ACCA对于会计职业生涯有帮助吗？

3 Susan Paullaos was recently appointed as a non-executive member of the internal audit committee of Gluck and

Goodman, a public listed company producing complex engineering products. Barney Chester, the executive finance

director who chairs the committee, has always viewed the purpose of internal audit as primarily financial in nature

and as long as financial controls are seen to be fully in place, he is less concerned with other aspects of internal

control. When Susan asked about operational controls in the production facility Barney said that these were not the

concern of the internal audit committee. This, he said, was because as long as the accounting systems and financial

controls were fully functional, all other systems may be assumed to be working correctly.

Susan, however, was concerned with the operational and quality controls in the production facility. She spoke to

production director Aaron Hardanger, and asked if he would be prepared to produce regular reports for the internal

audit committee on levels of specification compliance and other control issues. Mr Hardanger said that the internal

audit committee had always trusted him because his reputation as a manager was very good. He said that he had

never been asked to provide compliance evidence to the internal audit committee and saw no reason as to why he

should start doing so now.

At board level, the non-executive chairman, George Allejandra, said that he only instituted the internal audit committee

in the first place in order to be seen to be in compliance with the stock market’s requirement that Gluck and Goodman

should have one. He believed that internal audit committees didn’t add materially to the company. They were, he

believed, one of those ‘outrageous demands’ that regulatory authorities made without considering the consequences

in smaller companies nor the individual needs of different companies. He also complained about the need to have an

internal auditor. He said that Gluck and Goodman used to have a full time internal auditor but when he left a year

ago, he wasn’t replaced. The audit committee didn’t feel it needed an internal auditor because Barney Chester believed

that only financial control information was important and he could get that information from his management

accountant.

Susan asked Mr Allejandra if he recognised that the company was exposing itself to increased market risks by failing

to have an effective audit committee. Mr Allejandra said he didn’t know what a market risk was.

Required:

(a) Internal control and audit are considered to be important parts of sound corporate governance.

(i) Describe FIVE general objectives of internal control. (5 marks)

4 Coral is the owner and managing director of Reef Ltd. She is considering the manner in which she will make her first

pension contributions. In November 2007 she inherited her mother’s house in the country of Kalania.

The following information has been extracted from client files and from telephone conversations with Coral.

Coral:

– 1972 – Born in the country of Kalania. Her father, who died in 2002, was domiciled in Kalania.

– 1999 – Moved to the UK and has lived and worked here since then.

– 2001 – Subscribed for 100% of the ordinary share capital of Reef Ltd.

– Intends to sell Reef Ltd and return to live in the country of Kalania in 2012.

– No income apart from that received from Reef Ltd.

Reef Ltd:

– A UK resident company with annual profits chargeable to corporation tax of approximately ￡70,000.

– Four employees including Coral.

– Provides scuba diving lessons to members of the public.

Payments from Reef Ltd to Coral in 2007/08:

– Director’s fees of ￡460 per month.

– Dividends paid of ￡14,250 in June 2007 and ￡14,250 in September 2007.

Pension contributions:

– Coral has not so far made any pension contributions in the tax year 2007/08 but wishes to make gross pension

contributions of ￡9,000.

– The contributions are to be made by Reef Ltd or Coral or a combination of the two in such a way as to minimise

the total after tax cost.

– Any contributions made by Coral will be funded by an additional dividend from Reef Ltd.

House in the country of Kalania:

– Beachfront property with potential rental income of ￡550 per month after deduction of allowable expenditure.

– Coral will use it for holidays for two months each year.

The tax system in the country of Kalania:

– No capital gains tax or inheritance tax.

– Income tax at 8% on income arising in the country of Kalania.

– No double tax treaty with the UK.

Required:

(a) With the objective of minimising the total after tax cost, advise Coral as to whether the gross pension

contributions of ￡9,000 should be made:

– wholly by Reef Ltd; or

– by Coral to the extent that they are tax allowable with the balance made by Reef Ltd.

Your answer should include supporting calculations where necessary. (9 marks)

(ii) Evaluate the relative advantages and disadvantages of Chen’s risk management committee being

non-executive rather than executive in nature. (7 marks)