Audit-English-Case

Audit&companystrategyEnglishCaseCase.1professionalethicsRequired:(a)ListandbrieflyexplainthemainthreatstoindependenceandobjectivityasidentifiedintheACCA’sCodeofethicsandconduct(b)Brieflyexplainthefundamentalprincipleoffconfidentialityandlistthecircumstancesinwhichobligatory（强制的）andvoluntary（自愿的）disclosureofinformationmaybeapplicable.Answer:(a)threatstotheindependentandobjectivitySelf-reviewAself-reviewthreatmayoccurwhenapreviousjudgementneedstobere-valuatedbymembersresponsibleforthatjudgement.Exampleincludeprovidinginternalauditandtaxservicestoanexternalauditclient.Self-interestAself-interestthreatmayoccurasaresultofthefinancialorotherinterestsofmembersorofimmediateorclosefamilymembers.Examplesincludegiftsandhospitality（招待）andoverduefees.Advocacy过度推介Anadvocacythreatariseswhenanauditfirmpromotesapositionoropiniontothepointthatsubsequentobjectivityiscompromised.Anexamplewouldbeactingasanadvocateonbehalfofanassuranceclientinlitigationordisputewiththirdparties.FamiliarityAfamiliaritythreatariseswhen,becauseofacloserelationship,membersbecometoosympathetictotheinterestofothers.Thiscanresultinasubstantialriskoflossofprofessionalskepticism.Anexamplewouldbelongassociationwithanauditclient.Intimidation外在压力Anintimidationthreatariseswhenmembersoftheassuranceteammaybedeterredfromactingobjectivelybythreats,actualorperceived.Examplesincludefamilyandpersonalrelationships,litigationandclosebusinessrelationships.(b)Confidentiality保密ThefundamentalprincipleofconfidentialityrequiresmembersoftheACCAtorefrain(避免)fromdisclosinginformationacquiredduringthecourseofprofessionalwork.Informationmaybedisclosedwheretheclienthasgivenconsent(同意)，thereisapublicdutytodisclose,orthereisalegalorprofessionalrightordutytodisclose.Informationacquiredinthecourseofprofessionalworkmustnotbeusedforpersonaladvantageorfortheadvantageofathirdparty.Obligationdisclosure：moneylaundering洗钱、treason叛国罪、drug-trafficking贩毒、terrorism恐怕主义Voluntarydisclosure：-necessarytoprotectthemember’sinterests-disclosureiscompelled(强迫)byprocessoflaw-publicdutytodisclose-disclosureistonon-governmentalbodieswhichhavestatutorypowerstocompeldisclosure.Case2:auditreprotRequired:Describethepossibleauditreportthatcanbeissuedwherethegoingconcernstatusofacompanyiscalledintoquestion;youranswershoulddescribethecircumstancesinwhichtheycanbeissued.Answer:(1)Wheretheuseofgoingconcernassumptionisappropriatebutamaterialuncertaintyexists,providedthattheauditoragreeswiththebasisofpreparationoftheaccountsandthesituationisadequatelydisclosed,anunmodifiedopinion(无保留意见)isissued.Theauditreportwillhoweverincludeanemphasisofmatterparagraph（强调事项段）highlightingtheuncertainlytotheuserandreferringthemtothedetailsinthedisclosurenote.(2)Wherethematerialuncertaintyexistsbutthesituationisnotadequatelydisclosedtheopinionshouldbemodifiedontheroundsthatthereisinsufficientdisclosureandthefinancialstatementsaremateriallymisstated.Dependingonthespecificcircumstancesthismaybeaqualified“exceptfor”(保留意见)oradverseopinion（否定意见）(3)Iftheauditor’sjudgementthecompanywillnotbebaletocontinueasagoingconcernandthefinancialstatementshavebeenpreparedonagoingconcernbasistheauditorshallexpressanadverseopinion.(4)Iftheauditorareunabletoformanopinionbecausethewerenotabletoobtainsufficientappropriateauditevidencetheyshallissuean“exceptfor“qualifiedopinionoradisclaimer(无法表示意见).(5)Ifmanagementisunwillingtoextenditsassessmentwheretheperiodconsideredislessthantwelvemonthsfromthereportingdatatheauditorshallconsidertheneedtomodifytheopinionasaresultofnotobtainingthisevidence.Case3:non-currentassetsauditRequired:(a)Listthemainfinancialstatementsassertionstestedfornon-currentassets.(b)Explainthemainriskassociatedwiththeassertionsrelatingtonon-currentassets.(c)Listthesourceofevidenceavailabletoyoutoverifytheownershipandcostofthelandandbuildings(d)Describetheauditprocedureyouwouldperformtochecktheappropriatenessofthedepreciationratesoneachofthethreecategories(building,computerandmotorvehicles,equipment)ofnon-currentassets.Answer:(a)-completeness、existence、valuation、rightsandobligations、classificationandunderstandability(b)ExistenceThereisariskthattheassetsheldinthebooksandreportedinthefinancialstatementsarenotrepresentedbytheassetsactuallyinuseinthecompany.RightsThereisariskthatassetsarenotactuallyownedbythecompany,butarehiredorleased.ValuationThereisariskthatassetsareoverstated.Depreciationmaynothavebeenchargedcorrectly,torepresenttheusethathasbeengainedfromtheasset.(c)Ownership:Titledeeds(权利证书).Thismaybeheldatthebankortheclient’ssolicitors(律师).Itmaybepossibletoobtainconfirmationofownershipfromthecentrallandregistryoffice.Theinsurancepolicyshouldbecheckedtoseewhomthecoverisinfavourof.Cost:Thecostofthelandandbuildingcanbetracedtooriginalinvoices.Thecompanymayalsohaveretainedtheoriginalcompletiondocumentsfromthesolicitoronthepurchaseoftheland.(d)Thepurposeofdepreciationistowriteoffthecostoftheassetovertheperiodofitsusefuleconomiclife.ⅰBuildingThebuildingarebeingdepreciatedover20years.Tochecktheappropriatenessofthedepreciationrateof5%,thrauditorsh