1、2017 年 12 月 ACCA 考试 P7 高级审计与认证业务真题及答案解析(总分：120.00，做题时间：195 分钟)案例分析题(总题数：5，分数：120.00)Section A BOTH questions are compulsory and MUST be attempted1、You are a manager in the audit department of Dove you have never been involved in the audit of this client.The engagement is to conduct a financial and o
2、perational due diligence review of Zebra Co, a company which has been identified as a potential acquisition target by Cheetah Co, due to the synergies offered and the potential to expand the existing production facilities. As part of the due diligence review, you have been asked to provide a valuati
3、on of Zebra Cos assets and liabilities and an analysis of the companys operating profit forecasts. This will assist Cheetah Co in determining an appropriate purchase price for Zebra Co.During the engagement fieldwork your team identified two matters, which require your further consideration, as foll
4、ows:1. While reviewing correspondence with customers in relation to outstanding receivables, one of the team found a letter from a large retailer, for which Zebra Co produces a number of unique products, providing advanced notice that they are not renewing their purchasing agreement when the current
5、 one expires. The customer advised that they are switching to a new entrant to the market who is substantially cheaper than Zebra Co. A brief analysis identified that the customer provides, on average, almost 5% of Zebra Cos annual revenues.2. Zebra Co owns a piece of land which was given to it as a
6、 gift by the local authorities ten years ago. The land surrounds the entrance to the main production premises and is designated as a nature reserve. Restrictions were imposed on the usage of the land which also limit who the owner is able to sell the land to in the future. The land has zero carrying
7、 value in the financial statements.No additional matters have arisen for your consideration. You are also aware that the financial statements for the last ten years have been audited and no modifications have been made to the auditors opinion during this period.Required:In respect of the two matters
8、 identified above:(i) Explain why each matter requires further investigation as part of the due diligence review, and (6 marks)(ii) Recommend the investigation procedures to be performed. (6 marks)(b) The management team of Cheetah Co has also approached Leopard (7 marks)(b) Viper Co; (7 marks)(c) A
9、dder Co. (6 marks)（分数：20.00）_5、(a) Discuss the three types of misstatement identified in ISA 450 Evaluation of Misstatements Identified During the Audit and comment on why it is important for the auditor to consider the type of misstatement when evaluating their effect on the financial statements an
10、d determining the further actions to be taken. (5 marks)(b) You are responsible for the audit of Basking Co, a large, listed package delivery company. The audit of the financial statements for the year ended 31 July 2017 is nearly complete and you are reviewing the audit working papers. The financia
11、l statements recognise revenue of $56,360 million (2016 $56,245 million), profit for the year of $2,550 million (2016 $2,630 million) and total assets of $37,546 million (2016 $38,765 million).The uncorrected misstatements identified during the audit of Basking Co are described below. The audit enga
12、gement partner is holding a meeting with the management team of Basking Co next week, at which the uncorrected misstatements will be discussed.(1) The accuracy of the depreciation charge was investigated for a sample of motor vehicles with a carrying value of $45 million. The investigation revealed
13、that the accounting system had failed to correctly depreciate vehicles acquired during the year. Consequently, depreciation in the sample had been understated, and the carrying value of the vehicles overstated, by $350,000. The total value of all motor vehicles at the year end was $125 million (2016
14、 $131 million).(2) In January 2017, the board of Basking Co approved a loan to, Mrs C Angel, who is a key member of the senior management team of the company. The total amount of the loan was $75,000. Following a review of the board minutes, it was discovered that the directors agreed that the amoun
15、t was clearly trivial and have, therefore, not disclosed the loan in the notes to the financial statements.(3) During the year Basking Co reduced the value of their provision for customer refunds which is recognised in the financial statements. For the past five years the value of the provision has
16、been calculated based on 7% of one months sales, using an average monthly sales value. Management argued that due to improved internal processing systems, such a high rate of provision was no longer necessary and reduced it to 4%. Audit procedures found that refund levels were similar to previous ye
17、ars and there was insufficient evidence at this early stage to confirm whether the new system was more effective or not.Required:For each of the matters described above:(i) Explain the matters which should be discussed with management in relation to each of the uncorrected misstatements, and(ii) Ass
18、uming that management does not adjust the misstatements identified, evaluate the effect of each on the audit opinion.Note: The total marks will be split equally between each matter. (15 marks)（分数：20.00）_2017 年 12 月 ACCA 考试 P7 高级审计与认证业务真题答案解析(总分：120.00，做题时间：195 分钟)案例分析题(总题数：5，分数：120.00)Section A BOTH
19、 questions are compulsory and MUST be attempted1、You are a manager in the audit department of Dove with any international operation there is risk of non-compliance with local laws and regulations which could affect business operations. Additionally, political and economic instability introduces poss
20、ible unpredictability into operations, making it difficult to plan and budget for the Groups activities, as seen with the recent investment in a politically unstable area which is not yet generating a return for the Group. There are also foreign exchange issues, which unless properly managed, for ex
21、ample, by using currency derivatives, can introduce volatility to profit and cash flows.HurricanesThe hurricane guarantee scheme exposes the Group to unforeseeable costs in the event of a hurricane disrupting operations. The costs of moving guests to another hotel could be high, as could be the cost
22、s of refunding customer deposits if they choose to cancel their booking rather than transfer to a different hotel. The cost of renovation in the case of hotels being damaged by hurricane is also high and while this is covered by insurance, the Group will still need to fund the repair work before the
23、 full amount claimed on insurance is received which as discussed above will put significant pressure on the Groups cash flow. In addition, having two hotels which have been damaged by hurricanes closed for several months while repair work is carried out will result in lost revenue and cash inflows.C
24、laim relating to environmental damageThis is potentially a very serious matter, should it become public knowledge. The reputational damage could be significant, especially given that the Group markets itself as a luxury brand. Consumers are likely to react unfavourably to the allegations that the Gr
25、oups activities are harming the environment; this could result in cancellation of existing bookings and lower demand in the future, impacting on revenue and cash flows. The email relating to the claim from Ocean Protection refers to international legislation and therefore this issue could impact in
26、all of the countries in which the Group operates. The Group is hoping to negotiate with Ocean Protection to reduce the amount which is potentially payable and minimise media attention, but this may not be successful, Ocean Protection may not be willing to keep the issue out of the public eye or to s
27、ettle for a smaller monetary amount.(b) Significant risks of material misstatementRevenue recognitionThe Groups revenue could be over or understated due to timing issues relating to the recognition of revenue. Customers pay 40% of the cost of their holiday in advance, and the Group has to refund any
28、 bookings which are cancelled a week or more before a guest is due to stay at a hotel. There is a risk that revenue is recognised when deposits are received, which would be against the requirements of IFRS 15 Revenue from Contracts with Customers, which states that revenue should be recognised when,
29、 or as, an entity satisfies a performance obligation. Therefore, the deposits should be recognised within current liabilities as deferred revenue until a week prior to a guests stay, when they become non-refundable. There is the risk that revenue is overstated and deferred revenue and therefore curr
30、ent liabilities are understated if revenue is recognised in advance of the date the amount becomes non-refundable.Tutorial note: Credit will be awarded for discussion of further risk of misstatement relating to revenue recognition, for example, when the Group satisfies its performance obligations an
31、d whether the goods and services provided to hotel guests are separate revenue streams.Foreign exchangeThe Group holds $20 million in cash at the year end, most of which is held in foreign currencies. This represents 57% of Group assets, thus cash is material to the financial statements. According t
32、o IAS 21 The Effects of Changes in Foreign Exchange Rates, at the reporting date foreign currency monetary amounts should be reported using the closing exchange rate, and the exchange difference should be reported as part of profit or loss. There is a risk that the cash holdings are not retranslated
33、 using an appropriate year end exchange rate, causing assets and profit to be over or understated.Licence agreementThe cost of the agreement with Moulin Blanche is 14% of Group assets, and 50% of profit for the year. It is highly material to profit and is borderline in terms of materiality to the st
34、atement of financial position. The agreement appears to be a licensing arrangement, and as such it should be recognised in accordance with IAS 38 Intangible Assets, which requires initial recognition at cost and subsequent amortisation over the life of the asset, if the life is finite. The current a
35、ccounting treatment appears to be incorrect, because the cost has been treated as a marketing expense, leading to understatement of non-current assets and understatement of profit for the year by a significant amount. If the financial statements are not adjusted, they will contain a material misstat
36、ement, with implications for the auditors report. As the restaurants were opened on 1 July 2017, six months after the licence was agreed, it would seem appropriate to amortise the asset over the remaining term of the agreement of 95 years as this is the timeframe over which the licence will generate
37、 economic benefit. The annual amortisation expense would be $526,316, so if six months is recognised in this financial year, $263,158 should be charged to operating expenses, resulting in profit being closer to $1474 million for the year.Impairment of non-current assets due to political instability
38、and regulatory issuesThe sites acquired at a cost of $75 million represent 214% of total assets, and the hotel complex acquired at a cost of $23 million represents 66% of total assets; these assets are material to the Group financial statements. There are risks associated with the measurement of the
39、 assets, which are recognised as property, plant and equipment, as the assets could be impaired. None of these assets is currently being used by the Group in line with their principal activities, and there are indications that their recoverable value may be less than their cost. Due to the political
40、 instability and the regulatory issues, it seems that the assets may never generate the value in use which was anticipated, and their fair value may also have fallen below cost. Therefore, in accordance with IAS 36 Impairment of Assets, management should conduct an impairment review, to determine th
41、e recoverable amount of the assets and whether any impairment loss should be recognised. The risk is that assets are overstated, and profit overstated, if any necessary impairment of assets is not recognised at the reporting date.Effect of the hurricaneTwo of the Groups hotels are closed due to exte
42、nsive damage caused by a recent hurricane. It is anticipated that the Groups insurance policy will cover the damage of $25 million and the terms of the policy are that half will be paid in advance and the remainder on completion of the repairs, although this will need confirming during our audit tes
43、ting. The accounting for theseevents will need to be carefully considered as there is a risk that assets and profit are overstated if the damage and subsequent claim have not been accounted for correctly.The damage caused to the hotels and resultant loss of revenue are likely to represent an indicat
44、or of impairment which should be recorded in line with IAS 36. IAS 16 Property, Plant and Equipment requires the impairment and derecognition of PPE and any subsequent compensation claims to be treated as separate economic events and accounted for separately in the period they occur. The standard sp
45、ecifically states that it is not appropriate to net the events off and not record an impairment loss because there is an insurance claim in relation to the same assets. As such, this may mean that the Group has to account for the impairment loss in the current year but cannot recognise the compensat
46、ion claim until the next financial period as this can only be recognised when the compensation becomes receivable. If it is indeed the case that the insurance company will pay half of the claim in advance, then it is likely that $125m could be included in profit or loss in the current year.Provision
47、/contingent liabilityThe letter received from Ocean Protection indicates that it may be necessary to recognise a provision or disclose a contingent liability, in respect of the $10 million damages which have been claimed. The amount is material at 29% of total assets, and 679% of profit before tax (
48、adjusted for the incorrect accounting treatment of the licence agreement).According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, a provision should be recognised if there is a present obligation as a result of a past event, and that there is a probable outflow of future econom
49、ic benefits for which a reliable estimate can be made. It remains to be seen as to whether the Group can be held liable for the damage to the coral reefs. However, the finance director seems to be implying that the Group would like to reach a settlement, in which case a provision should be recognised.A provision could therefore be necessary, but this depends on the negotiations
