英语专业报考ACCA有优势吗？

2 Chen Products produces four manufactured products: Products 1, 2, 3 and 4. The company’s risk committee recently

met to discuss how the company might respond to a number of problems that have arisen with Product 2. After a

number of incidents in which Product 2 had failed whilst being used by customers, Chen Products had been presented

with compensation claims from customers injured and inconvenienced by the product failure. It was decided that the

risk committee should meet to discuss the options.

When the discussion of Product 2 began, committee chairman Anne Ricardo reminded her colleagues that, apart from

the compensation claims, Product 2 was a highly profitable product.

Chen’s risk management committee comprised four non-executive directors who each had different backgrounds and

areas of expertise. None of them had direct experience of Chen’s industry or products. It was noted that it was

common for them to disagree among themselves as to how risks should be managed and that in some situations,

each member proposed a quite different strategy to manage a given risk. This was the case when they discussed

which risk management strategy to adopt with regard to Product 2.

Required:

(a) Describe the typical roles of a risk management committee. (6 marks)

(ii) how effective delegation might be achieved; (6 marks)

5 You are the manager responsible for the audit of Blod Co, a listed company, for the year ended 31 March 2008. Your

firm was appointed as auditors of Blod Co in September 2007. The audit work has been completed, and you are

reviewing the working papers in order to draft a report to those charged with governance. The statement of financial

position (balance sheet) shows total assets of $78 million (2007 – $66 million). The main business activity of Blod

Co is the manufacture of farm machinery.

During the audit of property, plant and equipment it was discovered that controls over capital expenditure transactions

had deteriorated during the year. Authorisation had not been gained for the purchase of office equipment with a cost

of $225,000. No material errors in the financial statements were revealed by audit procedures performed on property,

plant and equipment.

An internally generated brand name has been included in the statement of financial position (balance sheet) at a fair

value of $10 million. Audit working papers show that the matter was discussed with the financial controller, who

stated that the $10 million represents the present value of future cash flows estimated to be generated by the brand

name. The member of the audit team who completed the work programme on intangible assets has noted that this

treatment appears to be in breach of IAS 38 Intangible Assets, and that the management refuses to derecognise the

asset.

Problems were experienced in the audit of inventories. Due to an oversight by the internal auditors of Blod Co, the

external audit team did not receive a copy of inventory counting procedures prior to attending the count. This caused

a delay at the beginning of the inventory count, when the audit team had to quickly familiarise themselves with the

procedures. In addition, on the final audit, when the audit senior requested documentation to support the final

inventory valuation, it took two weeks for the information to be received because the accountant who had prepared

the schedules had mislaid them.

Required:

(a) (i) Identify the main purpose of including ‘findings from the audit’ (management letter points) in a report

to those charged with governance. (2 marks)

(ii) State the principal audit procedures to be performed on the consolidation schedule of the Rosie Group.

(4 marks)