ACCA：HistoryExamQuestionAnalysis(一)
發布時間：2014-02-26 共2頁
（b）15 August 2005
（i）The bankruptcy of a major debtor provides additional evidence of conditions existing at the balance sheet date. The debtor will not be able to pay debts due therefore debtors are overstated and the bad debt provision on the profit and loss account is understated. An adjustment for the amount of the debtor should be made in the financial statements.
（ii）The bankruptcy of the major debtor takes place after the end of the year but before the financial statements and the auditors’ report are signed. As the auditors’ report has not been signed, the auditor is responsible for identifying material events that affect the financial statements. This means that audit procedures should be carried out which are designed to identify this event.
Specific procedures undertaken include:
– Confirming that the debtor will not pay to a letter from the receiver or similar authorised person.
– Confirming the amount due from the debtor to invoices raised prior to the year end, and if possible to a positive debtors circularisation letter.
– Auditing the adjustment to the financial statements decreasing the debtor balance and increasing the bad debt write off in the profit and loss account.
– Including the amount in the management representation letter to confirm no other amounts are due from the debtor.
1 November 2005
（i）The accidental release of toxic chemicals occurred after the balance sheet date. Assuming that the stock was not on the balance sheet at the year end, then the spill is indicative of conditions that arose subsequent to the year end. No adjustment appears to be necessary. However, the event may be significant in terms of the operations of the company （a large legal claim could arise） and so disclosure of the event would be expected.
（ii）The accidental release of toxic chemicals takes place after the auditors’ report has been signed but before the financial statements are sent to the members. At this stage of the audit, the auditor does not have any responsibility to perform procedures or make inquiries regarding the financial statements. The management of OilRaker are responsible for telling the auditor about any significant events, such as this one.
However, as the auditor is now aware of the event and this materially affects the financial statements in terms of disclosure being required, the auditor does have to discuss the event with management.
Specific procedures to be undertaken include:
– Obtain information concerning the chemical release from management, reading local press and if possible the company’s lawyers – the latter may be able to indicate whether there is any legal liability.
– Discuss the appropriate accounting treatment with the directors, confirming that disclosure is required in the circumstances.
– Read the disclosure note to confirm that the matter is adequately explained in the financial statements.
– Obtain an updated letter of representation from the directors confirming that there are no other events requiring disclosure.
– Amend the auditors’ report to include an explanatory paragraph to draw attention to the full disclosure noted in the financial statements. Date the new auditors’ report no earlier than the date of the amended financial statements.
30 November 2005
（i）The fire at an oil well means that OilRaker’s oil production and presumably profits, will fall in the next financial year. The fire though does not provide additional evidence of conditions existing at the balance sheet date as at this time there was no indication that this would occur. The event is therefore non-adjusting in the financial statements. However, disclosure of the event should be made so that the financial statements do not give a misleading position.
（ii） The fire at an oil well takes place after the financial statements have been issued. At this time, the auditor has no obligation to make any inquiry at all regarding the financial statements.
If the auditor becomes aware of the event, then the potential effect on the auditors’ report must be considered.
Specific procedures undertaken include:
– Checking the board minutes, insurance claims and similar documents to ensure that the fire will be covered by insurance and there is no contingent liability for replacing fixed assets or clearing up any environmental damage.
– Inquiring of the directors how the members will be informed of the situation. Presumably this will happen at the Annual General Meeting （AGM）.
– If the directors plan to re-issue the financial statements, ensure that appropriate disclosure is made of the event.
– If the directors do not intend to amend the financial statements, and you consider the matter to be material to understanding the accounts, consider speaking at the AGM, if this has not already taken place.
– If necessary, contact the auditor’s lawyers to discuss what action can be taken regarding the lack of disclosure.
（i）The bankruptcy of a major debtor provides additional evidence of conditions existing at the balance sheet date. The debtor will not be able to pay debts due therefore debtors are overstated and the bad debt provision on the profit and loss account is understated. An adjustment for the amount of the debtor should be made in the financial statements.
（ii）The bankruptcy of the major debtor takes place after the end of the year but before the financial statements and the auditors’ report are signed. As the auditors’ report has not been signed, the auditor is responsible for identifying material events that affect the financial statements. This means that audit procedures should be carried out which are designed to identify this event.
Specific procedures undertaken include:
– Confirming that the debtor will not pay to a letter from the receiver or similar authorised person.
– Confirming the amount due from the debtor to invoices raised prior to the year end, and if possible to a positive debtors circularisation letter.
– Auditing the adjustment to the financial statements decreasing the debtor balance and increasing the bad debt write off in the profit and loss account.
– Including the amount in the management representation letter to confirm no other amounts are due from the debtor.
1 November 2005
（i）The accidental release of toxic chemicals occurred after the balance sheet date. Assuming that the stock was not on the balance sheet at the year end, then the spill is indicative of conditions that arose subsequent to the year end. No adjustment appears to be necessary. However, the event may be significant in terms of the operations of the company （a large legal claim could arise） and so disclosure of the event would be expected.
（ii）The accidental release of toxic chemicals takes place after the auditors’ report has been signed but before the financial statements are sent to the members. At this stage of the audit, the auditor does not have any responsibility to perform procedures or make inquiries regarding the financial statements. The management of OilRaker are responsible for telling the auditor about any significant events, such as this one.
However, as the auditor is now aware of the event and this materially affects the financial statements in terms of disclosure being required, the auditor does have to discuss the event with management.
Specific procedures to be undertaken include:
– Obtain information concerning the chemical release from management, reading local press and if possible the company’s lawyers – the latter may be able to indicate whether there is any legal liability.
– Discuss the appropriate accounting treatment with the directors, confirming that disclosure is required in the circumstances.
– Read the disclosure note to confirm that the matter is adequately explained in the financial statements.
– Obtain an updated letter of representation from the directors confirming that there are no other events requiring disclosure.
– Amend the auditors’ report to include an explanatory paragraph to draw attention to the full disclosure noted in the financial statements. Date the new auditors’ report no earlier than the date of the amended financial statements.
30 November 2005
（i）The fire at an oil well means that OilRaker’s oil production and presumably profits, will fall in the next financial year. The fire though does not provide additional evidence of conditions existing at the balance sheet date as at this time there was no indication that this would occur. The event is therefore non-adjusting in the financial statements. However, disclosure of the event should be made so that the financial statements do not give a misleading position.
（ii） The fire at an oil well takes place after the financial statements have been issued. At this time, the auditor has no obligation to make any inquiry at all regarding the financial statements.
If the auditor becomes aware of the event, then the potential effect on the auditors’ report must be considered.
Specific procedures undertaken include:
– Checking the board minutes, insurance claims and similar documents to ensure that the fire will be covered by insurance and there is no contingent liability for replacing fixed assets or clearing up any environmental damage.
– Inquiring of the directors how the members will be informed of the situation. Presumably this will happen at the Annual General Meeting （AGM）.
– If the directors plan to re-issue the financial statements, ensure that appropriate disclosure is made of the event.
– If the directors do not intend to amend the financial statements, and you consider the matter to be material to understanding the accounts, consider speaking at the AGM, if this has not already taken place.
– If necessary, contact the auditor’s lawyers to discuss what action can be taken regarding the lack of disclosure.
