(b) International Standards on Auditing (ISAs); and (5 marks)
第1题:
5 The International Accounting Standards Board (IASB) is currently in a joint project with the Accounting Standards
Board (ASB) in the UK and the Financial Accounting Standards Board (FASB) in the USA in the area of reporting
financial performance/comprehensive income. The main focus of the project is the development of a single statement
of comprehensive income to replace the income statement and statement of changes in equity. The objective is to
analyse all income and expenses and categorise them in a way that increases users’ understanding of the results of
an entity and assists in forming expectations of future income and expenditure. There seems to be some consensus
that the performance statement should be divided into three components being the results of operating activities,
financing and treasury activities, and other gains and losses.
Required:
(a) Describe the reasons why the three accounting standards boards have decided to cooperate and produce a
single statement of financial performance. (8 marks)
第2题:
5 International Financial Reporting Standards (IFRSs) are primarily designed for use by publicly listed companies and
in many countries the majority of companies using IFRSs are listed companies. In other countries IFRSs are used as
national Generally Accepted Accounting Practices (GAAP) for all companies including unlisted entities. It has been
argued that the same IFRSs should be used by all entities or alternatively a different body of standards should apply
to small and medium entities (SMEs).
Required:
(a) Discuss whether there is a need to develop a set of IFRSs specifically for SMEs. (7 marks)
第3题:
(ii) How existing standards could be modified to meet the needs of SMEs. (6 marks
第4题:
(b) Prepare a consolidated statement of financial position of the Ribby Group at 31 May 2008 in accordance
with International Financial Reporting Standards. (35 marks)
第5题:
4 The transition to International Financial Reporting Standards (IFRSs) involves major change for companies as IFRSs
introduce significant changes in accounting practices that were often not required by national generally accepted
accounting practice. It is important that the interpretation and application of IFRSs is consistent from country to
country. IFRSs are partly based on rules, and partly on principles and management’s judgement. Judgement is more
likely to be better used when it is based on experience of IFRSs within a sound financial reporting infrastructure. It is
hoped that national differences in accounting will be eliminated and financial statements will be consistent and
comparable worldwide.
Required:
(a) Discuss how the changes in accounting practices on transition to IFRSs and choice in the application of
individual IFRSs could lead to inconsistency between the financial statements of companies. (17 marks)
第6题:
(b) continuous auditing; (5 marks)
第7题:
6 The explosive growth of investing and raising capital in the global markets has put new emphasis on the development
of international accounting, auditing and ethical standards. The International Federation of Accountants (IFAC) has
been at the forefront of the development of the worldwide accountancy profession through its activities in ethics,
auditing and education.
Required:
Explain the developments in each of the following areas and indicate how they affect Chartered Certified
Accountants:
(a) IFAC’s ‘Code of Ethics for Professional Accountants’; (5 marks)
第8题:
(b) ‘opinion shopping’; (5 marks)
第9题:
The OSI(66)model, sometimes also called ISO or 7 layers reference model for communication, has been developed by the International Standards Organization in early 1980's.
A.referent
B.reference
C.referance
D.refering
第10题:
Fibre Channel, or FC, is a gigabit-speed network technology primarily used for storage networking.Fibre Channel is standardized in the T11 Technical Committee of the InterNational Committee forInformation Technology Standards (INCITS), an American National Standards Institute (ANSI)Caccredited standards committee. Which two of these correctly describe Fibre Channel? ()
第11题:
binding
winding
decaying
cunning
第12题:
lateral marks and cardinal marks
safe water marks
isolated danger marks and special marks
dangerous water marks
第13题:
(b) Prepare the balance sheet of York at 31 October 2006, using International Financial Reporting Standards,
discussing the nature of the accounting treatments selected, the adjustments made and the values placed
on the items in the balance sheet. (20 marks)
Gow’s net assets
IAS36 ‘Impairment of Assets’, sets out the events that might indicate that an asset is impaired. These circumstances include
external events such as the decline in the market value of an asset and internal events such as a reduction in the cash flows
to be generated from an asset or cash generating unit. The loss of the only customer of a cash generating unit (power station)
would be an indication of the possible impairment of the cash generating unit. Therefore, the power station will have to be
impairment tested.
The recoverable amount will have to be determined and compared to the value given to the asset on the setting up of the
joint venture. The recoverable amount is the higher of the cash generating unit’s fair value less costs to sell, and its value-inuse.
The fair value less costs to sell will be $15 million which is the offer for the purchase of the power station ($16 million)
less the costs to sell ($1 million). The value-in-use is the discounted value of the future cash flows expected to arise from the
cash generating unit. The future dismantling costs should be provided for as it has been agreed with the government that it
will be dismantled. The cost should be included in the future cash flows for the purpose of calculating value-in-use and
provided for in the financial statements and the cost added to the property, plant and equipment ($4 million ($5m/1·064)).
The value-in-use based on a discount rate of 6 per cent is $21 million (working). Therefore, the recoverable amount is
$21 million which is higher than the carrying value of the cash generating unit ($20 million) and, therefore, the value of the
cash generating unit is not impaired when compared to the present carrying value of $20 million (value before impairment
test).
Additionally IAS39, ‘Financial Instruments: recognition and measurement’, says that an entity must assess at each balance
sheet date whether a financial asset is impaired. In this case the receivable of $7 million is likely to be impaired as Race is
going into administration. The present value of the estimated future cash flows will be calculated. Normally cash receipts from
trade receivables will not be discounted but because the amounts are not likely to be received for a year then the anticipated
cash payment is 80% of ($5 million × 1/1·06), i.e. $3·8 million. Thus a provision for the impairment of the trade receivables
of $3·2 million should be made. The intangible asset of $3 million would be valueless as the contract has been terminated.
Glass’s Net Assets
The leased property continues to be accounted for as property, plant and equipment and the carrying amount will not be
adjusted. However, the remaining useful life of the property will be revised to reflect the shorter term. Thus the property will
be depreciated at $2 million per annum over the next two years. The change to the depreciation period is applied prospectively
not retrospectively. The lease liability must be assessed under IAS39 in order to determine whether it constitutes a
de-recognition of a financial liability. As the change is a modification of the lease and not an extinguishment, the lease liability
would not be derecognised. The lease liability will be adjusted for the one off payment of $1 million and re-measured to the
present value of the revised future cash flows. That is $0·6 million/1·07 + $0·6 million/(1·07 × 1·07) i.e. $1·1 million. The
adjustment to the lease liability would normally be recognised in profit or loss but in this case it will affect the net capital
contributed by Glass.
The termination cost of the contract cannot be treated as an intangible asset. It is similar to redundancy costs paid to terminate
a contract of employment. It represents compensation for the loss of future income for the agency. Therefore it must be
removed from the balance sheet of York. The recognition criteria for an intangible asset require that there should be probable
future economic benefits flowing to York and the cost can be measured reliably. The latter criterion is met but the first criterion
is not. The cost of gaining future customers is not linked to this compensation.
IAS18 ‘Revenue’ contains a concept of a ‘multiple element’ arrangement. This is a contract which contains two or more
elements which are in substance separate and are separately identifiable. In other words, the two elements can operate
independently from each other. In this case, the contract with the overseas company has two distinct elements. There is a
contract not to supply gas to any other customer in the country and there is a contract to sell gas at fair value to the overseas
company. The contract has not been fulfilled as yet and therefore the payment of $1·5 million should not be taken to profit
or loss in its entirety at the first opportunity. The non supply of gas to customers in that country occurs over the four year
period of the contract and therefore the payment should be recognised over that period. Therefore the amount should be
shown as deferred income and not as a deduction from intangible assets. The revenue on the sale of gas will be recognised
as normal according to IAS18.
There may be an issue over the value of the net assets being contributed. The net assets contributed by Glass amount to
$21·9 million whereas those contributed by Gow only total $13·8 million after taking into account any adjustments required
by IFRS. The joint venturers have equal shareholding in York but no formal written agreements, thus problems may arise ifGlass feels that the contributions to the joint venture are unequal.
第14题:
(b) Discuss the nature of the following issues in developing IFRSs for SMEs.
(i) The purpose of the standards and the type of entity to whom they should apply. (7 marks)
第15题:
4 The International Accounting Standards Board (IASB) has begun a joint project to revisit its conceptual framework for
financial accounting and reporting. The goals of the project are to build on the existing frameworks and converge them
into a common framework.
Required:
(a) Discuss why there is a need to develop an agreed international conceptual framework and the extent to which
an agreed international conceptual framework can be used to resolve practical accounting issues.
(13 marks)
第16题:
(c) On 1 May 2007 Sirus acquired another company, Marne plc. The directors of Marne, who were the only
shareholders, were offered an increased profit share in the enlarged business for a period of two years after the
date of acquisition as an incentive to accept the purchase offer. After this period, normal remuneration levels will
be resumed. Sirus estimated that this would cost them $5 million at 30 April 2008, and a further $6 million at
30 April 2009. These amounts will be paid in cash shortly after the respective year ends. (5 marks)
Required:
Draft a report to the directors of Sirus which discusses the principles and nature of the accounting treatment of
the above elements under International Financial Reporting Standards in the financial statements for the year
ended 30 April 2008.
第17题:
(iii) Whether or not you agree with the statement of the marketing director in note (9) above. (5 marks)
Professional marks for appropriateness of format, style. and structure of the report. (4 marks)
(iii) The marketing director is certainly correct in recognising that success is dependent on levels of service quality provided
by HFG to its clients. However, whilst the number of complaints is an important performance measure, it needs to be
used with caution. The nature of a complaint is, very often, far more indicative of the absence, or a lack, of service
quality. For example, the fact that 50 clients complained about having to wait for a longer time than they expected to
access gymnasium equipment is insignificant when compared to an accident arising from failure to maintain properly a
piece of gymnasium equipment. Moreover, the marketing director ought to be aware that the absolute number of
complaints may be misleading as much depends on the number of clients serviced during any given period. Thus, in
comparing the number of complaints received by the three centres then a relative measure of complaints received per
1,000 client days would be far more useful than the absolute number of complaints received.
The marketing director should also be advised that the number of complaints can give a misleading picture of the quality
of service provision since individuals have different levels of willingness to complain in similar situations.
The marketing director seems to accept the current level of complaints but is unwilling to accept any increase above this
level. This is not indicative of a quality-oriented organisation which would seek to reduce the number of complaints over
time via a programme of ‘continuous improvement’.
From the foregoing comments one can conclude that it would be myopic to focus on the number of client complaints
as being the only performance measure necessary to measure the quality of service provision. Other performance
measures which may indicate the level of service quality provided to clients by HFG are as follows:
– Staff responsiveness assumes critical significance in service industries. Hence the time taken to resolve client
queries by health centre staff is an important indicator of the level of service quality provided to clients.
– Staff appearance may be viewed as reflecting the image of the centres.
– The comfort of bedrooms and public rooms including facilities such as air-conditioning, tea/coffee-making and cold
drinks facilities, and office facilities such as e-mail, facsimile and photocopying.
– The availability of services such as the time taken to gain an appointment with a dietician or fitness consultant.
– The cleanliness of all areas within the centres will enhance the reputation of HFG. Conversely, unclean areas will
potentially deter clients from making repeat visits and/or recommendations to friends, colleagues etc.
– The presence of safety measures and the frequency of inspections made regarding gymnasium equipment within
the centres and compliance with legislation are of paramount importance in businesses like that of HFG.
– The achievement of target reductions in weight that have been agreed between centre consultants and clients.
(Other relevant measures would be acceptable.)
第18题:
4 (a) The purpose of ISA 510 ‘Initial Engagements – Opening Balances’ is to establish standards and provide guidance
regarding opening balances when the financial statements are audited for the first time or when the financial
statements for the prior period were audited by another auditor.
Required:
Explain the auditor’s reporting responsibilities that are specific to initial engagements. (5 marks)
第19题:
In relation to the courts’ powers to interpret legislation, explain and differentiate between:
(a) the literal approach, including the golden rule; and (5 marks)
(b) the purposive approach, including the mischief rule. (5 marks)
Tutorial note:
In order to apply any piece of legislation, judges have to determine its meaning. In other words they are required to interpret the
statute before them in order to give it meaning. The diffi culty, however, is that the words in statutes do not speak for themselves and
interpretation is an active process, and at least potentially a subjective one depending on the situation of the person who is doing
the interpreting.
Judges have considerable power in deciding the actual meaning of statutes, especially when they are able to deploy a number of
competing, not to say contradictory, mechanisms for deciding the meaning of the statute before them. There are, essentially, two
contrasting views as to how judges should go about determining the meaning of a statute – the restrictive, literal approach and the
more permissive, purposive approach.
(a) The literal approach
The literal approach is dominant in the English legal system, although it is not without critics, and devices do exist for
circumventing it when it is seen as too restrictive. This view of judicial interpretation holds that the judge should look primarily
to the words of the legislation in order to construe its meaning and, except in the very limited circumstances considered below,
should not look outside of, or behind, the legislation in an attempt to fi nd its meaning.
Within the context of the literal approach there are two distinct rules:
(i) The literal rule
Under this rule, the judge is required to consider what the legislation actually says rather than considering what it might
mean. In order to achieve this end, the judge should give words in legislation their literal meaning, that is, their plain,
ordinary, everyday meaning, even if the effect of this is to produce what might be considered an otherwise unjust or
undesirable outcome (Fisher v Bell (1961)) in which the court chose to follow the contract law literal interpretation of
the meaning of offer in the Act in question and declined to consider the usual non-legal literal interpretation of the word
(offer).
(ii) The golden rule
This rule is applied in circumstances where the application of the literal rule is likely to result in what appears to the court
to be an obviously absurd result. It should be emphasised, however, that the court is not at liberty to ignore, or replace,
legislative provisions simply on the basis that it considers them absurd; it must fi nd genuine diffi culties before it declines
to use the literal rule in favour of the golden one. As examples, there may be two apparently contradictory meanings to a
particular word used in the statute, or the provision may simply be ambiguous in its effect. In such situations, the golden
rule operates to ensure that preference is given to the meaning that does not result in the provision being an absurdity.
Thus in Adler v George (1964) the defendant was found guilty, under the Offi cial Secrets Act 1920, with obstruction
‘in the vicinity’ of a prohibited area, although she had actually carried out the obstruction ‘inside’ the area.
(b) The purposive approach
The purposive approach rejects the limitation of the judges’ search for meaning to a literal construction of the words of
legislation itself. It suggests that the interpretative role of the judge should include, where necessary, the power to look beyond
the words of statute in pursuit of the reason for its enactment, and that meaning should be construed in the light of that purpose
and so as to give it effect. This purposive approach is typical of civil law systems. In these jurisdictions, legislation tends to set
out general principles and leaves the fi ne details to be fi lled in later by the judges who are expected to make decisions in the
furtherance of those general principles.
European Community (EC) legislation tends to be drafted in the continental manner. Its detailed effect, therefore, can only be
determined on the basis of a purposive approach to its interpretation. This requirement, however, runs counter to the literal
approach that is the dominant approach in the English system. The need to interpret such legislation, however, has forced
a change in that approach in relation to Community legislation and even with respect to domestic legislation designed to
implement Community legislation. Thus, in Pickstone v Freemans plc (1988), the House of Lords held that it was permissible,
and indeed necessary, for the court to read words into inadequate domestic legislation in order to give effect to Community
law in relation to provisions relating to equal pay for work of equal value. (For a similar approach, see also the House of Lords’
decision in Litster v Forth Dry Dock (1989) and the decision in Three Rivers DC v Bank of England (No 2) (1996).) However,
it has to recognise that the purposive rule is not particularly modern and has its precursor in a long established rule of statutory
interpretation, namely the mischief rule.
The mischief rule
This rule permits the court to go behind the actual wording of a statute in order to consider the problem that the statute is
supposed to remedy.
In its traditional expression it is limited by being restricted to using previous common law rules in order to decide the operation
of contemporary legislation. Thus in Heydon’s case (1584) it was stated that in making use of the mischief rule the court
should consider what the mischief in the law was which the common law did not adequately deal with and which statute law
had intervened to remedy. Use of the mischief rule may be seen in Corkery v Carpenter (1950), in which a man was found
guilty of being drunk in charge of a carriage although he was in fact only in charge of a bicycle.
第20题:
2 (a) Define the following terms:
(i) Forensic Accounting;
(ii) Forensic Investigation;
(iii) Forensic Auditing. (6 marks)
第21题:
Fibre Channel, or FC, is a gigabit-speed network technology primarily used for storage networking.Fibre Channel is standardized in the T11 Technical Committee of the InterNational Committee for Information Technology Standards (INCITS), an American National Standards Institute (ANSI) Caccredited standards committee.Which two of these correctly describe Fibre Channel?()
A. supports multiple protocols
B. works only in a shared or loop environment
C. allows addressing for up to 4 million nodes
D. provides a high speed transport for SCSI payloads
第22题:
enhance
reinforce
restrain
stabilize
第23题:
the International Convention for the Safety of the Life at Sea
the International Convention for the Prevention from ships
the International Convention on Standards of Training, Certification and Watch keeping for Seafarers
the International Convention for the Control and Management of Ship’s Ballast Water and Sediments