(b) Describe the principal matters that should be included in your firm’s submission to provide internal audit
services to RBG. (10 marks)
Required:(iii) A firm of consultants has offered to undertake a study on behalf of Envico Ltd which will provide perfectinformation regarding seminar attendance during the forthcoming year.Advise the management of Envico Ltd with regard to the maximum amount that they should pay toconsultants for perfect information regarding seminar attendance and comment briefly on the use ofperfect information in such decisions. (5 marks)
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(c) (i) Provide three examples of personal financial planning protection products that would be of use inHenry’s situation. Justify your selections by reference to the type of protection provided. (6 marks)
(b) Describe the principal audit work to be performed in respect of the useful lives of Shire Oil Co’s rig platforms.(6 marks)
(c) During the year Albreda paid $0·1 million (2004 – $0·3 million) in fines and penalties relating to breaches ofhealth and safety regulations. These amounts have not been separately disclosed but included in cost of sales.(5 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Albreda Co for the year ended30 September 2005.NOTE: The mark allocation is shown against each of the three issues.
(c) Your firm has provided financial advice to the Pholey family for many years and this has sometimes involved yourfirm in carrying out transactions on their behalf. The eldest son, Esau, is to take up a position as a seniorgovernment official to a foreign country next month. (4 marks)Required:Identify and comment on the ethical and other professional issues raised by each of these matters and state whataction, if any, Dedza should now take.NOTE: The mark allocation is shown against each of the three situations
(b) Explain the matters you should consider before accepting an engagement to conduct a due diligence reviewof MCM. (10 marks)
(b) Chatam, a limited liability company, is a long-standing client. One of its subsidiaries, Ayora, has made lossesfor several years. At your firm’s request, Chatam’s management has made a written representation that goodwillarising on the acquisition of Ayora is not impaired. Your firm’s auditor’s report on the consolidated financialstatements of Chatam for the year ended 31 March 2005 is unmodified. Your firm’s auditor’s report on thefinancial statements of Ayora is similarly unmodified. Chatam’s Chief Executive, Charles Barrington, is due toretire in 2006 when his share options mature. (6 marks)Required:Comment on the ethical and other professional issues raised by each of the above matters and their implications,if any, for the continuation of each assignment.NOTE: The mark allocation is shown against each of the three issues.
