注意！你有听说acca有审计签名权吗？

正确答案：
(b) Tiltman Co
Tiltman’s total assets at 31 March 2006 represent 29% (16·1/55·2 × 100) of Johnston’s total assets. The subsidiary is
therefore material to Johnston’s consolidated financial statements.
Tutorial note: Tiltman’s profit for the year is not relevant as the acquisition took place just before the year end and will
therefore have no impact on the consolidated income statement. Calculations of the effect on consolidated profit before
taxation are therefore inappropriate and will not be awarded marks.
(i) Inventory overvaluation
This should have been written off to the income statement in the year to 31 March 2005 and not spread over three
years (contrary to IAS 2 ‘Inventories’).
At 31 March 2006 inventory is overvalued by $0·9m. This represents all Tiltmans’s profit for the year and 5·6% of
total assets and is material. At 31 March 2005 inventory was materially overvalued by $1·8m ($1·7m reported profit
should have been a $0·1m loss).
Tutorial note: 1/3 of the overvaluation was written off in the prior period (i.e. year to 31 March 2005) instead of $2·7m.
That the prior period’s auditor’s report was unmodified means that the previous auditor concurred with an incorrect
accounting treatment (or otherwise gave an inappropriate audit opinion).
As the matter is material a prior period adjustment is required (IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors’). $1·8m should be written off against opening reserves (i.e. restated as at 1 April 2005).
(ii) Restructuring provision
$2·3m expense has been charged to Tiltman’s profit and loss in arriving at a draft profit of $0·7m. This is very material.
(The provision represents 14·3% of Tiltman’s total assets and is material to the balance sheet date also.)
The provision for redundancies and onerous contracts should not have been made for the year ended 31 March 2006
unless there was a constructive obligation at the balance sheet date (IAS 37 ‘Provisions, Contingent Liabilities and
Contingent Assets’). So, unless the main features of the restructuring plan had been announced to those affected (i.e.
redundancy notifications issued to employees), the provision should be reversed. However, it should then be disclosed
as a non-adjusting post balance sheet event (IAS 10 ‘Events After the Balance Sheet Date’).
Given the short time (less than one month) between acquisition and the balance sheet it is very possible that a
constructive obligation does not arise at the balance sheet date. The relocation in May was only part of a restructuring
(and could be the first evidence that Johnston’s management has started to implement a restructuring plan).
There is a risk that goodwill on consolidation of Tiltman may be overstated in Johnston’s consolidated financial
statements. To avoid the $2·3 expense having a significant effect on post-acquisition profit (which may be negligible
due to the short time between acquisition and year end), Johnston may have recognised it as a liability in the
determination of goodwill on acquisition.
However, the execution of Tiltman’s restructuring plan, though made for the year ended 31 March 2006, was conditional
upon its acquisition by Johnston. It does not therefore represent, immediately before the business combination, a
present obligation of Johnston. Nor is it a contingent liability of Johnston immediately before the combination. Therefore
Johnston cannot recognise a liability for Tiltman’s restructuring plans as part of allocating the cost of the combination
(IFRS 3 ‘Business Combinations’).
Tiltman’s auditor’s report
The following adjustments are required to the financial statements:
■ restructuring provision, $2·3m, eliminated;
■ adequate disclosure of relocation as a non-adjusting post balance sheet event;
■ current period inventory written down by $0·9m;
■ prior period inventory (and reserves) written down by $1·8m.
Profit for the year to 31 March 2006 should be $3·9m ($0·7 + $0·9 + $2·3).
If all these adjustments are made the auditor’s report should be unmodified. Otherwise, the auditor’s report should be
qualified ‘except for’ on grounds of disagreement. If none of the adjustments are made, the qualification should still be
‘except for’ as the matters are not pervasive.
Johnston’s auditor’s report
If Tiltman’s auditor’s report is unmodified (because the required adjustments are made) the auditor’s report of Johnston
should be similarly unmodified. As Tiltman is wholly-owned by Johnston there should be no problem getting the
adjustments made.
If no adjustments were made in Tiltman’s financial statements, adjustments could be made on consolidation, if
necessary, to avoid modification of the auditor’s report on Johnston’s financial statements.
The effect of these adjustments on Tiltman’s net assets is an increase of $1·4m. Goodwill arising on consolidation (if
any) would be reduced by $1·4m. The reduction in consolidated total assets required ($0·9m + $1·4m) is therefore
the same as the reduction in consolidated total liabilities (i.e. $2·3m). $2·3m is material (4·2% consolidated total
assets). If Tiltman’s financial statements are not adjusted and no adjustments are made on consolidation, the
consolidated financial position (balance sheet) should be qualified ‘except for’. The results of operations (i.e. profit for
the period) should be unqualified (if permitted in the jurisdiction in which Johnston reports).
Adjustment in respect of the inventory valuation may not be required as Johnston should have consolidated inventory
at fair value on acquisition. In this case, consolidated total liabilities should be reduced by $2·3m and goodwill arising
on consolidation (if any) reduced by $2·3m.
Tutorial note: The effect of any possible goodwill impairment has been ignored as the subsidiary has only just been
acquired and the balance sheet date is very close to the date of acquisition.

正确答案：

3 ALBREDA CO

(a) Cessation of ‘home delivery’ service
(i) Matters
■ $0·6 million represents 1·4% of reported revenue (prior year 1·9%) and is therefore material.
Tutorial note: However, it is clearly not of such significance that it should raise any doubts whatsoever regarding
the going concern assumption. (On the contrary, as revenue from this service has declined since last year.)
■ The home delivery service is not a component of Albreda and its cessation does not classify as a discontinued
operation (IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’).
? It is not a cash-generating unit because home delivery revenues are not independent of other revenues
generated by the restaurant kitchens.
? 1·4% of revenue is not a ‘major line of business’.
? Home delivery does not cover a separate geographical area (but many areas around the numerous
restaurants).
■ The redundancy provision of $0·2 million represents 11·1% of profit before tax (10% before allowing for the
provision) and is therefore material. However, it represents only 0·6% of total assets and is therefore immaterial
to the balance sheet.
■ As the provision is a liability it should have been tested primarily for understatement (completeness).
■ The delivery vehicles should be classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. For this to be the case the following IFRS 5 criteria
must be met:
? the vehicles must be available for immediate sale in their present condition; and
? their sale must be highly probable.
Tutorial note: Highly probable = management commitment to a plan + initiation of plan to locate buyer(s) +
active marketing + completion expected in a year.
■ However, even if the classification as held for sale is appropriate the measurement basis is incorrect.
■ Non-current assets classified as held for sale should be carried at the lower of carrying amount and fair value less
costs to sell.
■ It is incorrect that the vehicles are being measured at fair value less costs to sell which is $0·3 million in excess
of the carrying amount. This amounts to a revaluation. Wherever the credit entry is (equity or income statement)
it should be reversed. $0·3 million represents just less than 1% of assets (16·7% of profit if the credit is to the
income statement).
■ Comparison of fair value less costs to sell against carrying amount should have been made on an item by item
basis (and not on their totals).
(ii) Audit evidence
■ Copy of board minute documenting management’s decision to cease home deliveries (and any press
releases/internal memoranda to staff).
■ An analysis of revenue (e.g. extracted from management accounts) showing the amount attributed to home delivery
sales.
■ Redundancy terms for drivers as set out in their contracts of employment.
■ A ‘proof in total’ for the reasonableness/completeness of the redundancy provision (e.g. number of drivers × sum
of years employed × payment per year of service).
■ A schedule of depreciated cost of delivery vehicles extracted from the non-current asset register.
■ Checking of fair values on a sample basis to second hand market prices (as published/advertised in used vehicle
guides).
■ After-date net sale proceeds from sale of vehicles and comparison of proceeds against estimated fair values.
■ Physical inspection of condition of unsold vehicles.
■ Separate disclosure of the held for sale assets on the face of the balance sheet or in the notes.
■ Assets classified as held for sale (and other disposals) shown in the reconciliation of carrying amount at the
beginning and end of the period.
■ Additional descriptions in the notes of:
? the non-current assets; and
? the facts and circumstances leading to the sale/disposal (i.e. cessation of home delivery service).

正确答案：
(ii) Vehicles
■ Agreeing opening ledger balances of cost and accumulated depreciation (and impairment losses) to the non-current
asset register to confirm the comparative amounts.
■ Physically inspecting a sample of vehicles (selected from the asset register) to confirm existence and condition (for
evidence of impairment). If analytical procedures use management information on mileage records this should be
checked (e.g. against milometers) at the same time.
■ Agreeing additions to purchase invoices to confirm cost.
■ Reviewing the terms of all lease contracts entered into during the year to ensure that finance leases have been
capitalised.
■ Agreeing the depreciation rates applied to finance lease assets to those applied to similar purchased assets.
■ Reviewing repairs and maintenance accounts (included in materials expense) to ensure that there are no material
items of capital nature that have been expensed (i.e. a test for completeness).