ACCA考试P6模拟练习

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：

 

正确答案：

You will be aware of the importance of accurate resource valuation to Worldwide Minerals (WM). Unfortunately, I have to
inform. you that the reserve of mallerite, one of our key minerals in a new area of exploration, was found to have been
overestimated after the purchase of a mine. It has been suggested that this information may have an effect on shareholder
value and so I thought it appropriate to write to inform. you of how the board intends to respond to the situation.
In particular, I would like to address two issues. It has been suggested that the overestimation arose because of issues with
the internal control systems at WM. I would firstly like to reassure you of the importance that your board places on sound
internal control systems and then I would like to highlight improvements to internal controls that we shall be implementing
to ensure that the problem should not recur.
(i) Importance of internal control
Internal control systems are essential in all public companies and Worldwide Minerals (WM) is no exception. If anything,
WM’s strategic position makes internal control even more important, operating as it does in many international situations
and dealing with minerals that must be guaranteed in terms of volume, grade and quality. Accordingly, your board
recognises that internal control underpins investor confidence. Investors have traditionally trusted WM’s management
because they have assumed it capable of managing its internal operations. This has, specifically, meant becoming aware
of and controlling known risks. Risks would not be known about and managed without adequate internal control
systems. Internal control, furthermore, helps to manage quality throughout the organisation and it provides
management with information on internal operations and compliance. These features are important in ensuring quality
at all stages in the WM value chain from the extraction of minerals to the delivery of product to our customers. Linked
to this is the importance of internal control in helping to expose and improve underperforming internal operations.
Finally, internal control systems are essential in providing information for internal and external reporting upon which, in
turn, investor confidence rests.
(ii) Proposals to improve internal systems at WM
As you may be aware, mineral estimation and measurement can be problematic, particularly in some regions. Indeed,
there are several factors that can lead to under or overestimation of reserves valuations as a result of geological survey
techniques and regional cultural/social factors. In the case of mallerite, however, the issues that have been brought to
the board’s attention are matters of internal control and it is to these that I would now like to turn.
In first instance, it is clear from the fact that the overestimate was made that we will need to audit geological reports at
an appropriate (and probably lower) level in the organisation in future.
Once a claim has been made about a given mineral resource level, especially one upon which investor returns might
depend, appropriate systems will be instituted to ask for and obtain evidence that such reserves have been correctly and
accurately quantified.
We will recognise that single and verbal source reports of reserve quantities may not necessarily be accurate. This was
one of the apparent causes of the overestimation of mallerite. A system of auditing actual reserves rather than relying
on verbal evidence will rectify this.
The purchase of any going concern business, such as the mallerite mine, is subject to due diligence. WM will be
examining its procedures in this area to ensure that they are fit for purpose in the way that they may not have been in
respect of the purchase of the mallerite mine. I will be taking all appropriate steps to ensure that all of these internal
control issues can be addressed in future.
Thank you for your continued support of Worldwide Minerals and I hope the foregoing goes some way to reassure you
that the company places the highest value on its investors and their loyalty.
Yours faithfully,
Tim Blake
Chairman

正确答案：
(b) ISA 540 Audit of Accounting Estimates requires that auditors should obtain sufficient audit evidence as to whether an
accounting estimate, such as a warranty provision, is reasonable given the entity’s circumstances, and that disclosure is
appropriate. One, or a combination of the following approaches should be used:
Review and test the process used by management to develop the estimate
– Review contracts or orders for the terms of the warranty to gain an understanding of the obligation of Island Co
– Review correspondence with customers during the year to gain an understanding of claims already in progress at the
year end
– Perform. analytical procedures to compare the level of warranty provision year on year, and compare actual to budgeted
provisions. If possible disaggregate the data, for example, compare provision for specific types of machinery or customer
by customer
– Re-calculate the warranty provision
– Agree the percentage applied in the calculation to the stated accounting policy of Island Co
– Review board minutes for discussion of on-going warranty claims, and for approval of the amount provided
– Use management accounts to ascertain normal level of warranty rectification costs during the year
– Discuss with Kate Shannon the assumptions she used to determine the percentage used in her calculations
– Consider whether assumptions used are consistent with the auditors’ understanding of the business
– Compare prior year provision with actual expenditure on warranty claims in the accounting period
– Compare the current year provision with prior year and discuss any fluctuation with Kate Shannon.
Review subsequent events which confirm the estimate made
– Review any work carried out post year end on specific faults that have been provided for. Agree that all costs are included
in the year end provision.
– Agree cash expended on rectification work in the post balance sheet period to the cash book
– Agree cash expended on rectification work post year end to suppliers’ invoices, or to internal cost ledgers if work carried
out by employees of Island Co
– Read customer correspondence received post year end for any claims received since the year end.