(b) Describe the audit work to be performed in respect of the carrying amount of the following items in thebalance sheet of GVF as at 30 September 2005:(i) goat herd; (4 marks)

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(b) Describe the audit work to be performed in respect of the carrying amount of the following items in the

balance sheet of GVF as at 30 September 2005:

(i) goat herd; (4 marks)

更多“(b) Describe the audit work to be performed in respect of the carrying amount of the following items in thebalance sheet of GVF as at 30 September 2005:(i) goat herd; (4 marks)”相关问题

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(b) You are the audit manager of Jinack Co, a private limited liability company. You are currently reviewing twomatters that have been left for your attention on the audit working paper file for the year ended 30 September2005:(i) Jinack holds an extensive range of inventory and keeps perpetual inventory records. There was no fullphysical inventory count at 30 September 2005 as a system of continuous stock checking is operated bywarehouse personnel under the supervision of an internal audit department.A major systems failure in October 2005 caused the perpetual inventory records to be corrupted before theyear-end inventory position was determined. As data recovery procedures were found to be inadequate,Jinack is reconstructing the year-end quantities through a physical count and ‘rollback’. The reconstructionexercise is expected to be completed in January 2006. (6 marks)Required:Identify and comment on the implications of the above matters for the auditor’s report on the financialstatements of Jinack Co for the year ended 30 September 2005 and, where appropriate, the year ending30 September 2006.NOTE: The mark allocation is shown against each of the matters.

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第2题

(ii) Audit work on after-date bank transactions identified a transfer of cash from Batik Co. The audit senior hasdocumented that the finance director explained that Batik commenced trading on 7 October 2005, afterbeing set up as a wholly-owned foreign subsidiary of Jinack. No other evidence has been obtained.(4 marks)Required:Identify and comment on the implications of the above matters for the auditor’s report on the financialstatements of Jinack Co for the year ended 30 September 2005 and, where appropriate, the year ending30 September 2006.NOTE: The mark allocation is shown against each of the matters.

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第3题

1 Geno Vesa Farm (GVF), a limited liability company, is a cheese manufacturer. Its principal activity is the productionof a traditional ‘Farmhouse’ cheese that is retailed around the world to exclusive shops, through mail order and websales. Other activities include the sale of locally produced foods through a farm shop and cheese-makingdemonstrations and tours.The farm’s herd of 700 goats is used primarily for the production of milk. Kids (i.e. goat offspring), which are asecondary product, are selected for herd replacement or otherwise sold. Animals held for sale are not usually retainedbeyond the time they reach optimal size or weight because their value usually does not increase thereafter.There are two main variations of the traditional farmhouse cheese; ‘Rabida Red’ and ‘Bachas Blue’. The red cheeseis coloured using Innittu, which is extracted from berries found only in South American rain forests. The cost of Innittuhas risen sharply over the last year as the collection of berries by local village workers has come under the scrutinyof an international action group. The group is lobbying the South American government to ban the export of Innittu,claiming that the workers are being exploited and that sustaining the forest is seriously under threat.Demand for Bachas Blue, which is made from unpasteurised milk, fell considerably in 2003 following the publicationof a research report that suggested a link between unpasteurised milk products and a skin disorder. The financialstatements for the year ended 30 September 2004 recognised a material impairment loss attributable to theequipment used exclusively for the manufacture of Bachas Blue. However, as the adverse publicity is gradually beingforgotten, sales of Bachas Blue are now showing a steady increase and are currently expected to return to their formerlevel by the end of September 2005.Cheese is matured to three strengths – mild, medium and strong – depending on the period of time it is left to ripen,which is six, 12 and 18 months respectively. When produced, the cheese is sold to a financial institution, AbingdonBank, at cost. Under the terms of sale, GVF has the option to buy the cheese on its maturity at cost plus 7% forevery six months which has elapsed.All cheese is stored to maturity on wooden boards in GVF’s cool and airy sheds. However, recently enacted healthand safety legislation requires that the wooden boards be replaced with stainless steel shelves with effect from 1 July2005. The management of GVF has petitioned the government health department that to comply with the legislationwould interfere with the maturing process and the production of medium and strong cheeses would have to cease.In 2003, GVF applied for and received a substantial regional development grant for the promotion of tourism in thearea. GVF’s management has deferred its plan to convert a disused barn into holiday accommodation from 2004until at least 2006.Required:(a) Identify and explain the principal audit risks to be considered when planning the final audit of GVF for theyear ending 30 September 2005. (14 marks)

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第4题

(d) Briefly describe the principal audit work to be performed in respect of the carrying amount of the followingitems in the balance sheet:(i) trade receivables; and (3 marks)

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第5题

(c) Briefly describe the principal audit work to be performed in respect of the carrying amount of the followingitems in the balance sheet:(i) development expenditure on the Fox model; (3 marks)

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第6题

3 You are the manager responsible for the audit of Seymour Co. The company offers information, proprietary foods andmedical innovations designed to improve the quality of life. (Proprietary foods are marketed under and protected byregistered names.) The draft consolidated financial statements for the year ended 30 September 2006 show revenueof $74·4 million (2005 – $69·2 million), profit before taxation of $13·2 million (2005 – $15·8 million) and totalassets of $53·3 million (2005 – $40·5 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In 2001, Seymour had been awarded a 20-year patent on a new drug, Tournose, that was also approved forfood use. The drug had been developed at a cost of $4 million which is being amortised over the life of thepatent. The patent cost $11,600. In September 2006 a competitor announced the successful completion ofpreliminary trials on an alternative drug with the same beneficial properties as Tournose. The alternative drug isexpected to be readily available in two years time. (7 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 Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.

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第7题

(b) Seymour offers health-related information services through a wholly-owned subsidiary, Aragon Co. Goodwill of$1·8 million recognised on the purchase of Aragon in October 2004 is not amortised but included at cost in theconsolidated balance sheet. At 30 September 2006 Seymour’s investment in Aragon is shown at cost,$4·5 million, in its separate financial statements.Aragon’s draft financial statements for the year ended 30 September 2006 show a loss before taxation of$0·6 million (2005 – $0·5 million loss) and total assets of $4·9 million (2005 – $5·7 million). The notes toAragon’s financial statements disclose that they have been prepared on a going concern basis that assumes thatSeymour will continue to provide financial support. (7 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 Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.

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(b) Describe the audit work to be performed in respect of the carrying amount of the following items in thebalance sheet of GVF as at 30 September 2005:(i) goat herd; (4 marks)

题目

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