Sunflower Stores Co (Sunflower) operates 25 food s...

第1题

（a) Auditors have a responsibility under ISA 265 Communicating Deficiencies in Internal Co

(a) Auditors have a responsibility under ISA 265 Communicating Deficiencies in Internal Control to those Charged with Governance and Management, to communicate deficiencies in internal controls. In particular SIGNIFICANT deficiencies in internal controls must be communicated in writing to those charged with governance.

Required:

Explain examples of matters the auditor should consider in determining whether a deficiency in internal controls is significant. (5 marks)

Greystone Co is a retailer of ladies clothing and accessories. It operates in many countries around the world and has expanded steadily from its base in Europe. Its main market is aimed at 15 to 35 year olds and its prices are mid to low range. The company’s year end was 30 September 2010.

In the past the company has bulk ordered its clothing and accessories twice a year. However, if their goods failed to meet the key fashion trends then this resulted in significant inventory write downs. As a result of this the company has recently introduced a just in time ordering system. The fashion buyers make an assessment nine months in advance as to what the key trends are likely to be, these goods are sourced from their suppliers but only limited numbers are initially ordered.

Greystone Co has an internal audit department but at present their only role is to perform. regular inventory counts at the stores.

Ordering process

Each country has a purchasing manager who decides on the initial inventory levels for each store, this is not done in conjunction with store or sales managers. These quantities are communicated to the central buying department at the head office in Europe. An ordering clerk amalgamates all country orders by specified regions of countries, such as Central Europe and North America, and passes them to the purchasing director to review and authorise.

As the goods are sold, it is the store manager’s responsibility to re-order the goods through the purchasing manager; they are prompted weekly to review inventory levels as although the goods are just in time, it can still take up to four weeks for goods to be received in store.

It is not possible to order goods from other branches of stores as all ordering must be undertaken through the purchasing manager. If a customer requests an item of clothing, which is unavailable in a particular store, then the customer is provided with other branch telephone numbers or recommended to try the company website.

Goods received and Invoicing

To speed up the ordering to receipt of goods cycle, the goods are delivered directly from the suppliers to the individual stores. On receipt of goods the quantities received are checked by a sales assistant against the supplier’s delivery note, and then the assistant produces a goods received note (GRN). This is done at quiet times of the day so as to maximise sales. The checked GRNs are sent to head office for matching with purchase invoices.

As purchase invoices are received they are manually matched to GRNs from the stores, this can be a very time consuming process as some suppliers may have delivered to over 500 stores. Once the invoice has been agreed then it is sent to the purchasing director for authorisation. It is at this stage that the invoice is entered onto the purchase ledger.

Required:

(b) As the external auditors of Greystone Co, write a report to management in respect of the purchasing system which:

(i) Identifies and explains FOUR deficiencies in that system;

(ii) Explains the possible implication of each deficiency;

(iii) Provides a recommendation to address each deficiency.

A covering letter is required.

Note: Up to two marks will be awarded within this requirement for presentation. (14 marks)

(c) Describe substantive procedures the auditor should perform. on the year-end trade payables of Greystone Co. (5 marks)

(d) Describe additional assignments that the internal audit department of Greystone Co could be asked to perform. by those charged with governance. (6 marks)

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第2题

You are the audit supervisor of Seagull & Co and are currently planning the audit of y

our existing client, Eagle Heating Co (Eagle), for the year ending 31 December 2014. Eagle manufactures and sells heating and plumbing equipment to a number of home improvement stores across the country.

Eagle has experienced increased competition and as a result, in order to maintain its current levels of sales, it has decreased the selling price of its products significantly since September 2014. The finance director has informed your audit manager that he expects increased inventory levels at the year end. He also notified your manager that one of Eagle’s key customers has been experiencing financial difficulties. Therefore, Eagle has agreed that the customer can take a six-month payment break, after which payments will continue as normal. The finance director does not believe that any allowance is required against this receivable.

In October 2014 the financial controller of Eagle was dismissed. He had been employed by the company for over 20 years, and he has threatened to sue the company for unfair dismissal. The role of financial controller has not yet been filled and so his tasks have been shared between the existing finance department team. In addition, the purchase ledger supervisor left in August and a replacement has been appointed in the last week. However, for this period no supplier statement reconciliations or purchase ledger control account reconciliations were performed.

You have undertaken a preliminary analytical review of the draft year to date statement of profit or loss, and you are surprised to see a significant fall in administration expenses.

Required:

Explain FIVE audit risks, and the auditor’s response to each risk, in planning the audit of Eagle Heating Co.

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第3题

Strom Co is a clothing retailer, with stores selling mid-price clothes and clothing access

ories throughout Europe. It sells its own-brand items, which are produced by small manufacturers located in Africa, who work solely for Strom Co. The recent European sovereign debt crisis has affected a number of countries in the European Union (EU). Consequently, Strom Co has found trading conditions to be extremely difficult, putting pressure on profits and sales revenue.

The sovereign debt crisis in Europe resulted in countries finding it increasingly difficult and expensive to issue government bonds to raise funds. Two main reasons have been put forward to explain why the crisis took place: firstly, a number of countries continued to borrow excessive funds, because their expenditure exceeded taxation revenues; and secondly, a number of countries allocated significant sums of money to support their banks following the ‘credit crunch’ and the banking crisis.

In order to prevent countries defaulting on their debt obligations and being downgraded, the countries in the EU and the International Monetary Fund (IMF) established a fund to provide financial support to member states threatened by the risk of default, credit downgrades and excessive borrowing yields. Strict economic conditions known as austerity measures were imposed on these countries in exchange for receiving financial support.

The austerity measures have affected Strom Co negatively, and the years 2011 and 2012 have been particularly bad, with sales revenue declining by 15% and profits by 25% in 2011, and remaining at 2011 levels in 2012. On investigation, Strom Co noted that clothing retailers selling clothes at low prices and at high prices were not affected as badly as Strom Co or other mid-price retailers. Indeed, the retailers selling low-priced clothes had increased their profits, and retailers selling luxury, expensive clothes had maintained their profits over the last two to three years.

In order to improve profitability, Strom Co’s board of directors expects to cut costs where possible. A significant fixed cost relates to quality control, which includes monitoring the working conditions of employees of Strom Co’s clothing manufacturers, as part of its ethical commitment.

Required:

(a) Explain the role and aims of the International Monetary Fund (IMF) and discuss possible reasons why the austerity measures imposed on European Union (EU) countries might have affected Strom Co negatively. (10 marks)

(b) Suggest, giving reasons, why the austerity measures might not have affected clothing retailers at the high and low price range, as much as the mid-price range retailers like Strom Co. (4 marks)

(c) Discuss the risks to Strom Co of reducing the costs relating to quality control and how the detrimental impact of such reductions in costs could be decreased. (6 marks)

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第4题

My wife and I moved into our home nine years ago. We have a yard and a "rock garden&q

uot;. Therethe rocks appear to be just thrown up onto the dirt as if someone were in a hurry, to finish. Very oftenwhen we have more flowers, Denise or I would plant them between the rocks,just to add some colorto the area.

Last summer I found, in the rock garden, a tiny little plant that I could not immediatelyrecognize. I knew I didn&39; t plant it and Denise said she didn&39; t either. We decided to let it continuegrowing until we could find out what it was.

Weeks passed and as I made my way back to the strange plant, it appeared to&39;be a sunflower. Itlooked thin and tall with only one head on it. I decided to baby it along and weed(除草) around it.As I pulled rocks from the area to get to the weeds, I noticed something unusual. The sunflower hadnot started where I saw it begin. It actually had begun under a big rock and grown under and around it to reach the sun.

If a tiny little sunflower didn&39; t let a big rock stand in its way of developing, we too have theability to do the same thing. If we believe in ourselves like that little sunflower, we can reach wherewe aim to go and get what we need for growth.

We need to believe in ourselves knowing we have the ability to achieve our goals. Like thesunflower, it knew it had the ability to get over the rocks because it had faith in itself that it wouldsucceed. Stand tall like the sunflower and be proud of who and what we are,then other things will beginto support us. We will find a way to go under or around any "rocks" in order to realize our goals.

Why did the family plant flowers in the "rock garden"？

A.To attract visitors.

B.To remove the rocks.

C.To please their neighbors.

D.To make the area colorful.

The author let the tiny plant continue growingA.to see how long it could live

B.to see how big it could grow

C.to find out what it actually was

D.to know if his wife had planted it

Why did the author think the sunflower was unusual？A.It was very thin and tall.

B.It had only one head on it.

C.It grew on top of a big rock.

D.It began to grow under a rock.

What does the author want to say through the story？A.Rocks cannot prevent us from success.

B.Sunflowers are able to grow everywhere.

C.We should take good care of the rock gardens.

D.We can get over difficulties if we trust ourselves.

请帮忙给出每个问题的正确答案和分析，谢谢！

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第5题

Introduction and client backgroundYou are an audit senior in Staple and Co and you are com

Introduction and client background

You are an audit senior in Staple and Co and you are commencing the planning of the audit of Smoothbrush Paints Co for the year ending 31 August 2010.

Smoothbrush Paints Co is a paint manufacturer and has been trading for over 50 years, it operates from one central site, which includes the production facility, warehouse and administration ffices.

Smoothbrush sells all of its goods to large home improvement stores, with 60% being to one large chain store Homewares. The company has a one year contract to be the sole supplier of paint to Homewares. It secured the contract through signifi cantly reducing prices and offering a four-month credit period, the company’s normal credit period is one month.

Goods in/purchases

In recent years, Smoothbrush has reduced the level of goods directly manufactured and instead started to import paint from South Asia. Approximately 60% is imported and 40% manufactured. Within the production facility is a large amount of old plant and equipment that is now redundant and has minimal scrap value. Purchase orders for overseas paint are made six months in advance and goods can be in transit for up to two months. Smoothbrush accounts for the inventory when it receives the goods.

To avoid the disruption of a year end inventory count, Smoothbrush has this year introduced a continuous/perpetual inventory counting system. The warehouse has been divided into 12 areas and these are each to be counted once over the year. The counting team includes a member of the internal audit department and a warehouse staff member. The following procedures have been adopted;

1. The team prints the inventory quantities and descriptions from the system and these records are then compared to the inventory physically present.

2. Any discrepancies in relation to quantities are noted on the inventory sheets, including any items not listed on the sheets but present in the warehouse area.

3. Any damaged or old items are noted and they are removed from the inventory sheets.

4. The sheets are then passed to the fi nance department for adjustments to be made to the records when the count has fi nished.

5. During the counts there will continue to be inventory movements with goods arriving and leaving the warehouse.

At the year end it is proposed that the inventory will be based on the underlying records. Traditionally Smoothbrush has maintained an inventory provision based on 1% of the inventory value, but management feels that as inventory is being reviewed more regularly it no longer needs this provision.

Finance Director

In May 2010 Smoothbrush had a dispute with its fi nance director (FD) and he immediately left the company. The company has temporarily asked the fi nancial controller to take over the role while they recruit a permanent replacement. The old FD has notifi ed Smoothbrush that he intends to sue for unfair dismissal. The company is not proposing to make any provision or disclosures for this, as they are confi dent the claim has no merit.

Required:

(a) Identify and explain the audit risks identifi ed at the planning stage of the audit of Smoothbrush Paints Co. (10 marks)

(b) Discuss the importance of assessing risks at the planning stage of an audit. (4 marks)

(c) List and explain suitable controls that should operate over the continuous/perpetual inventory counting system, to ensure the completeness and accuracy of the existing inventory records at Smoothbrush Paints Co. (10 marks)

(d) Describe THREE substantive procedures the auditor of Smoothbrush Paints Co should perform. at the year end in confi rming each of the following:

(i) The valuation of inventory; (3 marks)

(ii) The completeness of provisions or contingent liabilities. (3 marks)

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第6题

Department stores in London are very large. They are called department stores because

they have many _________ departments.

A、delicious

B、different

C、domestic

D、delighted

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第7题

About ten years ago,we shopped only at local stores in the market place () cash.

A.used

B.using

C.to use

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第8题

Public interest lawyers serve ______.A．only stores and landlordsB．criminals onlyC．people w

Public interest lawyers serve ______.

A．only stores and landlords

B．criminals only

C．people who can pay high fees

D．people who can pay little or nothing

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第9题

ipod的渠道通路不包括（)。A、Apple专卖店B、零售商店C、网上销售D、iTunes stores

ipod的渠道通路不包括()。

A、Apple专卖店

B、零售商店

C、网上销售

D、iTunes stores

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第10题

Part I （Para1-2): The quotations the widow stores in a notebook remind her of the pain

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Sunflower Stores Co （Sunflower) operates 25 food supermarkets. The company’s year end is 3