertaking the review and finalisation stage of the audit.
In particular, your audit senior is unsure about the steps to take in relation to
uncorrected misstatements.
During the audit of Minnie Co the following uncorrected misstatement has been
noted.
The property balance was revalued during the year by an independent expert valuer
and an error was made in relation to the assumptions provided to the valuer.
Required:
(a)
Explain the term ‘misstatement’ and describe the auditor’s
responsibility in relation to misstatements.
(b)
Describe the factors Daffy & Co should consider when placing reliance
on the work of the independent valuer.
(c)
The following additional issues have arisen during the course of the
audit of Minnie Co. Profit before tax is $10m.
(i)
Depreciation has been calculated on the total of land and buildings.
In previous years it has only been charged on buildings. Total depreciation is $2·5m
and the element charged to land only is $0·7m.
(ii)
Minnie 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.
(iii) Minnie Co’s main competitor has filed a lawsuit for $5m against them
alleging a breach of copyright; this
case
is
ongoing
and
will
not
be
resolved
prior
to
the
audit
report
being
signed.
The
matter
is
correctly disclosed as a contingent
liability.
Required:
Discuss
each
of
these
issues
and
describe
the
impact
on
the
audit
report
if
the
above
i
ssues
remain unresolved.
Note: The mark allocation is shown against each of the three issues above. Audit
report extracts are NOT required.