ACCA考试报名时间已公布，报名前贵州省考生要这么备考！

正确答案：
(b) There are several matters that Irroy will need to be aware of in relation to value added tax and corporation tax. These are set
out below.
Residence of subsidiary
Irroy will want to ensure that the subsidiary is treated as being resident in the Republic of Ireland. It will then pay corporation
tax on its profits at lower rates than in the UK. The country of incorporation usually claims taxing rights, but this is not by
itself sufficient. Irroy needs to be aware that a company can be treated as UK resident by virtue of the location of its central
management and control. This is usually defined as being where the board of directors meets to make strategic decisions. As
a result, Irroy needs to ensure that board meetings are conducted outside the UK.
If Green Limited is treated as being UK resident, it will be taxed in the UK on its worldwide income, including that arising in
the Republic of Ireland. However, as it will be conducting trading activities in the Republic of Ireland, Green Limited will also
be treated as being Irish resident as its activities in that country are likely to constitute a permanent establishment. Thus it
may also suffer tax in the Republic of Ireland as a consequence, although double tax relief will be available (see later).
A permanent establishment is broadly defined as a fixed place of business through which a business is wholly or partly carried
on. Examples of a permanent establishment include an office, factory or workshop, although certain activities (such as storage
or ancillary activities) can be excluded from the definition.
If Green Limited is treated as being an Irish resident company, any dividends paid to Aqua Limited will be taxed under
Schedule D Case V in the UK. Despite being non resident, Green Limited will still count as an associate of the existing UK
companies, and may affect the rates of tax paid by Aqua Limited and Aria Limited in the UK. However, as a non UK resident
company, Green Limited will not be able to claim losses from the UK companies by way of group relief.
Double tax relief
If Green Limited is treated as UK resident, corporation tax at UK rates will be payable on all profits earned. However, income
arising in the Republic of Ireland is likely to have been taxed in that country also by virtue of having a permanent
establishment located there. As the same profits have been taxed twice, double tax relief is available, either by reference to
the tax treaty between the UK and the Republic of Ireland, or on a unilateral basis, where the UK will give relief for the foreign
tax suffered.
If Green Limited is treated as an Irish resident company, it will pay tax in the Republic of Ireland, based on its worldwide
taxable profits. However, any repatriation of profits to the UK by dividend will be taxed on a receipts basis in the UK. Again,
double tax relief will be available as set out above.
Double tax relief is available against two types of tax. For payments made by Green Limited to Aqua Limited on which
withholding tax has been levied, credit will be given for the tax withheld. In addition, relief is available for the underlying tax
where a dividend is received from a foreign company in which Aqua Limited owns at least 10% of the voting power. The
underlying tax is the tax attributable to the relevant profits from which the dividend was paid.
Double tax relief is given at the lower rate of the UK tax and the foreign tax (withholding and underlying taxes) suffered.
Transfer pricing
Where groups have subsidiaries in other countries, they may be tempted to divert profits to subsidiaries which pay tax at lower
rates. This can be achieved by artificially changing the prices charged (known as the transfer price) between the group
companies. While they can do this commercially through common control, anti avoidance legislation seeks to correct this by
ensuring that for taxation purposes, profits on such intra-group transactions are calculated as if the transactions were carried
out on an arms length basis. Since 1 April 2004, this legislation can also be applied to transactions between UK group
companies.
If Green Limited is treated as a UK resident company, the group’s status as a small or medium sized enterprise means that
transfer pricing issues will not apply to transactions between Green Limited and the other UK group companies.
If Green Limited is an Irish resident company, transfer pricing issues will not apply to transactions between Green Ltd and the
UK resident companies because of the group’s status as a small or medium-sized enterprise and the existence of a double
tax treaty, based on the OECD model, between the UK and the Republic of Ireland.
Controlled foreign companies
Tax legislation exists to stop a UK company accumulating profits in a foreign subsidiary which is subject to a low tax rate.
Such a subsidiary is referred to as a controlled foreign company (CFC), and exists where:
(1) the company is resident outside the UK, and
(2) is controlled by a UK resident entity or persons, and
(3) pays a ‘lower level of tax’ in its country of residence.
A lower level of tax is taken to be less than 75% of the tax that would have been payable had the company been UK resident.
If Green Limited is an Irish resident company, it will be paying corporation tax at 12·5% so would appear to be caught by
the above rules and is therefore likely to be treated as a CFC.
Where a company is treated as a CFC, its profits are apportioned to UK resident companies entitled to at least 25% of its
profits. For Aqua Limited, which would own 100% of the shares in Green Limited, any profits made by Green Limited would
be apportioned to Aqua Limited as a deemed distribution. Aqua Limited would be required to self-assess this apportionment
on its tax return and pay UK tax on the deemed distribution (with credit being given for the Irish tax suffered).
There are some exemptions which if applicable the CFC legislation does not apply and no apportionments of profits will be
made. These include where chargeable profits of the CFC do not exceed ￡50,000 in an accounting period, or where the CFC
follows an acceptable distribution policy (distributing at least 90% of its chargeable profits within 18 months of the relevant
period).
Value added tax (VAT)
Green Limited will be making taxable supplies in the Republic of Ireland and thus (subject to exceeding the Irish registration
limit) liable to register for VAT there. If Green Limited is registered for VAT in the Republic of Ireland, then supplies of goods
made from the UK will be zero rated. VAT on the goods will be levied in the Republic of Ireland at a rate of 21%. Aqua Limited
will need to have proof of supply in order to apply the zero rate, and will have to issue an invoice showing Green Limited’s
Irish VAT registration number as well as its own. In the absence of such evidence/registration, Aqua Limited will have to treat
its transactions with Green Limited as domestic sales and levy VAT at the UK standard rate of 17·5%.
In addition to making its normal VAT returns, Aqua Limited will also be required to complete an EU Sales List (ESL) statement
each quarter. This provides details of the sales made to customers in the return period – in this case, Green Limited. Penalties
can be applied for inaccuracies or non-compliance.

正确答案：
(a) The correct treatment is to provide for the best estimate of the costs likely to be incurred under the warranty, as required by
IAS37 Provisions, contingent liabilities and contingent assets.

正确答案：
4 JINACK CO
(a) Auditor’s responsibilities for subsequent events
■ Auditors must consider the effect of subsequent events on:
– the financial statements;
– the auditor’s report.
■ Subsequent events are all events occurring after a period end (i.e. reporting date) i.e.:
– events after the balance sheet date (as defined in IAS 10); and
– events after the financial statements have been authorised for issue.
Events occurring up to date of auditor’s report
■ The auditor is responsible for carrying out procedures designed to obtain sufficient appropriate audit evidence that all
events up to the date of the auditor’s report that may require adjustment of, or disclosure in, the financial statements
have been identified.
■ These procedures are in addition to those applied to specific transactions occurring after the period end that provide
audit evidence of period-end account balances (e.g. inventory cut-off and receipts from trade receivables). Such
procedures should ordinarily include:
– reviewing minutes of board/audit committee meetings;
– scrutinising latest interim financial statements/budgets/cash flows, etc;
– making/extending inquiries to legal advisors on litigation matters;
– inquiring of management whether any subsequent events have occurred that might affect the financial statements
(e.g. commitments entered into).
■ When the auditor becomes aware of events that materially affect the financial statements, the auditor must consider
whether they have been properly accounted for and adequately disclosed in the financial statements.
Facts discovered after the date of the auditor’s report but before financial statements are issued
Tutorial note: After the date of the auditor’s report it is management’s responsibility to inform. the auditor of facts which
may affect the financial statements.
■ If the auditor becomes aware of such facts which may materially affect the financial statements, the auditor:
– considers whether the financial statements need amendment;
– discusses the matter with management; and
– takes appropriate action (e.g. audit any amendments to the financial statements and issue a new auditor’s report).
■ If management does not amend the financial statements (where the auditor believes they need to be amended) and the
auditor’s report has not been released to the entity, the auditor should express a qualified opinion or an adverse opinion
(as appropriate).
■ If the auditor’s report has been released to the entity, the auditor must notify those charged with governance not to issue
the financial statements (and the auditor’s report thereon) to third parties.
Tutorial note: The auditor would seek legal advice if the financial statements and auditor’s report were subsequently issued.
Facts discovered after the financial statements have been issued
■ The auditor has no obligation to make any inquiry regarding financial statements that have been issued.
■ However, if the auditor becomes aware of a fact which existed at the date of the auditor’s report and which, if known
at that date, may have caused the auditor’s report to be modified, the auditor should:
– consider whether the financial statements need revision;
– discuss the matter with management; and
– take appropriate action (e.g. issuing a new report on revised financial statements).