CA Audit 1

米粒儿宝典
AAA 复习资料
2023 年春季班专用【2022 Sep-2023 Jun】
编制人：米米粒儿
2023-3-10
适用 2023 Jun 考季更多资料及视频，关注微博及 B 站：叫我米米粒儿课程咨询微信：Peitais
目录
Overall review of AAA ............................................................................................................................................ 1
Audit logic ................................................................................................................................................................. 2
Part A Planning & Risk assessment .................................................................................................................... 3
Chapter 1 Audit risk ................................................................................................................................................ 3
1. 准则带来的审计风险 ..............................................................................................................................................3
IFRS 15 Revenue from Contracts with Customers .................................................................................................4
IAS 20 Government Grants and Assistance .......................................................................................................... 11
IAS 2 Inventory ............................................................................................................................................................... 13
IAS 16 Property, Plant and Equipment ................................................................................................................... 14
IAS 40 Investment Property ....................................................................................................................................... 17
IAS 23 Borrowing Costs ............................................................................................................................................... 20
IFRS 9 Financial Instruments ...................................................................................................................................... 21
IAS 38 Intangible Asset................................................................................................................................................ 22
IFRS 3 Goodwil ............................................................................................................................................................... 26
IAS 36 Impairment ........................................................................................................................................................ 30
IFRS 5 Non-current assets held for sale ................................................................................................................ 33
IFRS 5 Discontinued operation ................................................................................................................................. 34
IAS 37 Provisions, Contingent Liabilities and Contingent Assets .................................................................. 37
IAS 10 Events after the reporting date ................................................................................................................... 41
IAS 24 Related party transaction .............................................................................................................................. 42
IFRS 2 Share-based Payment .................................................................................................................................... 44
IFRS 16 Lease .................................................................................................................................................................. 46
IFRS 16 Sale and lease back ....................................................................................................................................... 47
IFRS 8 Operating Segments ....................................................................................................................................... 50
IFRS 10 Consolidated financial statements ........................................................................................................... 53
IFRS 11 Joint arrangements ....................................................................................................................................... 53
IAS 28 Investments in associates and joint ventures ......................................................................................... 53
IFRS 3 Business combination ..................................................................................................................................... 53
IAS 21 The Effects of Changes in Foreign Exchange Rates ............................................................................. 55
IAS 12 Income Taxes .................................................................................................................................................... 58
IAS 33 Earnings per Share .......................................................................................................................................... 58
Going concern ................................................................................................................................................................ 59
2. Audit risk 答题思路 .............................................................................................................................................. 61
3. Audit risk vs RoMM .............................................................................................................................................. 65
4. Implication for planning the audit and relevant actions .......................................................................... 66
历年真题 .......................................................................................................................................................................... 67
2022 Dec Q1 ................................................................................................................................................................... 67
Chapter 2 Business risk ........................................................................................................................................ 74

1. Business risk vs Audit risk ................................................................................................................................... 74
2. 常见的 Business risk 总结 .................................................................................................................................. 75
3. Business risk 答题要点 ........................................................................................................................................ 76
历年真题 .......................................................................................................................................................................... 77
2022 Dec Q1 ................................................................................................................................................................... 77
Part B Matter & evidence .................................................................................................................................... 83
Chapter 3 Matter & evidence ............................................................................................................................. 83
1. Matters vs Audit risk ............................................................................................................................................ 83
2. 重要性水平 ............................................................................................................................................................. 83
3. 写作常见格式......................................................................................................................................................... 84
4. Audit procedures 常见思路............................................................................................................................... 84
5. Audit procedures vs audit evidence ............................................................................................................... 85
6. 分准则学习 ............................................................................................................................................................. 86
1) Government grant ................................................................................................................................................ 86
① 2021 SD Q3 b) ii ....................................................................................................................................................... 87
2) Inventory.................................................................................................................................................................. 89
3) PPE............................................................................................................................................................................. 90
① 2020 Mar Q1 b) ii)-PPE+RPT ............................................................................................................................... 90
4) Related party transaction ................................................................................................................................... 92
③ 2019 Mar/Jun Q3 b) iii) ....................................................................................................................................... 93
5) Investment property ............................................................................................................................................ 95
① 2019 Sep/Dec Q2 a) ii)........................................................................................................................................... 96
6) Intangible asset ..................................................................................................................................................... 98
7) Goodwill ................................................................................................................................................................. 100
8) Impairment ........................................................................................................................................................... 101
① 2021 Mar/Jun Q3 a) ii) ......................................................................................................................................... 104
9) Held for sale & discontinued operations .................................................................................................... 106
① 2020 Sep/Dec Q3 a) i).......................................................................................................................................... 107
10) Provision ................................................................................................................................................................ 110
① 2019 Mar/Jun Q3 b) ii) ......................................................................................................................................... 113
11) Share-based Payment....................................................................................................................................... 115
12) Sale and leaseback ............................................................................................................................................. 116
① 2019 Sep/Dec Q2 a) i).......................................................................................................................................... 117
13) Segmental information ..................................................................................................................................... 119
14) Subsidiary, Joint venture & Associate .......................................................................................................... 120
15) Short term investmen ........................................................................................................................................ 122
17) Income Taxes......................................................................................................................................................... 123
16) Post-employment benefits (Pension) .......................................................................................................... 124
IAS 19 Employee benefits ......................................................................................................................................... 124

Part C Completion review and reporting ......................................................................................................126
Chapter 4 Overall issues ....................................................................................................................................126
历年真题 ........................................................................................................................................................................ 128
① 2020 Mar Q2 a) ii) iii) ......................................................................................................................................... 128
Chapter 5 Subsequent events ..........................................................................................................................130
1. Auditor's responsibility ..................................................................................................................................... 130
2. Adjusting vs non-adjusting event ................................................................................................................. 130
3. Audit procedures ................................................................................................................................................ 131
Chapter 6 Going concern...................................................................................................................................132
1. Management and auditor responsibility ..................................................................................................... 132
2. Events may cast doubt about the going concern assumption ............................................................ 132
3. Evaluate assumption of cash flow ................................................................................................................. 132
4. Audit procedures ................................................................................................................................................ 132
历年真题 ........................................................................................................................................................................ 134
1) 2022 Sep Q3......................................................................................................................................................... 134
Chapter 7 Audit Report ......................................................................................................................................139
1. Implications to auditor (Further actions of auditors) .............................................................................. 140
2. Material misstatement ...................................................................................................................................... 140
3. Audit opinion ....................................................................................................................................................... 140
4. Basic elements of the auditor's report ......................................................................................................... 141
① 2021 Sep/Dec Q3 b) ............................................................................................................................................. 143
② Pre-Jun 2022 Mock............................................................................................................................................... 145
5. Emphasis of Matter paragraphs (EOM) ....................................................................................................... 148
③ 2021 Mar/Jun Q3 b) ............................................................................................................................................. 149
6. Other information............................................................................................................................................... 151
7. Key audit matters (KAM) .................................................................................................................................. 151
Part D Other importance issues .......................................................................................................................153
Chapter 8 Professional ethics ...........................................................................................................................153
1. Fundamental principles .................................................................................................................................... 153
2. Conflicts of interest ............................................................................................................................................ 153
3. Ethical threats....................................................................................................................................................... 154
历年真题 ........................................................................................................................................................................ 164
① 2021 Mar/Jun Q1 d)........................................................................................................................................... 164
Chapter 9 Group audits......................................................................................................................................166
1. Responsibility ....................................................................................................................................................... 167
2. Significant component ...................................................................................................................................... 167
3. How to involve with component auditor .................................................................................................... 169
4. Joint audit.............................................................................................................................................................. 170
5. Materiality ............................................................................................................................................................. 171
6. What if the group auditor can’t able to access all informatio ............................................................. 172
7. What if a subsidiary’s report has been modified ..................................................................................... 172
Chapter 10 Quality control................................................................................................................................174
1. Matters before acceptance.............................................................................................................................. 175
2. Quality control review ....................................................................................................................................... 176
2.1. Overall quality control ....................................................................................................................................... 176
2.2. 关于审计计划....................................................................................................................................................... 178
3.1. 关于抽样方式....................................................................................................................................................... 179
3.2. 关于错报的态度 .................................................................................................................................................. 179
3.3. 关于舞弊 ................................................................................................................................................................ 179
3.4. 关于客户的违法问题 ......................................................................................................................................... 181
3.5. 关于使用专家工作 ............................................................................................................................................. 181
3.6. 关于集团审计....................................................................................................................................................... 182
3.7. 关于审计工作外包/利用内审的工作............................................................................................................ 184
3.8. 关于内控 ................................................................................................................................................................ 184
3.9. 关于复杂的、高主观判断的科目 .................................................................................................................. 186
Part E Non-audit assurance ..............................................................................................................................188
Chapter 11 Overall review of assurance ........................................................................................................188
1. Assurance engagement .................................................................................................................................... 188
2. Audit vs Review ................................................................................................................................................... 188
Chapter 12 Prospective financial information (PFI) ....................................................................................190
1. Purpose of PFI...................................................................................................................................................... 190
2. Level of assurance provided ........................................................................................................................... 190
3. Matters to consider before accepting an engagement to report on PFI ......................................... 190
4. Audit procedures (Evidence) ........................................................................................................................... 191
5. PFI 报告意见 ......................................................................................................................................................... 192
历年真题 ........................................................................................................................................................................ 193
① 2020 Mar Q3 a) ...................................................................................................................................................... 193
Chapter 13 Forensic audit (Investigation) .....................................................................................................197
1. Applications of forensic auditing ................................................................................................................... 197
2. Matters considered before accepting a forensic investigation ........................................................... 197
3. Audit Procedures ................................................................................................................................................ 198
历年真题 ........................................................................................................................................................................ 199
① 2019 Sep/Dec Q3 b) ............................................................................................................................................. 199
Chapter 14 Money laundering .........................................................................................................................201
1. Money laundering .............................................................................................................................................. 201
2. Sign of money laundering ............................................................................................................................... 201
3. Action when money laundering is suspicious ........................................................................................... 201
4. Auditors responsibility to money laundering ............................................................................................ 201
5. Customer due diligence ................................................................................................................................... 202

历年真题 ........................................................................................................................................................................ 203
① 2018 Dec Q3 a) ...................................................................................................................................................... 203
② 2022 Mar/Jun Q1 d)........................................................................................................................................... 205
Chapter 15 Due Diligence .................................................................................................................................207
1. What is due diligence ........................................................................................................................................ 207
2. Purpose of due diligence ................................................................................................................................. 207
历年真题 ........................................................................................................................................................................ 208
① 2022 Mar/Jun Q2................................................................................................................................................... 208
Chapter 16 Social and environment information ........................................................................................210
1. Environment ......................................................................................................................................................... 210
2. Social responsibility............................................................................................................................................ 210
历年真题 ........................................................................................................................................................................ 211
① Pre-Sep 2022 Mock .............................................................................................................................................. 211
Overall review of AAA
1. 考试时间：3 小时 15 分钟 (答题时间)+10 分钟 (读考试指南时间)
2. 考试题型：
题目知识分专业分
Q1 40 分 10 分
Q2 20 分 5分
Q3 20 分 5分
合计 80 分 20 分
通过分值 50 分
3. 高频考点分布
高频考点具体内容分值
Audit risk 20-26 分
Risk
Business risk 10 分
Q1) 6 分
Matters and evidence FR+ SBR 相关准则
Q2/3) 15-20 分
Reporting 报告内容/报告意见 10 分
Ethics Conflict of interest +ethics 10 分
Group audit 单独出题或结合质量控制出题 10 分
贯穿审计整个过程
Quality control 承接业务前+Plan+证据获取+人员不称职+合伙人缺少 15-20 分
必要监管
Review/ Prospective financial information (PFI)
Forensic audit
Non-audit assurance Money laundry 10 分
Due diligence
Social and environment information
4. 历年通过率
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Audit logic
Matters to consider （10 分）

承接业务  Ethics 道德问题
Acceptance the engagement  Management integrity 管理层诚信度
 Competence and resources 能力、资源
 跨国、上市等问题
 专业行业导致的人员问题
审计计划  集团审计（Group audit）
Audit risk  首年审计（New client）
 检查风险+期初余额
 与前任审计沟通
具体的审计程序
Audit matters &Audit procedure
所有错误一查到底
 审计证据的瑕疵及进一步审计程序
审计收尾【Comments on the audit evidence and
出具报告前的准备工作 further action】
 质量复核【Quality control review】
出具审计意见
所有错报累计，重大错报影响审计意见
审计全程关注【职业怀疑与判断】-获得更多分值并提高专业分
 管理层操纵利润-Management bias
 管理层的诚信【Management integrity】-Professional skepticism
 管理层希望降低审计成本/时间
 管理层不配合或者不希望调查的事项
 公司出现违法问题
 Fraud
 客户违法【provision 等】
 环境污染
 Going concern
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Part A Planning & Risk assessment
Chapter 1 Audit risk
审计风险通常的答题范围
 Ethics ×
 Money laundry/Fraud ×【通常不提及，可以考虑内控不好，可能导致财报出错或 mgt integrity】
 New client √【Detection risk+ opening balance】
 Significant component√【重要组成部分+对组成部分审计师的了解】-集团审计具体学习
 Subsequent event √【Adjusting/non-adjusting event】
 Going concern √【有不确定性时的披露问题】
 Compliance √【Provision/contingent liability】
 管理层阻挠 √【mgt integrity-professional skepticism】
1. 准则带来的审计风险
 收入或具体准则带来的风险
 每个科目一般最高 3 分（个别科目 4-5 分）
 Trend 或其他计算额外增加 0.5 分（一般最高 2 分）
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可能导致 Management bias 的情况 (2 分)
Listed entity 结合收入/利润比率增幅，Pressure on good financial
Aiming to achieve to be listed performance, create management bias to overstate
Sell shares to potential purchaser revenue/asset or understate expenses in order to overstate
Incentive scheme profit.
IFRS 15 Revenue from Contracts with Customers-FA, FR, SBR

1. 在义务未履行就确认收入
Revenue is recognised when a performance obligation is satisfied by transferring a promised
good or service to a customer
Non-refundable deposit
Dr Cash
Cr Deferred income（不能记入 revenue）
提供服务后
Dr Deferred income
Cr Revenue
审计关键点
提前确认收入-高估 revenue
2. Sales with return basis 附有退货条款的销售

The company should recognise a provision (refund liability) for goods which are expected
to be returned.
收到款项时，预估 5%可能退货情况，并及时记录为负债
正确做法错误做法
Dr Cash Dr Cash
Cr Revenue 95% Cr Revenue 100%
Provision(Refund liability) 5%估计可能退回的部分
当退货时限到期，尚未退货时
Dr Provision (Refund liability)
Cr Revenue
审计关键点
 未及时记录 refund liability-高估收入，低估 refund liability
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3. Warranties 附有质量保证条款的销售
If customer has the option to purchase a warranty separately, treat as a separate
performance obligation【如果可以单独购买，则单独记录】
Dr Cash/Trade receivable
Cr Revenue【商品】
Revenue【质保-单独记录】
If customer does not have the option to purchase a warranty separately, account for the
warranty as provision or contingent liability 【如果不能单独购买，则记录 Provision/
Contingent liability】
Dr Cash/Trade receivable
Cr Revenue
Dr Expense
Cr Provision
或对 Contingent liability 进行披露
审计关键点
 质保-未及时记录 Provision-低估 Provision
4. Principal vs agent【主要责任人 vs 代理人】-2023 年 3 月考到

If the entity controls the specified goods or service before transfer to a customer, it is a
principaland revenue recognised should be the gross amount of consideration.【企业在向客
户转让商品前能控制该商品的，该企业为主要负责人，应按以后的总对价为收入】
If the entity arranges for goods or services to be provided by the other party, it is an agent
and revenue recognised should be the fee or commission earned. 【企业在向客户转让商品
前不能控制该商品的，仅为商品或服务提供安排，该企业代理，只能按佣金或手续费确认收
入】
审计关键点
 明明是代理人，却没有按服务费确认收入，eg：互联网平台卖游戏币，京东非自营产品-高估
Revenue
5. Consignment arrangements【委托代售】
Goods are delivered to a third party for sale to end customers . The third party does not obtain
control of the product at the delivery date . The inventory remains in the accounting records of
the seller and revenue is not recognised until control of the product passes to the
customer.【货物交付给第三方销售给最终客户。第三方不能在交货日期取得对产品的控制
权。库存保留在卖方的会计记录中，直到产品的控制权转移到客户手中，收入才得到确认。】
审计关键点
 在商品没有交付给最终客户时就提前确认收入-高估 Revenue
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例题 2020 Sep/dec Q1 a)
You are assigned to the audit of the Crux Group (the Group), which has a financial year ending 30
September 20X5, and is a listed entity. Pegasus & Co was appointed auditor to the Group in January
20X5.
Group operations The Group operates cruises under three brands which offer passengers a variety of
cruise itineraries with a wide choice of destinations. Cruises typically last for two weeks, though some
last for up to six weeks.
Note 1
Revenue includes passenger ticket sales, which accounts for approximately 85% of revenue. When
customers book a cruise they are required to pay a refundable 20% deposit, which is initially recognised
as deferred revenue. The balance of 80% is paid at least six weeks before the cruise commences and at
that point it is also recognised as deferred revenue. The full amount of the ticket price is transferred to
revenue when the cruise starts irrespective of the duration of the cruise.
Solution：
趋势分析+Management bias
Group revenue is projected to increase by 14% (764/670-1) (0.5 分) in the year, besides, this is a big
increase, as the group is listed, there will be pressure for company to show good financial
performance and create management bias to overstate revenue in order to overstate profit. (2 分)
收入比例增加结合上市公司-management bias
违背会计准则
The cruise lasts from two to six weeks, however, the full amount of the ticket price is transferred to
revenue when the cruise starts irrespective of the duration of the cruise(案例信息), this may not be in
line with the principles since the duration of the cruise may take long period and revenue can only
be recognized when the performance obligation is satisfied(准则要求并指明问题), otherwise, there
is a risk that revenue would be overstated and liability/deferred income would be understated(科目影
响). (3 分)
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6. 一个合同牵扯多项内容：
With a multiple-element contract, the elements of the contract should be accounted for
separately and the revenue from the contract should be allocated to each component in
proportion to the stand-alone selling price of the good or service.
 时点不同时需要分别确认：
Revenue should be recognized by different services and recognize separate revenue
after each performance is provided. 多项内容必须在提供服务后再分别确认收入（合计
一起确认收入有可能导致收入高估）
审计关键点
 不同金额的合同没有进行拆分，导致收入分类错误
 不同时点的合同没有拆分，导致收入高估
7. 工程合同收入的确认(预计有收入)
For long-term contract, the revenue should be recognized by appropriate method over the
period.
Completion percentage(progress %):
 Input method (eg: input cost)
 Output method（eg: value of work-price）
Revenue should be recognize =Contract price * progress %
成本确认原则：按实际成本确认(而不是按完工百分比进行确认)。
$
Revenue (Total price * progress %-previously recognised) X
Cost of sales (Cost incurred) (X)
Profit/(loss) for year X/(X)
审计关键点
 收入是否按比例而不全额进行进行确认-高估收入
 收入%是否合理-上市公司/准备变卖公司股票，高估收入
8. 亏损合同（Onerous contract）
If contracts are expected to be loss-making, the contract is an onerous contract, all of the
loss should be recognized and unavoidable costs of fulfilling the should be recognized as
provision.（亏损需全额记而不是按比例记录）
审计关键点
 没有全额记录损失-provision 低估
9. 保本合同（结果无法可靠估计）
收入按成本的发生来进行确认（实报实销）
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例题 2021 Sep/dec Q1 b)
You are assigned to the audit of Gruber Co, which has a financial year ending 30 September 20X5.
The company was established 15 years ago by Martin Gruber, an engineer who had patented a new type
of machine used in the oil industry. Martin, who is the company's chief executive officer, owns 60% of the
shares in the company with the remainder split equally between his brother and sister, Craig and Iris
Gruber.
Martin is planning to sell his shares and retire from the business. Craig and Iris who are younger than
Martin will retain their shares and their board positions. Initial discussion with a potential acquirer for
Martin's shares began last month.
Exhibit 3
Note 1
Revenue is derived from contracts involving the design, manufacture and installation of machinery to
customer order. Currently, the company establishes all of its customer contracts to contain only one
performance obligation -the successful installation of the machine at the customer's premises.
However, around a quarter of the contracts al so include a three-year support service for the machinery
installed.
Note 2
Operating profit includes a profit of $2.2 million relating to the Argyle contract, details of which are given
in Exhibit 4. This is the full amount of profit estimated to be made on the contract. The company's CFO
suggests that while the company's accounting policy is to use the output method to determine the
completion stage of a contract at the year end, it is appropriate to recognise the full amount of profit on
this contract because the customer has paid in advance.
Operating profit also includes a loss of $700,000 relating to the Johnson contract details of which are
given in Exhibit 4. The loss is determined based on the estimated loss of $840,000 pro-rata over the
number of months completed on the contract by30 September 20X5.
Exhibit 4
Argyle contract
In October 20X4, Gruber Co entered into a significant contract to design construct and install a large
piece of machinery for a new customer, Argyle Co. In October 20X4, it was estimated that the design and
construction of the machine would take 15 months, with installation estimated to take place in January
20X6. The agreed price of the machine is $6 million and Gruber Co will have incurred costs of $2.6 million
in relation to this contract by 30 September 20X5. Based on the project plans. the estimated value of the
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work certified at 30 September 20X5 is $4 million and the estimated cost to complete is $1.2 million. As
noted in Exhibit 3 operating profit includes a profit of $2.2 million relating to the Argyie contract.
Johnson contract
On 1 December 20X4, Gruber Co entered into a contract with Johnson Co to design construct and install
a machine. The contract which will take 12 months to complete, was initially projected to make a profit
of $2.8 million. However, due to cost inflation and errors made in the initial project budget. the contract
is now estimated to make a loss of $840,000.
Solution：
趋势分析+Management bias
The financial information shows that total revenue is projected to increase by 15.4% (75/65-1) (0.5 分)
this financial year. As the company’s chief executive officer owns 60% of the shares and he is planning
to sell his share, there is pressure to show good financial performance and create management bias
to overstate revenue in order to maximize profit. (2 分) 收入增幅+高管准备买股票
Support service
违背会计准则
The company sells around one quarter of its machines under a contract which includes a support service
(案例信息) , with a multiple-element contract, the elements of the contract should be accounted for
separately(准则要求). There is a risk that the revenue relating to the support service is recognised at
the same time as the installation, which could result in revenue being overstated(指明问题及科目影
响). (3 分)
Argyle contract
违背会计准则
For long-term contract, the revenue should be recognized by appropriate method over the period.
Both input or output method is permitted. (准则要求)
In the case, Gruber use output method, which is projected to be $4 million compared with the contract
price of $6 million, giving a percentage completion of 66.7% (0.5 分), the revenue recognized should
be $4m(6m*66.7%)(收入*%)(0.5 分), the incurred cost is $2.6m（实际费用）, so $1.4m (4-2.6) (0.5 分)
should be recognized as profit, however, Gruber recognize $2.2m in full (指明问题), which means profit
is overstated by $0.8m(0.5 分)(科目影响). (3 分) （注：真题答案为旧版答案，以此答案为准）
Johnson contract
违背会计准则
Since contracts are expected to be loss-making, the contract is an onerous contract, then unavoidable
costs of fulfilling the should be recognized as provision. (准则要求) Johnson contract is estimated to
have a loss of $840,000, so all of the loss should be recognized, but Gruber Co only recognize loss
of $700,000 by the basis of month completion is inappropriate(指明问题), this would cause the profit
is overstated by $140,000, so there is risk that loss and provision is understated(科目影响). (3 分)
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10. Reversal of provision/impairment loss on TR or other assets
准则允许冲回，但该情况可能存在操纵利润的风险【无需结合案例信息，直接计算增长率即可
说明】
*Goodwill 减值不允许冲回
11. Sales with discount

 折扣应作为收入的抵减项而不能记入成本（Trade discounts should be offset against
revenue other than recorded as expense）
 可能由于折扣频繁而漏记折扣或者将折扣记错
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IAS 20 Government Grants and Assistance (政府补贴)-FR
1. 收到政府补贴时：
IAS 20 requires government grants to be recognized in profit or loss on a systematic basis over the
periods in which the entity recognizes as expenses the related costs for which the grants are
intended to compensate.
 Grants related to assets

The amount relating to capital expenditure should be deferred on the statement of financial
position, the grant should then be recognised in profit or loss over the periods in which
depreciation expense on the assets to which it relates is recognised.
 Grants related to cost

The amount of the grant relating to costs should be recognised in profit or loss in the same
period as the relevant expenses spend.
收到政府补贴时：
Dr Cash
Cr Deferred income（不能记入 revenue）
提供服务后：
Dr Deferred income
Cr Revenue=Depreciation/expense
2. 可能退款的处理：
If funds are not used in the manner intended by the government, then some or all of the grant
would be repayable. This would mean that a provision or contingent liability should be
recognised.
审计关键点-2021 Mar/Jun Q1 b)√, 2019 Sep/Dec Q1 a)√, 2018 Dec Q1 b)

 收到政府补贴时不能一次性记收入，必须先进入 deferred income，再逐渐转入收入（损益）-
-高估收入，低估 deferred income (liability)
 Repayable grants should be recognized as a provision or contingent liability-低估 provision or
contingent liability
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例题 2021 Mar/Jun Q1 b)
Pale Co has the financial year ending 30 September 20X5 and Pale Co is planning to achieve a stock
market listing within the next two years.
An international development agency has agreed to provide a grant of $20 million to assist Pale Co in its
Farand expansion. on condition that the expansion represents sustainable and ethical business practice.
The grant is provided specifically for training the local workforce and building accommodation for the
workforce in a town near to the rainforest.
The grant is due to be received in September 20x5 and relevant expenditure will commence in November
20X5. Mark York (CFO) is planning to recognize half of the amount received as income in this year's
financial statements, on the basis that it "will cover some of management's expenses in planning the
international expansion".
Projected Actual % change
30 September 30 September
20X5 20X4
Financial key performance indicators: $million $million
Revenue 42.5 40.3 +5.5%
Operating profit 22.0 21.0 +4.8%
Profit before tax 6.5 5.0 +30%
Total assets - $550 million (20X4 - $545 million)
Solution：
Government grant
Government grant should be recognized in profit or loss on a systematic basis over the periods by
the related expense has been spent(准则要求). Mark York is planning to recognize half of the grant
as income this year, but the expenditure for which the grant is specifically provided has not yet
been incurred (案例信息). So the entire government grant should be recognized as deferred income
other than income(指明问题), otherwise, revenue would be overstated and deferred income would
be understated(科目影响). (如果考虑到会导致公司有盈转亏将得到更多专业分，eg: what’s more,
without the 10m, the profit would be decreased from 6.5m to loss of 3.5m, since the Pale Co is
planning to achieve a stock market listing, this would be an earning management technique)
The condition of the government grant is expansion represents sustainable and ethical business
practice(案例信息), if the conditions are not satisfied, the grant may require complete or partial
repayment(准则), then provision should be recognized or contingent liability should be disclosed
(指明问题), otherwise, provision would be understated or inadequate disclosure(科目影响). (4 分-2
个关键点)
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IAS 2 Inventory-FA, FR
1. 初始价值：
Inventories requires that costs included in valuing goods and services should only be those incurred
in bringing inventory to its present location and condition（only include production cost，不包
含 general overheads）.
2. 有减值迹象时（产品滞销，存货天数/水平上升）-2021 Marjun Q1 b)√

Inventory should be valued (measured) at the lower of cost and NRV（Net realizable value）.
Dr Impairment loss (P&L)
Cr Inventory
3. 附有退货期的存货【委托代售-Consignment】
Eg：Contract allows the supplier to require return of the products at any time and the purchaser
can also return the products within a set period of time if they remain unsold.
Since the purchaser has no control over the inventory as the supplier can require unsold
inventory to be returned and purchaser has the right to return the inventory, this means the
inventory remains the property of the supplier until inventories are sold to customer, so
inventory should not be recognised until they are sold to customer. Instead, they should be
recognized as trade receivable.
Dr Trade receivable
Cr Cash
审计关键点：
 初始价值包含 General overhead-高估 inventory
 有滞销（Obsolete）迹象时没有即使进行减值-高估 inventory
 委托代售时，在货物未销售出去时记录存货-高估 inventory
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IAS 16 Property, Plant and Equipment-FA, FR, SBR
1. PPE（单个资产）：
1.1. 初始价值：
 The components of the cost of PPE include the purchase price, imported duties and directly
attributable costs of bring the asset to working condition for its intended use.
应包含采购的初始价值+必要检查成本（Installment cost, Preparation of the site, Testing cost,
Legal cost），不包括后续的维修成本，培训成本(Maintenance, Administration cost, Training
cost)。
审计关键点：
 PPE 初始价值没有按照准则要求进行确认-高估或低估 PPE
1.2. 后续计量：
 Cost model- Carrying value less accumulated deprecation
Dr Deprecation (profit or loss)
Cr Accumulated depreciation
When an item is used cost model, the change of accounting estimate of useful life is
permitted, but the audit team should be skeptical and carefully consider whether the
change is justified. （需关注折旧变更是否合理）
 Revaluation model-Fair value less accumulated depreciation

折旧（根据评估增值结果不断调整）：
得有 active market 才可以使用 revaluation modle
Dr Deprecation (profit or loss)
Cr Accumulated depreciation
年末评估增值-surplus：
Dr PPE-carrying value
Cr Other comprehensive income（其他综合收益 OCI）-不能记入损益表(Profit&loss)
*OCI 属于 Equity 科目（资产负债表项目）而不是损益表科目
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 Cost model 转 revaluation model【本条不适用于会计政策变更】
案例：
某 building 由 cost model 转换为 revaluation model，重估升值一部分计入 revaluation
surplus 和一部分冲回折旧，追溯调整一年
1. 不属于会计政策变更，不可以追溯调整，而是直接把溢价转入 OCI，如果冲回折旧就会
导致费用及利润高估。
2. 考虑 mgt bias，可能冲回折旧就是为了操纵利润。
审计关键点：
 折旧年限是否合理，eg：不同使用年限的都统一用一个时间进行折旧-高估/低估折旧
 年限变更不合理-高估或低估 PPE
 关注使用 Revaluation model 方法是否合适，是否有积极的市场-操作利润及高估 PPE
 重新评估法下价值增值应记入 OCI 而不是 P&L-高估 P&L
 注重评估增值是否过大-高估 PPE
 关注成本法转重新评估法记录方法是否正确
1.3. Impairment【有迹象时进行减值测试 Eg：火灾，检查时发现无法正常使用】

The lower of recoverable amount and carrying value
The recoverable amount（可回收金额）of an asset should be measured as the higher value
of fair value less cost of disposal or value in use
Dr Impairment loss
Cr PPE
审计关键点：
 关注固定资产是否及时减值【具体减值方法后续学习】
1.4. 处置(Disposal) :
Dr Cash/Trade receivable（PV） $1,000
Accumulated deprecation 10,000
Loss of income statement(P&L) $39,000 =50,000-10,000-1,000
Cr PPE (采购发票金额) $50,000
如果处置的过程中对方没有给现金而是给应收-则需要折现【2021 Sep/Dec Q3 b】
Financial Instruments requires receivables such as that arising on sale of the machine to be
recognized initially at fair value and held on an amortised cost basis, so the receivable should
be discounted back to the reporting date.
审计关键点：
 如果收到的是应收账款是否折现-高估应收，低估 Loss
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2. 固定资产由多个重大零部件构成时【飞机/船舶】-2020 Sep/Dec Q1√
 Various components of PPE with significant cost should be recorded as separate
components and depreciated over a specific useful life separately.
Eg: ship in use 不可以直接整体计算折旧，必须拆成不同的零部件在根据使用年限折旧
审计关键点：
 直接按整块进行折旧，而没有分成重大组成部分-高估/低估折旧
3. 固定资产的更新及翻修-refurbishment（Maintenance & repairs）-2020 Sep/Dec Q1√

 Modernization costs(现代化成本) which give rise to enhance future economic benefit should
be capitalized, whereas costs which do not create future economic benefit should be
expensed.
审计关键点：
 更新及翻修要根据情况进行资本化或费用化，不能全部资本化-高估 PPE
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IAS 40 Investment Property (投资性房地产)-SBR
1. 投资性房地产的范围：
An investment property is land or buildings held to earn rentals (租) or for capital appreciation
（资本增值-后续卖）.
不属于投资房地产的情况
Property intended for sale in the ordinary business（用于销售） Inventory
Owner-occupied property（自用） PPE
一年内准备出售的 building 或 factory Held for sale
2. 购入型投资性房地产确认方式
初始计量：
 An investment property should be measured initially at its cost.
假设购入投资性房地产花费 1000w
Dr Investment property (Purchase cost) 1000w
Cr Cash/Trade payable 1000w
后续计量：
 An entity can use either the cost model or the fair value model to measure the investment
property, and whatever policy it chooses, it should apply to all of it investment property.
 Cost model
When the cost model is used, it should depreciation over its period (与 PPE 折旧方式一
致).
 Fair value mode (不再折旧)

When the fair value model is used, the gain or loss is recognized in profit or loss (计入
当期损益-公允价值变动损益，而不是 other comprehensive income).
假设购入价值 1000 万，年末评估价值 1200 万

Dr Investment property (Purchase cost) 200w
Cr Profit & loss (Gain-Other income) 200w
Gain=1200w（评估价值）-1000w（购入价值）=200w
3. 从 PPE（cost model）转入 investment property（fair value model）：

 On transfer of an owner-occupied property recognised at depreciated historical cost, to
investment property carried at fair value, any resulting increase in the carrying amount should
be recoginised in other comprehensive income as a revaluation surplus, any further increase
in fair value is recognized in profit or loss for the year.
转入时出现的评估增值计入其他综合收益, 后续变动计入当期损益.
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Eg：
转入时（假设 PPE 账面价值 800w(初始价值-累计折旧)，转入时评估价值 1000w）：
Dr Investment property 1000w
Cr PPE 800w
Other comprehensive income (Revaluation surplus) 200w
Revaluation surplus=1000w-800w=200w
*评估增值属于 OCI 而不是 P&L 主要目的就是为了防止企业操纵利润。
后续年末价值升值至 1500w
Dr Investment property 500w
Cr Profit & loss (Revaluation surplus) 500w
Revaluation surplus=1500w-1000w=500w
审计关键点：
 确认投资性房地产分类正确，没有把存货或自用房地产错误分类至投资性房地产-高估投资性
房地产
 Fair value 增值是否过大-高估投资性房地产-2021 Sep/Dec Q1 b)√
 从 PPE 转入 IP 是否把所有溢价都计入 p&l-高估 p&l，低估 OCI
*PPE 及 Investment property 都使用 Asset register（资产登记簿）来进行初始价值，折旧，价格变

动等会计记录
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例题 2021 Sep/Dec Q1 b)
of machine used in the oil industry. Martin, who is the company's chief executive officer, owns 60% of the
shares in the company with the remainder split equally between his brother and sister, Craig and Iris
Gruber.
Martin is planning to sell his shares and retire from the business. Craig and Iris who are younger than
Martin will retain their shares and their board positions. Initial discussion with a potential acquirer for
Martin's shares began last month.
Exhibit 4
Investment property
In October 20X4, following the completion of a significant contract, the company purchased an
investment property the Nakatomi building for $15million. The property is a retail development in the
country's capital city. The company is going to appoint an expert to provide a valuation of the property
and an initial estimate of the increase in fair value of $2 million has been included in the company’s
financial projections to 30 September 200X5.
Solution:
Investment property
It is permitted to use fair model for investment property, and if the fair value model is used, gains or
losses arising from changes in the fair value of investment property must be included in profit or loss.
(准则要求) However, the increase in fair value represents 13.3% (2/15) (0.5 分)of its purchase cost
for only 12 months, since the expert has yet to be performed (案例信息), since Martin is planning
to sell his shares, it may indicate that it is management bias to boost profit(职业怀疑), so there is
the risk that investment property and profit is overstated (科目影响). (3 分)
【*此处也可以质疑 Nakatomi building 是否应该计入 Investment property】
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IAS 23 Borrowing Costs-SBR
Borrowing cost:
可以资本化，也可以费用化（Finance charge）。
1. 可以资本化的情形：
If borrowing costs that are directly attributable（专款专用） to the acquisition, construction
or production of a qualifying asset（符合资本化条件的资产） can be capitalizes as part of
the cost of the assets.
A qualifying asset is an asset which takes a substantial period of time to get ready for its
intended use or sale. 需要一定时间建造的资产（类似于在建工程）【对于购买的固定资产的
相关利息不可以资本化】
2. 资本化利率的确认
The capitalization rate is the weighted average of the borrowing cost applicable to the
entity unless borrowings made specifically to obtain a qualifying asset.
 Funds borrowed specifically for a qualifying asset （专项借款）
Actual borrowing cost-investment income（实际借款利息-投资收益）
 Funds borrowed generally （一般借款）
Weighted average of the borrowing cost（加权的借款成本）
Dr PPE (*专门借款利息)
PPE (*公司加权的借款成本)
Finance charge （不符合条件的利息）
Cr Cash
Eg:公司有某个工程，建造周期为 6 个月，公司将全年的借款利息资本化了。
 建造周期 6 个月，符合 qualifying asset
 建造期只有 6 个月，利息不能按全年资本化。
审计关键点：
 利息是否符合资本化条件-全额资本化可能会高估相关固定资产的价值
 是否把应该资本化的利息费用话-低估固定资产价值-2020 Sep/Dec Q1 a) √
 资本化的利率是否合理-高估或低估相关固定资产价值
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IFRS 9 Financial Instruments
1. 零借款利率但还款时有溢价的处理方式：
The finance cost associated with a deep discount should be amortized over the term of the
loan, and an effective interest rate (such as weighted average cost of capital) should be
calculated to allocate the premium to be paid on maturity over the life of the loan.
借款溢价需使用有效利率（比如加权平均的借款成本）在借款的周期中进行分摊
Eg:
2021 年公司获得借款$30m, 借款利率为 0 (not bear interest)，但 10 年后续一次性支付
$34m(repayable at par value of $34m).- 2018 Dec Q1 b)
借款时初始价值：
Dr Cash $30m
Cr Loan(现值) $30m
后续计量 (每年记录，直到到期)
Dr Finance cost (Interest expense) $XX 通过 Effective interest rate 进行计算
Cr Loan $XX
到期还本
Dr Loan $34
Cr Cash $34
审计关键点：
 由于合同显示 0 利率，公司可能未考虑实质大于形式，从而未记录利息费用-低估利息费用
 被审计单位虽然记录利率，但有效利率未使用加权的利息成本（有效利率不合理）-高估或低
估利息费用
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IAS 38 Intangible Asset-FA, FR
初始计量：
1. 外购无形资产(License-特许经营权, brand-商标, patent-专利, customer list 客户清单)
An intangible asset is recognized in the F/S if it meets the definition of an intangible asset, if it is
probable that the future economic benefits will flow the reporting entity, and its cost can be
reliably measured.
1.1 不能被资本化的情形
Advertising and promotional costs must not be recognized as intangible assets and must be
expensed 广告费不可以资本化为无形资产
Internally generated goodwill/brand/customer list should not be recognized as an asset. 内
部形成的商誉/商标/客户清单不可以确认
原因：
 Whether there is an identifiable asset will bring expected future economic benefit
 It is difficult to determining the cost of asset reliably
2. 自己研发的无形资产（R&D）
Research costs must be expensed and development costs are capitalized only after technical
and commercial feasibility and an intention and ability to complete the development and that
it will generate future economic benefits.
Dr Intangible asset (防止全部记入 IA)
Research expense
Cr Cash/Trade liability
PIRATE 原则
P Probable future economic benefit
I Intension to complete
R Resources adequate and available to complete
A Ability to use/sell the asset
T Technical feasibility
E Expenditure can be measured reliably
审计关键点：
 是否符合资本化条件-不符合有可能高估
1.2 固定资产中包含无形资产的，无形资产应该与固定资产单独列示并摊销
审计关键点：
 确认固定资产与无形资产分别列示-否则会高估固定资产，低估无形资产并影响折旧/摊销
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后续计量：
 Finite life (有限使用年限)
Cost model- Amortization Revaluation model-2018 Mar/Jun Q1 a)
Fair value less accumulative amortization
Dr Amortization Dr Intangible assets
Cr Accumulated amortization Cr OCI (uplift)
有减值迹象时进行减值测试【eg：政府赎回特许经营权】
 Recoverable amount =Higher of value in use, fair value less disposal
 Indefinite useful life (无限使用年限)

每年进行减值测试，发生减值时
Dr Impairment loss
Cr Intangible assets
审计关键点：
 对于需要摊销的，摊销年限是否合理-高估或低估 IA
 使用 Revaluation model 是否合理-高估 uplift of revaluation
 当公司将无形资产列入无限使用年限时，要考虑其合理性-高估 IA
 对于需要无限使用年限的，是否每年都进行减值-有可能高估 IA
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例题 2018 Sep Q1 a)
Eagle Group (the Group) has a financial year ending 31 December 20X8.
Note 2:
Other intangible assets relates mostly to software and other technological development costs. During
the year $35 million was spent on developing a new IT system for dealing with customer enquiries and
processing customer orders. A further $20 million was spent on research and development into robots
being used in warehouses, and $5 million on developing new accounting software. These costs have
been capitalised as intangible assets and are all being amortised over a 15 year useful life
Solution:
Intangible assets
Under the standard, development costs are capitalised only after technical and commercial feasibility
of the software, besides, whether the company has the intension and the ability should be considered,
if any of the conditions are not met, the amount should be expensed (准则要求), ,in this case, whether
there is feasible technology to complete should be investigated（案例）, so if all the expenditure is
capitalized, there is risk that the intangible asset would be overstated(科目影响).
It seems that the same useful life of 15 years has been applied to all of the different categories of
intangible assets for amortization; this is not likely to be specific enough (案例信息). As some
intangible assets may be shorter than 15 years (指明问题), there is a risk that intangible assets are
overstated and operating expenses understated (科目影响).(4 分-2 个关键点)
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练习 2018 Mar/Jun Q1 a)
The Bassett Group (the Group) is a publisher of newspapers and magazines, academic journals, and
books. The Group, a listed entity, has a financial year ending 30 April 2018, and your firm, Whippet &
Co, was appointed as Group auditor in September 2017. Whippet & Co will audit all Group companies
with the exception of Borzoi Co, a foreign subsidiary, which is audited by a local firm of auditors, Saluki
Associates.
Borzoi Co
Borzoi Co is located in Farland, to help with the company’s development of language translation
operations, on 1 May 2017, Bassett Co, the parent company of the Group, transferred a piece of
translation software to Borzoi Co. The software had been purchased by the parent company for $1.5
million several years ago and prior to transfer to Borzoi Co, it was held at a carrying amount of $1
million, this being its cost less amortisation to date. Immediately prior to being transferred to Borzoi Co,
the software was revalued in the parent company’s financial statements to $5.4 million, this being its
estimated fair value at the time of the transfer. The estimate of fair value was determined by Group
management, and this amount is still outstanding for payment by Borzoi Co.
Solution：
Software revaluation
The fair value of software was recognized in the parent company accounts immediately prior to the
transfer of the asset was determined by Group management(案例信息), although the revaluation is
permitted(准则要求), the revaluation of uplift is $4.4m, 440% (4.4m/1m) of its carrying value(0.5 分),
besides, as it is related party transaction and the Group is listed, there is motivation for
management to overstate assets(案例信息+指明问题).
So there is audit risk the revaluation of software is inappropriate and intangible asset is overstated.
(科目影响) (3 分)
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IFRS 3 Goodwill-SBR
Goodwill-产生与并购过程中（内部形成的 goodwill 不能确认），列式在母公司合并报表中
初始计量：
 Purchased goodwill arising on consolidation is retained in the statement of financial position as
an intangible asset.
平时单体报表中不记录，合并后，列式在母公司合并报表中
Goodwill 的计算 (Initial measurement of acquisition)- 2018 Sep Q1 a) √

$m
①Purchase consideration Cash consideration 80
(Should reflect the fair value of
Contingent consideration 要折现获得
total consideration paid and 20
【discount rate 可能不合适】
payable)
 Listed company: Share price at the date
②Non-controlling interest (NCI-
of acquisition
少数股东权益) 50
 Non-listed company: Valuation report）
-Fair value
【可能不公允】
③Total value=①+② 150
④Identifiable net assets on DOA
Due diligence report (尽职调查报告) 【可能
(Date of acquisition) (30)
不公允】
-Fair value
Goodwill（premium）=③-④ 120
后续计量：
 It must be reviewed annually for impairment-2018 Sep Q1 a) √
以下为合并报表分录：
Dr Impairment loss
Cr Goodwill
审计关键点：
 初始计量是否准确-高估或低估 goodwill
- Purchase consideration 是否合理，Contingent consideration 是否已折现，折现率选择的是
否合理
- NCI 的价值是否合理
- Identifiable net assets 的公允价值是否合理，日期是不是正确(必须使用 DOA)
 是否每年都进行减值测试-高估 goodwill
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例题 2018 Sep Q1 a)
Eagle Group (the Group) has a financial year ending 31 December 20X8. The Group, which is a listed
entity, operates in distribution, supply chain and logistics management. Its operations are worldwide,
spanning more than 200 countries.
Note 1.
Goodwill
Goodwill relates to the Group’s subsidiaries, and is tested for impairment on an annual basis.
Management will conduct the annual impairment review in December 20X8, but it is anticipated that no
impairment will need to be recognized this year due to anticipated growth in revenue which is forecast
for the next two years. In March 20X8, the Group acquired an 80% controlling shareholding in Lynx Co, a
listed company located in a foreign country, for consideration of $351 million. Management’s
determination of the goodwill arising on this acquisition is shown in Exhibit 4
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Notes:
1. The contingent consideration will be payable four years after the acquisition date and is calculated
based on a payment of $525 million, only payable if Lynx Co reaches revenue and profit targets
outlined in the purchase documentation. The amount included in the goodwill calculation has been
discounted to present value using a discount factor based on an 18% interest rate (weighed average
cost of capital is currently 10%).
2. The non controlling interest is measured at fair value, the amount being based on Lynx Co’s share
price on 1 March 20X8.
3. The assets and liabilities acquired and their fair values were determined by an independent firm of
Chartered Certified Accountants, Sidewinder & Co, who was engaged by the Group to perform due
diligence on Lynx Co prior to the acquisition taking place. A fair value uplift of $12 million was made
in relation to property, plant and equipment.
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Solution：
Goodwill
Analytical review shows that the goodwill figure has increased by $130 million during the year. The
goodwill relating to the acquisition of Lynx Co is $100 million according to management’s calculations.
Therefore there appears to be an unexplained increase in value of goodwill of $30 million during the
year and there is an audit risk that the goodwill figure is overstated.【财报趋势与 Note 金额对不上-
考试过程中可以使用的一个得分 tips】
Goodwill should be subject to an impairment review on an annual basis (准则要求) and since the
revenue has decreased this year, the management's view of further growth in revenue is may be
too optimistic (指明问题)and the impairment test should be performed this year, otherwise, goodwill
would be overstated(科目影响). (3 分)
Initial measurement of goodwill arising on acquisition of Lynx Co(goodwill 的具体计算)

The risk of accuracy of goodwill should be considered since there are various components in the
calculation.
First, the interest rate used to calculate the present value of contingent consideration is 18% – this seems
high given that the Group’s weighted average cost of capital is stated to be 10% (指明问题), this would
understate the considerate and cause goodwill to be understated(科目影响).
Second, the fair value of Lynx Co’s net assets according to the goodwill calculation is $300 million, having
been subject to a fair value uplift of $12 million. (案例信息) This was provided by an independent firm
of accountants which should be evaluated his objectivity and competence (指明问题), otherwise, there
is a risk that the goodwill would be understated (科目影响). (4 分-2 个关键点)
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IAS 36 Impairment-FR, SBR
1. 什么时候需要做 impairment test

1.1. Goodwill (or indefinite intangible assets)- 2018 Sep Q1 a) √,2020 Mar Q1 a) √
Goodwill (or indefinite intangible assets) should be tested annually for impairment
regardless of whether indicators of potential impairment exist.
 母公司收入或利润下降，需要考虑减值
 母公司经营很好，但是子公司利润下降或出现亏损也需要考虑减值
Goodwill 减值时是放在 Cash generating unit【资产组 CGU】，这个资产组其实就是并购的子

公司，减值后，减值顺序为先将减值计入 goodwill，在将剩余的按比例计入其他资产。
A cash generating unit the impairment should firstly be allocated against goodwill and then
be allocated against the remaining assets on a pro-rata basis.
1.2. PPE/ Intangible asset (finite life)

The management should consider whether there are indicators of impairment and if
necessary, perform an impairment review. 有减值迹象时（eg：收入下滑，特许经营权被收
回），进行减值测试
license impairment loss-2020 Sep/Dec Q1 a)
2. 如何确认 impairment loss

The recoverable amount（可回收金额）of an asset should be measured as the higher value
of ($9m):
a) The asset’s fair value less cost of disposal (公允价值减处置费用后的净额)-$9m
Cost of disposal: legal cost, costs of removing asset and direct incremental cost, exclude
finance cost.
b) Its value in use (在用价值-资产预计未来现金流量净额)-$8m
Value in use is measured as the present value of estimated future cash flow generated
by the assets (PV of future cash flows)
The cash flow projections which used to determine the value in use should related to the
asset in its current condition, expenditures to improve or enhance the asset’s
performance should not be anticipated
计算在用价值时必须基于资产当前状况，不考虑更新后的状况-2019 Mar/Jun Q1 a) √
Recoverable amount
=Higher of
Fair value less

Value in use
costs of disposal
Impairment loss=Carrying value($10m)-Recoverable amount (higher of $9m&$8m)=1m

Dr Impairment loss 1m
Cr PPE/IA/Goodwill 1m
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审计关键点：
 检查是非按时进行减值：Goodwill or indefinite intangible assets should be tested annually-高
估 Goodwill/IA
 检查可回收金额是否合理-高估或低估相应资产
关注 fair value less cost of disposal 是否合理（eg：资产已经坏掉了，怀疑为什么还有 fair
value）
关注 value in use 价值是否正确：
- The cash flow projections which used to determine the value in use should related to the
asset in its current condition
- Using an appropriate discount factor reflecting current market assessment
例题 2019 Mar/Jun Q1 a)
Margot Co. has a financial year ending 30 June 20X9.
Exhibit 2
Factory damage
One of the company’s several factories, used to process fruit and produce fruit juice, was damaged in
August 20X8 when a severe storm occurred. High winds destroyed part of the factory roof, and heavy
rain led to flooding and damage to machinery and processing equipment. The factory has not operated
since the storm, and the finance director has performed an impairment review on the building and plant
and equipment; details of the impairment review are given in the extract from the management accounts
(Exhibit 4).
Exhibit 4
Note As at 30 June 20X9 As at 30 June 20X8
Projected Actual
$’000 $’000
Property, plant and equipment 2 6,150 6,470
Total assets 12,500 11,900
Profit before tax 2,100 1,000
Note 2
Property, plant and equipment
The carrying amount of $6.15 million includes $880,250 relating to the storm-damaged factory (referred
to in Exhibit 2) and its fixtures and fittings. The factory is a cash-generating unit for the purpose of
impairment testing. The finance director has provided a summary calculation, detailing the following
impairment review which indicates that an impairment loss of $210,250 needs to be recognized:
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The fair value less costs to sell has been estimated based on the sales proceeds which could be generated
from selling the damaged machinery. The value in use is estimated based on the future sales which could
be generated if the damage to the building is repaired and new machinery is put into the factory. The
company is planning on carrying out the restoration and buying new machinery, at a total estimated cost
of $450,000. This amount has been provided for within current liabilities, with a corresponding entry
accounted for as a prepayment.
【The fair value less costs to sell 是根据销售损坏机器可能产生的销售收入估算的。Value in use 是根

据将来的销售额估算的，如果建筑物的损坏得到修复，新的机器投入工厂，就可能产生销售额。该公
司正计划进行修复并购买新机器，总成本估计为 45 万美元。这笔款项已在流动负债记录为
provision，并记入相应的分录作为预付款项。】
Solution:
The damage to the factory has triggered an impairment review, and the recoverable amount is the
higher of value in use and fair value less costs to sell the asset(案例信息+准则要求).
But value in use should base on the cash flow in its current condition(准则要求), so the assumption
that the building is repaired and new machinery purchased should not be included (指明问题),
otherwise, there is a risk that the impairment loss is understated, and the asset is overstated(科目影
响). 【计算在用价值时必须基于资产当前状况，不考虑更新后的状况】
There is also a risk that the fair value less cost to sell is overestimated, since the factory is factory and
machinery needs to be completely replaced, the value of $135,000 may be estimated to optimistic(指
明问题), so there is a risk that the impairment loss is understated, and the asset is overstated(科目影
响)(4 分-2 个关注点)
Provision for restoring the damaged factory and acquiring new machinery
The Eagle Co includes a provision for repairing the factory and buying new machinery (案例信息),
however, only present obligation as a result of past event can be recognized as provision or
contingent liability(准则要求), however, the company is not contractually obligation to repair the
damage, so there is no need to recognized as a provision or prepayment(指明问题), otherwise,
current liability and prepayment will be overstated(科目影响). (3 分)
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IFRS 5 Non-current assets held for sale (持有待售资产)-SBR
1. 什么情况下分类至 held for sale (HFS)-属于 Current assets

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying
amount will be recovered principally through a sales transaction rather than through
continuing use.
1) Available for immediate sale in its present condition (可立即销售)
2) The sale must be highly probable (出售极可能发生):
a) management is committed to a plan to sell and doesn’t intend to revoke its selling
plan
b) the asset is available for immediate sale
c) an active programme to locate a buyer is initiated
d) It is probable that the asset will be sold within 12 months
e) Asset is quoted at a reasonable price
2. 初始价值
Valued at lower of cost or fair value less costs to sell
An entity should classify a non-current asset (or disposal group) as held for sale, it is written
down to fair value less costs to sell (if less than carrying amount), any impairment loss is
charged to profit or loss 重分类前要先做减值测试，减值损失计入损益表。
Dr Held for sale-(PPE/IA/Goodwill)

Impairment loss(P&L)
Cr Non-current asset
3. 后续计量-2019 Sep/Dec Q1 a) √
 The assets should not be depreciated/amortized after reclassification. (不再折旧)
 Any subsequent changes in fair value less costs to sell are recognized as a further
impairment loss. (后续再减值迹象的需要进一步进行减值测试)
 Impairment loss=Old NRV-New NRV
Dr Impairment loss (P&L)

Cr Held for sale-(PPE/IA/Goodwill)
审计关键点：
 一年内处置的是否及时计入 HFS-eg：公司才买入某个商铺，没有想好用途，可能在一年内抛
售（不属于 Investment property，而属于 HFS）-低估 HFS
 是否符合 Held for sale 的确认条件-高估 HFS
 初始价值是否计算正确，如有减值，减值损失是否分摊正确-高估 HFS
 折旧是否已终止-低估 HFS
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IFRS 5 Discontinued operation (终止经营)-SBR
1. Discontinued operation (DO)确认条件：

A discontinued operation is defined as a component of an entity（能够单独区分的组成部
分） which either has been disposed【已经被处置】 of or is classified as held for sale【持有
待售】, and
a) represents a separate major line of business（独立的主要业务）or a geographical area
of operations（主要经营地区-eg：中国区或日本区业务）.
b) is a subsidiary（子公司）acquired exclusively with a view to resale
2. 处理方式：
参照 held for sale
3. Disclosure-2019 Sep/Dec Q1 a) √：
 Detailed disclosure of revenue, expenses, pre-tax profit or loss and related income taxes is
required distinct from continuing operations 在附注上详细披露收入、支出等情况
审计关键点：
 列报是否正确
范例：
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例题 2019 Sep/Dec Q1 a)
Ryder Group (the Group) has a financial year ending 30 September 20X5. The Group, a listed entity,
operates in the hospitality sector, running restaurants, coffee shops and hotels.
Group restructuring
Partly to provide some of the finance needed for the restructuring, and partly because of its declining
revenue, the Group is planning to dispose of Primal Burgers Co. The board approved this disposal in
March 20X5. Vendor’s due diligence has been carried out by Usami & Co, a firm of Chartered Certified
Accountants. Usami & Co conducted an independent review of the company’s financial position and
future prospects and produced a report on their findings, which is made available to potential buyers. At
today’s date, several potential buyers have expressed an interest and the Group expects that the disposal
will take place just after the financial year end.
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Solution:
Held for sale
The Group is planning to dispose of Primal Burgers Co and the board approved this disposal in March
20X5 (案例信息), since it is probable that the asset will be sold within 12 months, if the planned
disposal is highly probable, a disposal group of assets should be classified as held for sale, then it
should be measured at the lower of carrying amount and fair value less costs to sell (准则要求), if
impairment loss is not recognized, there is a risk that held for sale is overstated (指明问题+科目影响).
Besides, the assets should not be depreciated after reclassification(准则要求), if assets are continued to
be depreciated, then held for sale is understate(指明问题+科目影响). (4 分-2 个关键点)
Discontinued operation
A discontinued operation is defined as a component of an entity which either has been disposed of
or is classified as held for sale, and represents a separate major line of business or a geographical
area of operations. (准则要求) Given the materiality of Primal Burgers Co and its products being a
separate line of business for the Group, it meets the definition of a discontinued operation(案例信
息), then detailed disclosure of revenue, expenses, pre-tax profit or loss and related income taxes is
required(准则要求). There is risk is that the necessary disclosures are not made adequately(科目影
响). (3 分)
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IAS 37 Provisions, Contingent Liabilities and Contingent Assets-FA, FR, SBR
1. Provision
A provision should be recognized if there is a present obligation as a result of a past event,
and there is a probable outflow for which a reliable estimate can be made.
If the time value of money is material, the amount of a provision should be the present value
and the cash flows for the repayment of the fine should be discounted by an appropriate
rate (A pre-tax rate which reflects current market assessments of the time value of money and
the risks specific to the liability) 【当时间价值重大时，需折现】
常见的情况(通常不折现)
 Legal sue
 Redundancy
 Warranty
特殊情况（需要折现）
 需多年支付的赔款 (Fine/Penalty)
 终止费用 (Decommission cost)
Dr Expense
Cr Provision (罚款如果在未来 1-2 年支付，直接根据预估金额记入，需要在未来多年支付时，
需要折现)
不能确认为 provision 的情况

 Estimated repair cost (not contractually obligation)-2019 Mar/Jun Q1 a)√
2. Contingent liability
A contingent liability should be disclosed of there is a possible, rather than probable, outflow
of economic benefit.不记账，披露即可
3. Contingent asset (可能收到的保险赔款)

A possible asset that arises from past events and whose existence will be confirmed by the
occurrence of one or more uncertain future events not wholly within the entity’s.
A contingent asset should not be recognized but should be disclosed where an inflow of
economic benefit is probable.
 如果非常非常肯定(virtually certain)-正式确认书（formal confirmation）

Dr Trade receivable
Cr other income
 很可能受到（Probable）-Contingent asset
Contingent asset should not be recognized in financial statement, but the disclosure should
be made. (或有资产不在财报中确认，只进行披露)
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审计关键点：
 满足确认条件而公司未记录-eg：打官司-低估 Provision/contingent liability-2021 Mar/Jun Q1
b) √, 2020 Mar Q1 a) √
 虽然记录 Provision，但金额预估不合理-高估或低估 Provision/contingent liability
 罚款需要在未来多年支付时，未进行折现或现金流/折现率不合理-2019 Mar/Jun Q3 b) ii)
 考虑是否满足过去事项的现时义务及付款的可能性-不符合可能高估 provision/contingent
liability-eg：repair cost 就不符合要求-2019 Mar/Jun Q1 a) √
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例题 Pre-Sep 2022 Mock
It is 1 July 20X5. You are a manager in the audit department of Dumont & Co, a firm of Chartered
Certified Accountants. You are assigned to the audit of Bransfield Co which has a financial year ending
30 September 20X5. Your firm has been responsible for the audit of Bransfield Co for the last four
years.
In June 20X5, three hotels situated near a major river were severely damaged by a flood. All of the
hotels, which were constructed by Bransfield Co only two years ago, need extensive repairs and
refurbishment at an estimated cost of $15 million, which has been provided in full and recognised
within operating expenses. All of the buildings are insured for damage caused by flooding. The repair
work is expected to commence in August 20X5 and be completed in December 20X5. The hotels are
currently closed whilst the repairs are undertaken and it is expected that they will reopen in January
20X6. Management have not performed an impairment review of these properties as they are due to
be repaired within the next six months.
Financial information
Projected Actual
Notes
30 September 20X5 30 September 20X4
$million $million
Revenue 890 713
Operating expenses 1 (835) (690)
Other operating income 2 135 10
—— ——
Operating profit 190 33
Finance charges (45) (43)
—— ——
Profit/(loss) before tax 145 (10)
—— ——
Property, plant and 1,265 1,135
equipment
Deferred tax asset 3 285 335
Total assets 2,870 2,230
Notes:
1 Significant items included in operating expenses:
20X5 20X4
$m $m
Share-based payment expense 14 –
Damaged property repair expenses 15 –
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Solution
Provision for repair costs
A provision cannot be made for future costs unless there is a constructive or legal obligation (准则要
求), but repair and refurbishment cost are not constructive or legal obligation, so they should not
recoginized in full as provision. Any costs incurred in August and September 20X5 should be
expensed in the current year financial statements. Any expected costs to be incurred after the year
end should be recognised in next year’s financial statements, (结合案例信息的会计处理) otherwise,
operating expenses and provision liabilities will be overstated (科目影响). (3 分)
Impairment of flood damaged hotels

Management have not performed an impairment review of these properties because they are due
to be repaired within the next six months. (案例信息)
The hotels will have suffered a reduction in value in use as the hotels are closed and cannot be used
due to their extensive damage(案例信息), the recoverable amount may have been below the
carrying amount, so an impairment review should be performed and impairment loss should be
recognized (准则要求及结合案例信息的会计处理), otherwise, there is a risk that the property are
overstated and expenses understated(科目影响). (3 分)
Insurance claim for repair costs

The buildings are covered by an insurance policy, which will pay out for repair and refurbishment
costs to the assets(案例信息). Although there is no formal confirmation has been given by the
insurance company, if the claims is deemed probable then a contingent asset should be disclosed
(结合案例信息的会计处理), so there is a risk that adequate disclosure of the contingent asset is not
made (科目影响). (3 分)
(此处可以质疑是否公司已经记入 other receivable 或者如果概率不是 probable，可能 contingent
asset 也不能确认)
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IAS 10 Events after the reporting date-FA, FR
 Adjusting events:
An entity should adjust the amounts recoginsed in the financial statements to reflect adjusting
events after the reporting period.
常见情况：
 Cash difficulties of main clients 主要客户期后现金困难-重估应收账款
 Obsolete of inventory 存货期后估值调整-重估存货价值
 Resolution of court case 未决法律诉讼-重估准备
 Non-adjusting events【通常在财报之后，审计报告之前】:
An entity discloses non-adjusting events if they are of such importance that non-disclosure
would affect the ability of users to make proper evaluations and decisions.
The required disclosure is the nature of the event and an estimate of its financial effect.
常见情况：
 Announcement of a major restructuring/acquisition 期后宣布重组/并购
 Issued equity share after the year end 期后发行股票
 Dividends declared after the year end 期后发放股利
 Loss of assets due to fire or flood 期后洪灾、火灾
 年后维修不属于期后事项
审计关键点：
 对期后事项没有进行正确的记录或披露-低估相关科目（TR/Inventory/Provision）-2020 Mar
Q1 a)√, 2019 Sep/Dec Q1 a) √
例题 2020 Mar Q1 a)
Rick Group (the Group) has a financial year ending 30 September 20X5.
Exhibit 5 – Potential new subsidiary

The Group is planning the acquisition of a new foreign subsidiary, Michonne Co, which is located in
Farland. The negotiations are at an advanced stage, and it is likely that the acquisition will take place in
October 20X5. The Group’s audit committee has suggested that if the acquisition goes ahead, due to the
distant location of the company and the fact that Atlanta & Co has no offices in Farland, a joint audit
could be performed with Michonne Co’s current auditors, Lucille Associates, a small local firm of
Chartered Certified Accountants.
Solution：
The acquisition of Michonne Co is planned to take place within a month of the reporting date. (案例
信息), Although the acquisition is not exist at year end, it provide further information for users of
Financial statement, it is a significant non-adjusting event. (判断调整/非调整事项)
Non-adjusting event should be disclosed and the nature and a reasonable estimate of financial
effect should be made(准则要求), so there is an audit risk is that incomplete or inaccurate disclosure
is provided in the notes of F/S (科目影响). (3 分)
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IAS 24 Related party transaction (关联方交易)-SBR
Related party transaction (RPT)

1. 关联方交易范围：
A related party is a person or an entity who has control or joint control over the reporting
entity.
A person is related to a reporting entity if that person:
a) has control or joint control of the reporting entity;
b) has significant influence over the reporting entity; or
c) is a member of the key management personnel of the reporting entity or of a parent of
the reporting entity.
An entity is the same group, associate or joint venture is a related party.
2. 准则要求
The nature, information and outstanding balances of related party transaction should be
disclosed in the notes of financial statement.
审计关键点：
 列报是否正确（无论金额是否超过重要性水平，都必须披露）-2021 Sep/dec Q1 b) √,2020
Sep/Dec Q1 a) √,2020 Mar Q1 a)
 是否公允，是否存在操纵其他科目的可能性-2021 Sep/dec Q1 b) √
范例：
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2021 Sep/dec Q1 b)
Exhibit 2
of machine used in the oil industry. Martin, who is the company’s chief executive officer, owns 60% of the
shares in the company, with the remainder spit equally between his brother and sister, Craig and Iris
Gruber.
Martin is planning to sell his shares and retire from the business. Craig and Iris, who are younger than
Martin, will retain their shares and their board positions. Initial discussion with a potential acquirer for
Martin’s shares began last month.
Exhibit 3
Note 4
The change in value of intangible assets represents a transaction which took place in March 20X5,
whereby Gruber Co purchased some designs from Martin Gruber for $9 million. The value of this
transaction was determined by Martin Gruber. The audit engagement partner has asked for information
to support this value, but nothing has yet been received from Martin.
Solution:
Related party transaction
A related party is a person who has control or joint control over the reporting entity, therefore the
sale of the designs by Martin to Gruber Co is a related party transaction【必须指明是哪一种形式的
关联方关系】, and the transaction between related parties should be disclosed the nature and effect
to financial statement. (案例信息+准则要求) There is a risk that disclosure of the transaction is not
made at all or made inadequate(科目影响). (3 分)
Intangible asset
Tthe intangible asset recognized in the year at cost to the company of $9 million.
Since Martin is planning to sell his shares (案例信息), there is motivation to create management
bias to maximise the assets value, so it is questionable whether Martin has sold anything at all to
the company (指明问题), so there is a significant risk that intangible assets are overstated(科目影
响). (3 分)【此处与可以质疑金额不合理】
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IFRS 2 Share-based Payment (期权激励计划)-SBR
1. Share-based payment(Equity-settled)-权益结算的股份支付
初始计量
Dr Expenses
Cr Equity Estimated number of employees entitled to benefit *Number of
instruments per employees*Fair value at grant date per instrument*
Proportion of vesting period
后续计量：
No need to remeasure
Eg：公司一共 10 人，每人给 100 股，授予日股票市价为$15，3 年后行权。

第一年(预计第 3 年 8 人行权)
Dr Expense 8*100*15*(1/3)=4000
Cr Equity 4000
第二年(预计第 3 年 6 人行权)
Dr Expense 6*100*15*(2/3)-4000=2000
Cr Equity 4000
第二年(第 3 年，最终 5 人行权)
Dr Expense 5*100*15-4000-2000=1500
Cr Equity 1500
2. Share-based payment(Cash-settled)-现金结算的股份支付
初始计量
IFRS 2 Share-based Payment states that the liability in respect of the plan should be measured
at fair value at the year end.
Dr Expenses
Cr Liability Estimated number of employees entitled to benefit *Number of
instruments per employees* Fair value at year end * Proportion of
vesting period
后续计量：
 The entity should remeasure the fair value of the liability at the end of each reporting
period and at the date of settlement, with any changes in fair value recognized in profit
or loss for the period.
审计关键点：
 初始确认方式正确-2018 Sep Q3 b)
 预计人数、Fair value 等条件是否合理-高估或低估 Liability/Equity-2019 Mar/Jun Q3 b) i)√
Grant date: 授权日【就是送股票的那一天】

Vesting period: 等待期【漫长的打工过程】
Vesting condition: 行权条件【目前 AAA 通常不设置】
Vesting date: 行权日【获得股票的那一天】
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It is 1 July 20X5. You are a manager in the audit department of Dumont & Co, a firm of Chartered
Certified Accountants. You are assigned to the audit of Bransfield Co which has a financial year ending
30 September 20X5. Your firm has been responsible for the audit of Bransfield Co for the last four
years.
In April 20X5, Bransfield Co granted share options to executives and senior management of the
company as a way of providing performance related rewards without impacting cash flow. The
estimated expense of the share option scheme in the year ending 30 September 20X5 is $14 million.
The expense of the scheme is being recognised in profit or loss over the five year vesting period. It is
currently assumed that all of the options will vest and the expense is calculated on that basis.
Solution:
Share-based payment expense
Since there are share options granted to executives and senior management (案例信息), equity
and expense in respect of the plan should be recognised over the vesting period and calculated
using the fair value of the share options at the grant date. (准则要求)
However, since some of the executives and senior management team might leave the company
before the end of vesting period, the assumption assumption that all the share options will vest
seems too optimistic(结合案例的判断), therefore, operating expenses and equity will be
overstated(科目影响). (3 分)【此题与可以质疑是否计入 Equity，否则会使 equity 低估，liability 高
估】
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IFRS 16 Lease
A contract is a lease if the contract conveys（转让）the right to control the use of an identified
asset for a period of time in exchange for consideration.
① 确认 lease
A right-of-use asset and a lease liability should be recognized at the present value of the
lease payments (at the commencement date of the lease).
Dr Right of use asset ①+②
Cr Lease liability（未来要付的） ①discounted lease payment
Cash（即刻已付的） ②Initial payment+ direct costs
后续计量
 Right of use assets
Cost model-the right of use asset is depreciated from the commencement date to the
earlier of the end of its useful life or the end of the lease term.
Alternatively, can use revaluation model (PPE) or fair value model (Investment property)
 Lease liability
The carry amount of lease liability is increased by interest charges on the outstanding
liability and reduced by lease payments made.
记录利息【Lease liability】记录折旧【Right of use assets】-cost model

Dr Interest charge (Finance Dr Depreciation
cost)
Cr Lease liability Cr Accumulated depreciation
② Exemption
There is an exemption for short-term leases of less than 12 months’ duration with no
purchase option.
If the exemption is used, right-of-use assets and lease liabilities should not be recognized,
and the lease expense should be recognized by straight line method or another systematic
basis.
The exemption can be taken; however, it must be applied consistently by each class of
underlying assets. 【如果使用，同一类资产必须使用同一个方法 eg：Building 跟机器就是两
类不同的固定资产】
Dr Expense
Cr Trade payable
审计关键点：
 是否确认 Right of use assets，能否使用豁免准则
 两种不同情况下的会计记录是否准确。
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IFRS 16 Sale and lease back
1. 确认条件：
The key issues is whether control of the asset has been retained by the seller or whether it
has passed to the buyer. 【审计关键点为是否控制权转移】
Control of the asset is defined as ability to direct the use of and obtain substantially all of
the remaining benefits from the asset.
判断关键-通过资产剩余的使用年限进行划分：
 Transfer is a sale【控制权转移】
A lease liability is initially measured at the present value of the lease payments and this right-
of-use asset should be depreciated over the term of the lease.
Although the rent-free period alters the timing of the cash flows relating to the lease, the
depreciation should be charged as entire life of lease asset, even if no lease payments have
been yet been made.【虽然免租期改变了与租赁有关的现金流动的时间，但折旧应在租赁资
产的整个使用期进行记录，即使尚未支付租赁款。】
初始计量
Dr Cash Sale price
Right of use asset (Discounted lease payments/fair value) *Carrying value
Cr Net PPE Carrying value
Lease liability Discounted lease payment
Gains of sale 倒挤
记录利息【Lease liability】记录折旧【Right of use assets】-cost model

Dr Interest charge (Finance cost) Dr Depreciation
Cr Lease liability Cr Accumulated depreciation
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 Transfer is not a sale【控制权未转移】
PPE
初始计量
Dr Cash
Cr Secured loan【视同以固定资产进行抵押贷款】
记录利息 PPE 不从账面上移除，后续正常记录折旧

Dr Interest charge (Finance cost) Dr Depreciation
Cr Secured loan Cr Accumulated depreciation
审计关键点：-2019 Sep/Dec Q2 a) i)√

 是否控制权已转让给买方-如果风险未转移，则高估 Gain, 高估 right of use asset, lease
liability,低估 PPE
 是否将固定资产移除，并确认 right of use asset-低估 right of use asset，高估 PPE
 Lease liability 是否合理确认-eg:折现率是否合适
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Bransfield Co’s financial year is ended at 30 September 20X5.
Bransfield Co owned all of its hotels until January 20X5 when eight properties were sold to Larsenn
Enterprises. Bransfield Co entered into a management contract with Larsenn Enterprises and is
continuing to operate the eight hotels under a 15-year agreement. Under the terms of the
management contract, Bransfield Co pays an annual rental to Larsenn Enterprises for the eight hotels
which is recognised within operating expenses. At the end of the contract, Bransfield Co has the option
to repurchase the hotels, and it is likely that the option will be exercised.
Financial information
Projected Actual
Notes
30 September 20X5 30 September 20X4
$million $million
Revenue 890 713
Operating expenses (835) (690)
Other operating income 1 135 10
Notes:
1 Other operating income
Other operating income for the year ended 30 September 20X5 includes a profit on disposal of
$125 million arising from the sale of eight properties to Larsenn Enterprises.
Required：
Evaluate and prioritise the significant audit risks to be considered in planning the audit of Bransfield Co.
Solution:
The key of sale and lease back is whether control of the asset has passed to the buyer(准则要求).
Since Bransfield Co continues to rent the hotels and has the option to repurchase the hotels, and it
is likely that the option will be exercised(案例信息), this means the control is not substantially
transfer to the buyers, so the profit on disposal of $125m included in other operating income
should not recognized(结合案例的会计处理), otherwise, profit would be overstated(科目影响).
As the ‘sale’ is in reality a finance arrangement, Bransfield Co should accrue finance charges. The total
finance charge associated with the sale and repurchase arrangement should be allocated over the
period of the finance(准则要求), otherwise, finance charges would be understated(科目影响).(虽然
两个关键点，但该科目考官最高给分为 3 分)
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IFRS 8 Operating Segments (分部报告)-SBR
1. 什么叫经营分部：
Operating Segments(经营分部)：
1) a component of an entity that engages in business activities from which it may earn
revenues and incur expenses,
2) whose operating results are reviewed regularly by the entity’s chief operating decision
maker
3) for which discrete financial information is available
If a segment represents 10% or more of the combined revenue of all operating segments,
then it is a reportable operating segment.
2. 准则要求：
Being a listed entity, if a segment represents 10% or more of group’s revenue, then the entity
shall disclose the nature and financial effect of the segment represent.
审计关键点：
 是否对收入超过 10%的分部信息单独列式及披露-2020 Sep/Dec Q1 a)√,2019 Sep/Dec Q1 a)√
范例：
Note 1 (Disclosure):
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Crux Group (the Group) has a financial year ending 30 September 20X5, and is a listed entity.
Information about the three brands operated by the Group is as follows:
Sunseeker Cruises – Cruises which visit beach destinations in the Caribbean, Europe and North
America.
Explorer Cruises – Cruises which focus on visiting cities and landmarks around the world.
Pioneer Cruises – Cruises which take in areas of natural beauty including the Antarctic and Alaska.
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Solution：
On-board sales
On-board sales of food, drink and entertainment account for approximately 15% of revenue, since on-
board sale may earn revenue and incur expense and its operating results are reviewed regularly by
the entity’s chief operating decision maker, it may meet the definition of operating segment. (案例信
息)
Being a listed entity, if a segment represents 10% or more of group’s revenue, then the entity shall
disclose the nature and financial effect of the segment represent. (准则要求)
There is a risk of incomplete disclosure of revenue of on-board sales of food, drink and entertainment.
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IFRS 10 Consolidated financial statements-FR, SBR
IFRS 11 Joint arrangements-SBR
IAS 28 Investments in associates and joint ventures-FR
Subsidiary 子公司- control (50%以上)- Consolidation – IFRS 10

Joint venture 合营企业- joint control (双方共同控制)- Equity accounting – IFRS 11 & IAS 28
Associate 联营企业 - significant influence（20%-50%）- Equity accounting – IAS 28
类别 Subsidiary Joint venture Associate

控制权＞50% （持股+实际控制权） =50% 20%-50%
处理方法 Consolidation Equity accounting
投资收益确认金额不同被投资单位利润*100%*持有月份被投资单位利润*持股比例*持有月份
Require a line-by-line To be recognized on one line in the
consolidation statement of financial position, and the
列报方式不同 income from the associate to be
disclosed on one line of the statement of
profit or loss
审计关键点：
 子公司，合营企业，联营企业是否用错处理方法-2019 Sep/Dec Q1 a) √
 母子公司之间交易需要抵消-2018 Mar/Jun Q1 a) √
IFRS 3 Business combination-SBR
For the purpose of consolidation, the group’s accounting policies must be applied to all balances
and transactions which form part of the consolidated financial statements. 【子公司与母公司准则
不一致】
审计关键点：
 是否与集团会计政策保持一致（If the group’s policies are not applied correctly, the amount of
consolidation will be measured inappropriate.）-2020 Mar Q1 a) √,
Elimination of the inter-group transaction
 At Group level the transfer is an intercompany transaction and the consolidated financial
statements should be prepared as if the transaction had not occurred. 【集团内部交易需要进
行抵消】
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IAS 21 The Effects of Changes in Foreign Exchange Rates-SBR
Foreign currency transaction【外币折算】

指因使用外币买卖而导致的汇兑损益
The assets and liabilities of foreign subsidiaries should be retranslated using the closing
exchange rate. Its income and expenses should be retranslated at the exchange rates at the
dates of the transactions and the exchange difference should be reported as part of profit &loss.
Foreign financial statement translation【外币财报折算】-AAA 答案不提及

指因境外子公司折算而导致的汇兑损益
审计关键点：
 是否在期末进行正确汇率进行折算-2018 Mar/Jun Q1 a) √, 2018 Sep Q1 a) √
 汇兑损益是否列式正确（应记入 P&L 而不是 OCI）
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练习 2018 Mar/Jun Q1 a)-Group
Associates.
Borzoi Co
Borzoi Co is located in Farland, a country which has recently experienced political unrest, leading to
significant volatility in the local currency, the Oska. At today’s date, the management accounts of Borzoi
Co recognize total assets of 68 million Oska, and the exchange rate is 4 Oska:1$. In the last six months,
the exchange rate has fluctuated between 10 Oska:1$ to 3 Oska:1$.
Farland requires the use of IFRS® Standards and therefore Borzoi Co prepares its financial statements
using IFRS Standards as its applicable financial reporting framework.
To help with the company’s development of language translation operations, on 1 May 2017, Bassett
Co, the parent company of the Group, transferred a piece of translation software to Borzoi Co. The
software had been purchased by the parent company for $1.5 million several years ago and prior to
transfer to Borzoi Co, it was held at a carrying amount of $1 million, this being its cost less amortisation
to date. Immediately prior to being transferred to Borzoi Co, the software was revalued in the parent
company’s financial statements to $5.4 million, this being its estimated fair value at the time of the
transfer. The estimate of fair value was determined by Group management, and this amount is still
outstanding for payment by Borzoi Co.
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Solution:
Foreign currency retranslation
In order to be consolidated into the Group, the financial statements of Borzoi Co will need to be
retranslated from its local currency, the Oska, into $. (案例信息)
The assets and liabilities of foreign subsidiaries should be retranslated using the closing exchange
rate. Its income and expenses should be retranslated at the exchange rates at the dates of the
transactions. (准则要求) The fact that the currency has been volatile over the last six months means
that the retranslation of income and expenses is problematical, so there is an audit risk that incorrect
exchange rates are used for the retranslations, (指明问题) this could result in over/understatement of
the assets, liabilities, income and expenses which are consolidated(科目影响). (3 分)
Related party transaction

The translation software is transferred from the Group to Borzoi Co, since the Group has control over
Borzoi, this indicate a related party relationship which means the nature and outstanding balance of
related party should be disclosed. (案例信息+准则要求)
There is risk that the necessary disclosures regarding the transfer of the translation software are not
made. (3 分) (科目影响)
Software revaluation
The fair value of software was recognized in the parent company accounts immediately prior to the
transfer of the asset was determined by Group management(案例信息), although the revaluation is
permitted(准则要求), the revaluation of uplift is $4.4m, 440% (4.4m/1m) of its carrying value(0.5 分),
besides, as it is related party transaction and the Group is listed, there is motivation for management
to overstate assets(指明问题).
So there is audit risk the revaluation of software is inappropriate and intangible asset is overstated.
Elimination of the inter-group transaction

At Group level the transfer is an intercompany transaction and the consolidated financial statements
should be prepared as if the transaction had not occurred. (准则要求)
If the elimination of the inter-group transaction does not take place as part of the consolidation
process, there is an audit risk that intercompany payable, receivable is overstated(指明问题+科目影
响). (3 分)
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IAS 12 Income Taxes
A deferred tax asset is recognized for an unused tax loss carry-forward or unused tax credit if, and
only if, it is considered probable that there will be sufficient future taxable profit against which the
loss or credit carry-forward can be utilised. 只有未来很可能有足够的应税利润时才能确认相应的递
延所得税资产
审计关键点：
 是否未来很有可能有足够的应税利润（eg: 以前年度递延所得税资产确认 100m，本年利润只
有 20m，只占 20%）（Profitability forecasts）
IAS 33 Earnings per Share
The earnings per share (EPS) figure should be calculated based on the profit or loss for the year
attributable to ordinary shareholders(应该是 profit after tax) and it should be based on the
weighted average number of shares which were in issue during the financial year, besides, it
should be disclosed in the financial statement.【EPS 需要用归属于普通股的利润（税后利润）/加
权股数】
EPS=Profit after tax/ weighted average number of shares
审计关键点：
 是否使用税后利润进行计算
 是否使用加权平均的股数
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Going concern
Uncertainty of going concern should be disclosed in F/S.
常见情形：
 公司利润下降显著或现金下降或出现负值。
 公司存货严重滞销+打官司
 公司的特许经营权被取消+打官司
 公司经营严重依靠 Overdraft（透支额），透支额马上到期，但银行是否继续提供透支额
（Renew）尚不知晓【寻找可能无法继续提供的证据，eg：经营下降，公司扩张使得杠杆上升】
分析方式：
案例信息(特许经营权被取消，打官司，公司限制借款等内容)+财务指标（收入下降比率，现金下降比
率，各项支出累计额等）→持续经营不确定性→披露问题
Pale Co has a financial year ending 30 September 20X5.
International expansion
Pale Cos operations are currently all based in its home jurisdiction. However the board has recently
approved the acquisition of several large areas of tropical rainforest in Farland. a remote developing
country. The expansion will allow the company to process new types of timber for which there is
significant demand from luxury furniture manufacturers. The acquisition of the areas of the rainforest will
cost $25 million and the purchase is due to take place in August 20X5 The cost of $25 million is
equivalent to the fair value of the rainforest.
The purchase is being funded through a share issue to existing and new shareholders, who are mainly
family members of the Pale family, who established the company 20 years ago. A share issue was the
only option for funding the international expansion as the company is at the limit of its bank borrowing
agreement.
Legal case
A group of employees has recently commenced legal action against the company, claiming that breaches
of health and safety guidelines regularly take place. The company has made some redundancies this year,
which has put pressure on the remaining staff to work harder in order to maintain productivity; the
employees are alleging that this has caused an increase in the number of accidents at work, some of
which have resulted in fatalities. The company's management and legal advisors believe that the legal
claim, which amounts to $19 million, is unjustified and will not be successful. Mark York does not intend
to recognize a provision for the claim or make any disclosure in the financial statements in relation to
this issue as it is at such an early stage in the legal proceedings.
Use of expert —change in fair value due to recent storms

In the last month, several storms caused damage to some areas of timber plantation. An independent
expert has been appointment by management to determine the extent of damage caused and to quantify
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any financial implications, including determination of the change in fair value of the standing trees which
have been damaged by the storm. The expert's report indicates a large number of trees have been
completely destroyed, and many have been badly damaged. Based on the expert's report, management
has determined that a reduction in fair value of $70.5 million should be recognized in respect of the
timber plantation asset recognized in the statement of financial position.
Exhibit 4: Key performance indicators
The information in the table below will be published as part of the Annual Report. in a section titled
'Key results for the year', which forms part of management's commentary on the company's
performance. The financial information is before recognising the change in fair value of the timber
plantation caused by the recent storm, and also before accounting for the government grant.
Projected Actual % change

30 September 30 September
20X5 20X4
Financial key performance indicators: $million $million
Revenue 42.5 40.3 +5.5%
Total assets - $550 million (20X4 - $545 million)
Inventory - $15.4 million (20X4 - $9.2 million) - the increased level of inventory is explained by
management as follows: “in the last two months, industrial action at the country's ports meant no
containers of processed timber could be shipped to our export customers. The missed export sales so
far amount to about $2.1 million. We continued to harvest and process timber during this time, leading
to an increased level of inventory The industrial action is ongoing."
Cash - $4.5 million (20X4 - $6.8 million) - cash levels are depleted this year due to inflationary
pressures and demands for higher wages from our employees, which we have met.
Solution:
Going concern
The company has only $4.5 million of cash – a reduction of 33.8% ((4.5-6.8)/6.8)(0.5 分) compared to
last financial year, besides, reduction of timber is $70.5m, legal claim is $19m, expansion needs $25m,
the total expenditure is exceed cash, but the company is at the limit of its bank borrowing
agreements. (案例信息)
What’s more, industrial action would have bad influence to inventory value and future income. (案
例信息)
All these indicate Pale Co would face going concern problems, if so, material uncertainty related to
going concern should be disclosed in notes of financial statement(准则要求), as a result, there is a risk
of inadequate disclose of going concern (科目影响). (3 分)
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2. Audit risk 答题思路
Q1 格式【Q2 Q3 无格式】
Briefing notes
To: XXX Audit engagement partner
From: Audit manager
Subject: XX Co – Audit planning
Date: XXX
Introduction[介绍] 就是把问题在汇总阐述一遍
These briefing notes are prepared to assist with planning the audit of XX Co for the financial year
ending 30 September 20X5. The notes evaluate the xxx (eg: audit risks) which should be
considered in planning the audit. The notes also evaluate xxx. Finally, the notes discuss xxx
a) XXXX
b) XXXX
可以不给 conclusion.
Q1 专业分要求
 Communication（沟通）
1) 明确使用标题/小标题和介绍每个主题之间空一段
2) 语言清晰明白易于理解
3) 答案与案例及提问是相关
 Analysis and evaluation（分析及评估）

1) 讨论时更多的使用案例信息并继续相关有用的计算（避免只计算不分析）
2) 当有异常波动（趋势）或有矛盾点（财报数据跟 note 出现矛盾或财报数据与案例信息出现矛
盾）时会进行分析
 Professional scepticism and judgement （职业怀疑与判断）

1) 有效的提出质疑，对于虽然准则允许但会使得利润高估的记录方式能提出可能是
management bias（比如 PPE fair value 上升，公司对亏损子公司未合并，公司未进行
impairment 测试等）
讨论时准则+其他可能导致 Management bias 的背景
 公司准备借款扩张
 公司准备变卖股票
 公司有借款要求
2) 对于高管不让调查要考虑 management integrity
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审计风险通常的答题范围
 Ethics ×
 Money laundry/Fraud ×【通常不提及，可以考虑内控不好，可能导致财报出错或 mgt
integrity】
 New client √【Detection risk+ opening balance】
 Significant component√【重要组成部分+对组成部分审计师的了解】-集团审计具体学习
 Subsequent event √【Adjusting/non-adjusting event】
 Going concern √【有不确定性时的披露问题】
 Compliance √【Provision/contingent liability】
 管理层阻挠 √【mgt integrity-professional skepticism】
① 有效的进行审计风险的排序【金额大小，财报影响+发生概率】【可以先按事件写最后再排
序】
陈述排序理由会增加专业分-写在题目最后即可【不用都说挑 1-2 个说一下就行了】：

The audit risk have been ordered with regard to the estimated magnitude of any
misstatement【定量标准】and the likelihood of such a misstatement occurring【发生的
概率】.
For example,
 XXX has an overall impact to financial statement 【对财报有整体影响】【eg：应该使
用 Equity method 却合并】
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 XXX is the highest quantitative area【科目余额最大】, and it is newly occurring in the
year【本年新发生的，eg：仓库或其他重大资产的减值】
 XXX is the highest quantitative area【科目余额最大】, and there is significant
management bias to determine the XXX【存在管理层偏见】
so it should be considered first.
② 重要性水平评估 (1 分)
The overall materiality level used to assess the significance of identified risks are based on the
profitability of the company
Benchmarks
通常选 PBT(eg:20m)，计算区间【5%-10%】-选 5%为 threshold 即可.
题目要求也可以选择收入，计算区间【0.5%-1%】-选 0.5%为 threshold 即可.
Benchmarks
Profit before tax of $20 million should be suggested as a benchmark and the range should
be between $1 (5% × $20 million) to $2 (10% × $20 million).
重要性水平判断依据：
重要性水平它就是一个相对而比较主观的过程，主要考虑公司整体的风险，比如说：如果
是一个新客户，然后他有上市的动机/有抛售股票的动机，包括有一些特大风险
（significant risk），比如说火灾，因官司导致的特大赔偿，持续经营存疑等等，这些都会
使得我们的审计风险上升，所以重要性水平是要放的比平常更低一些的。反之，如果是一
个老客户，且在审计的过程中没有发现以上问题，那么重要性水平可以适当的往高调。
This benchmark is only a starting point for determining planning materiality and therefore
professional judgement will need to applying during audit.
Since this is a new client, the materiality should be set at the lower end of the range at
$1(threshold).【如果案例提及是新客户】
或
Although this is an existing client, there are a number of significant risks which indicates
that materiality should be set at the lower end of the range at $1 million.【如果案例没有提
及是新客户，通常默认是老客户】
This is an existing client and we have cumulative knowledge and experience of XX Co,
however, the changes to the company’s operations in the year increase the level of risk in
the current year. Therefore, materiality has been based on 7% of profit before tax
and has been set at $XX【也可以选其他值】
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③ 重要性水平比对
Q1-Audit risk Q2-3 [一个科目最多 1 分]-其他题目
通常选 5% of Profit 作为 threshold. 使用 Profit(5%)或 Asset/Revenue(1%)进行计算
之后用科目余额直接比较即可  可以用账面余额，发生值报进行计算【第一
每题计算 2 个段】
The Group incurs $75 million for  如果该案例可以计算出错报，建议使用错报
upgrade this year. 进行计算【Matters 分析之后】
This is material based on the threshold Eg:
of $4.05 million calculated above. (1 分) The carrying amount of the investment property
*收入及利润一般是重要性水平的基 represents 2.6% ($353,000/$13.8 million) of
数，故不再使用收入或利润作为进行比 Lifeson Co’s total assets, so it is material to the
较 financial statements.
如果题目提供重要性水平，直接进行比较皆
可，超过任意一个数字即说明是重要的。
Eg:
Materiality has been set at $800,000 for assets
and liabilities and $250,000 for income and
expenses.
The misstatement is $125,000, which is not
material individually.
④ 每个科目一般最高 3 分（识别两个关键点 4 分）
⑤ Trend 或其他计算额外增加 0.5 分 (每次计算 0.5 分，一般最多 2-3 分)

 收入或利润的增幅
如果是绝对值通常需要算增减幅度【(今年-去年)/去年】
如果已经是比率了就可以直接相减
eg: 上年利率 6%，本年利率 8%，可以直接写增加 2%，无需再计算比率
 当 fair model 使用并有溢价时可以进行计算涨幅
 当提及 management bias 时除了公司即将要上市，或者公司准备处置股票，建议结合计
算，比如收入的增幅，Fair value 的增幅，gain 占收入比例等，来侧面证明公司有造作的
可能性。
 根据案例信息能计算出错报时
Argyle contract-2021 SD Q1
For long-term contract, the revenue should be recognized by appropriate method
over the period. Both input or output method is permitted. (准则要求)
In the case, Gruber use output method, which is projected to be $4 million compared
with the contract price of $6 million, giving a percentage completion of 66.7% (0.5
分), the revenue recognized should be $4m(6m*66.7%)(收入*%)(0.5 分), the
incurred cost is $2.6m（实际费用）, so $1.4m (4-2.6) (0.5 分) should be
recognized as profit, however, Gruber recognize $2.2m in full (指明问题), which
means profit is overstated by $0.8m(0.5 分)(科目影响). (3 分)
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Analytical procedures-计算 ratio (分值不超过 5 分)
只有题目要求时才进行专门的计算 (题干信息提及：“You should use analytical procedures to assist in
identifying audit risks”)
通常可计算的比率
Operating margin
Current ratio
Gearing (Debt/equity)
Effective tax rate（Tax expense/Profit before tax）
项目审计风险
Operating margin
通过趋势分析，查看收入是否高估，费用是否低估
如果增加，进一步查看
-销售数量是否与收入等比例增长
revenue 和 expenses 变动幅
-利润率应结合公司政策，如果降价，利润率应下降，否则有
度 (有费用明细的还可进一
高估利润 (收入)风险
步拆分后进行分析)
举债 Gearings 应升高，否则负债有漏记风险
Gearing (Debt/equity) 财务成本应该与举债规模成正比否则利息可能低估
结合分析公司是否有 going concern 问题
年与年之间是应稳定的如果下降可能有低估 tax expense 的风
Effective tax rate
险
3. Audit risk vs RoMM

 Audit risk 考虑新客户带来的 Detection risk
 ROMM 不考虑新客户带来的 Detection risk
Audit risk 常见低分问题

Management bias
As a listing company, it will have the management bias and has pressure in a good financial
position of statement。(不结合当前的案例信息和财务比例，也不提及可能对财报的影响，仅提及
上市公司和 Management bias 无法得分)
Research and development cost

Under the standard, the research cost should be expensed, and development cost should be
capitalized. (只提及准则，但是没有结合行业stringent regulatory requirement去质疑IA的资本化问
题)
There is a risk that overstatement of capital cost (此处没有正确的指明科目，建议写成Intangible
assets )if the research cost is capitalized.
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4. Implication for planning the audit and relevant actions-2017 SD Q1 c）-2022 MJ Q3 c）
审计计划的影响【Implication】+审计师具体的行动【Relevant/Further actions】
该题目通常作为审计风险的补充，通常专门提问
 Proposed sale of company【更强的 mgt bias，职业怀疑上升，mgt integrity，对 subjective 事
项执行更多程序（可结合案例举例说明，eg：资本化问题等）】
 客户把部分财务工作外包【了解外包内容+了解 service organization 的内控】
 Management integrity【导致整体审计风险上升应提高职业怀疑】
 Compliance/Fraud【了解该事件，考虑对财科目的影响，考虑影响的审计程序】
 审计范围受限【与治理层沟通想办法拿到资料】
Impact of outsourcing the credit control function to service organization on audit planning
被审计单位将信贷部门外包给服务企业（第三方）对审计计划的影响
User entity(client)-被审计单位对财报 User auditor-事务所

进行审计
Outsource 无直接关联性
对内控
Service organization Service auditor
进行审计
In order to identify and assess the risks of material misstatement, the auditor should obtain an
understanding of the nature and significance of the services provided by the service organisation
and the effectiveness of internal control of service organisation. 【为了识别和评估重大错报的风险，
审计师应了解服务机构所提供服务的性质和重要性，以及这些服务企业内控的有效性】
In order to understand the nature and significance of the services, audit firm should conduct following
procedures:
 Review the contract between 被审计单位 and 第三方企业 to understand the terms’s the
engagement【检查并了解合同条款】
 Document how the systems of 被审计单位 and 第三方企业 interface to understand how the credit
control function impacts on 被审计单位的 accounting records.【记录两家公司是如何衔接的，
以了解信用控制部门如何影响被审计单位的会计记录。】
In order to understand effectiveness of internal control of service organisation, audit firm should
conduct following procedures
 Review reports issued by 第三方企业 to determine the effectiveness of the credit control
function performed【检查第三方企业的有效性】
 Obtaining a type 1 or type 2 report, if available【如果可以，可以过得一类或二类报告】
 Type 1 report is about description and design of controls and Type 2 report is about description,
design and operating effectiveness of controls【一类报告主要用来描述内控的设计，二类报告
还增加了内控的有效性（推荐获得二类报告）】
 Visiting the service organisation and performing procedures which will provide the necessary
information about the relevant controls at the service organisation;【实地拜访第三方企业，以获
取与内控相关的信息】
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历年真题
2022 Dec Q1
It is 1 July 20X5. You are an audit manager in Arnott & Co, responsible for the audit of Mercurio Co, a
listed company with a financial year ending 30 September 20X5. Mercurio Co is the country’s leading
specialist retailer of small domestic pets, pet food and pet accessories, operating 264 stores across the
country.
The following exhibits, available on the left-hand side of the screen, provide information relevant to the
question:
1. Partner’s email – an email which you have received from Ted Hastings, the audit engagement
partner.
2. Background information – information and matters relevant to audit planning.
3. Selected financial information – extracts from Mercurio Co’s management accounts, including the
results of preliminary analytical procedures, which have been performed by a member of the audit
team.
4. Meeting notes – extracts from meeting notes taken at a recent meeting with the finance director of
Mercurio Co.
Exhibit 1: Partner’s email

To: Audit manager
From: Ted Hastings, audit engagement partner
Subject: Audit planning – Mercurio Co
Date: 1 July 20X5
Hello
With the year end approaching, I need you to start planning the audit of Mercurio Co. I met with the
company’s finance director, Kate Fleming, last week to discuss recent developments for the business. I
have provided you with a summary of the matters discussed at the meeting along with some projected
financial information. Based on the analysis I have done on this industry, it is appropriate for overall
materiality to be based on the company’s profit before tax as this is a key measure for investors and
providers of finance. I require you to prepare briefing notes for my use in which you:
(b) Evaluate and prioritise the significant risks of material misstatement which need to be considered
in our audit planning.
Please note that you should NOT evaluate risks relating to the audit of animal inventory as
these will be addressed separately at a later stage by an auditor’s expert as in prior years.
(18 marks)
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Exhibit 2: Background information
Mercurio Co is a large listed company, established 15 years ago when the founders observed a growth
in demand for pet-related products. The company has grown steadily and is now the largest retailer of
pet-related products in the country, with over 7,000 employees, who are mainly staff working in the
stores.
As well as selling pet-related products for a wide variety of animals, the stores also sell small animals
such as rabbits and fish. Staff members are fully trained to give advice to customers on matters
including nutrition and general animal health, and staff members are also trained in handling all types
of animals which are sold. Some stores sell more unusual pets such as spiders, snakes and other reptiles
and require compliance with specific import restrictions and welfare standards.
Mercurio Co also operates veterinary clinics within most of its stores. The veterinary clinics are staffed
by fully qualified vets who offer a full range of veterinary services. Customers can pay as they go for
appointments and treatment of their animals, or they can take out an annual pet healthcare plan which
covers the cost of essential vaccinations and quarterly health checks. The pet healthcare plans are
extremely popular as they offer good value for money to the customer, and the annual income from
sales of these plans historically accounts for 10% of the company’s revenue.
The costs associated with the vaccinations and health checks have risen over recent years, however,
Mercurio Co has not been able to increase the prices due to customer price sensitivity over annual pet
healthcare plans. The company’s accounting policy is to recognise the revenue from the sale of a
healthcare plan on the date when the healthcare plan commences.
Exhibit 3: Selected financial information

Extracts from the management accounts of Mercurio Co for the year ending 30 September 20X5
Projected 20X5 Actual 20X4
Note $ million $ million
Extract from Statement of profit or loss:
Revenue 803 745
Profit before tax 60 56
Extract from Statement of financial position:
Total assets 1,078 957
Included in total assets:
Assets relating to stores purchased from Lakewell 1 171 -
Trade receivables 2 42 22
Goods in transit (part of inventory) 3 12 -
Cash and cash equivalents 36 81
Included in total liabilities:
Holiday pay obligation 4 21.1 11.6
Employee numbers 7,000 6,200
Bank loans 251 75
Current ratio 2.6 1.4
Gearing ratio 31% 11%
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Notes:
1. Assets relating to stores purchased from Lakewell Co

To expand into new locations, 20 stores were purchased from Lakewell Co, a clothing retailer, on 1
May 20X5, at a cost of $171 million. Mercurio Co purchased the stores using their cash reserves.
Lakewell Co was facing going concern problems and offered the stores for sale as part of a
restructuring programme.
The stores need to be completely refitted at an estimated cost of $9 million each. Mercurio Co’s
management has not yet decided how many of the stores will be retained for use in the business;
any which are not retained will be sold. The stores will be refitted during the period November
20X5 to January 20X6.
2. Trade receivables
While the majority of sales are for cash, an increasing number of customers have credit accounts
with Mercurio Co. The company offers credit customers 60 days’ credit to pay for goods. The
forecast trade receivables balance at 30 September 20X5 is $42 million (20X4 – $22 million). Due to
the growth in sales to customers on account, in December 20X4, Mercurio Co engaged Fairbank
Co, a service organisation, to provide the credit control function.
3. Goods in transit
In June 20X5, Mercurio Co purchased $12 million of pet food supplies from an international
supplier, with the sales contract stating that ownership of the goods passed to Mercurio Co at the
date of shipping. During transit, the ship carrying the goods was involved in an accident which
destroyed the entire supply of goods. Mercurio Co’s directors had arranged insurance on the
shipment of goods, and the policy states that 80% of the goods destroyed are covered by the
insurance. The latest correspondence from the insurance company was an informal email that the
claim had been received and was due to be processed. These purchases are made in Mercurio
Co's operating currency.
4. Holiday pay obligation

Mercurio Co has an internal audit department, who have been testing the controls in the
company’s payroll system. Internal audit procedures have revealed that some employees are
duplicated on the payroll system; this seems to have happened when two different systems used
for recording full-time and part-time staff were merged in October 20X4. Additionally, the internal
audit team’s procedures have found that while the systems have the capability of recording
holidays taken by staff, this is not always used, and manual records are also maintained in relation
to holiday entitlement. Employees are entitled to carry forward a maximum of 3 days of unused
holiday entitlement to the next year. Management estimates a holiday pay obligation relating to
unused holiday entitlement at the year end using the previous year’s obligation and adjusting it for
pay rises and changes in staff levels. The holiday pay obligation forecast for 30 September 20X5 is
$21.1 million (20X4 – $11.6 million).
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Exhibit 4: Meeting notes
Notes from meeting with Kate Fleming, Mercurio Co finance director
This year has seen a significant business development for the company. The company has started to sell
products under its own brand, introducing the ‘Mercurio Range’ of premium pet food and accessories.
The products are manufactured in another country and imported, and purchases of Mercurio brand
goods from foreign suppliers are predicted to be $7 million for the year to 30 September 20X5. The
range was introduced for sale in June 20X5, and was heavily promoted. Having been only recently
introduced, sales of products from the Mercurio Range will be insignificant in this year’s financial
statements. However, projections in the management accounts indicate that the Mercurio Range is
expected to account for 30% of revenue in the financial year to 30 September 20X6.
During the year, Mercurio Co took out an additional bank loan to aid with cash flows for the new
Mercurio brand promotion and the forthcoming refitting of the stores purchased from Lakewell Co.
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Solution：
b) Risk of material misstatement
可以复制
题目信息
Materiality
For the purposes of these briefing notes, the following overall materiality level will be used to assess the
significance of identified risks and as requested this has been based on the profitability of the company.
【可从案例信息复制过来】
Benchmarks
5%–10% of profit before tax($60m) = range of $3·0 million–$6·0 million
Although Mercurio Co is an existing client, the company is listed and has taken out new loans during
the year, which increase the overall of risk of material misstatement, so materiality has been based on
5% of profit before tax and has been set at $3·0 million. (1 分)
Purchase from Lakewell Co【金额最大可以排第一】

The acquisition cost is $171m, this is material based on the threshold of $3 million calculated above. (1
分)
Mercurio Co purchased the stores from Lakewell Co, for the stores which Mercurio Co’s plans to refit,
they should be recorded as PPE, but Mercurio Co’s management has not yet decided how many of the
stores will be retained for use in the business; any which are not retained will be sold. if management
is committed to a plan for disposal which is likely to occur within 12 months, then the properties are
likely to recorded as held for sale, but if they are going to be held for the longer term and not for
future use, then they are more likely to be recorded as investment property, so there is a risk that the
assets are mis-classified, resulting PPE is overstated and HFS or investment property is
understated. (3 分)
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注：该题目不能讨论 refiting 的资本化/费用化问题，因为该费用今年尚未发生，而是预计财报截止日
后才发生（20X5 年 11 月发生，财报截止日：20X5 年 9 月），故不在本年的审计范围内，此内容也不
属于期后范畴。
Management bias【除了可以质疑收入，也可以质疑其他内容】
Revenue has increased by 8% (0.5 分) compare with last year, profit before tax has increased by 7%
(0.5 分), but the operating profit has increase by 56% (0.5 分), The company is a listed entity and is
seeking new finance for the store refurbishments, there will be pressure for the company to show
good financial performance, so the big increase in operating profit may indicate that management
may use earnings management techniques to understate expenses. (2 分)
【此处也可以分析其他指标，比如 Trade receivable，Holiday pay obligation 或 current ratio

eg：
Trade receivables have increased by 91% (0.5 分) which is an unusual movement and not
explained by the information received from the client. The current ratio has increased by 86%
(0.5 分) during the year which has not been explained by discussions with the client to date.
Owing to the fact that Mercurio Co is a listed entity and seeking new finance for the store
refurbishments, there would be management bias to overstate the current ratio in order to make
more favourable loan applications. (2 分)】
Revenue recognition
Revenue should be recognised when the entity satisfies a performance obligation. but in this case,
customers can take out an annual pet healthcare plan which covers the cost of essential
vaccinations and quarterly health, since the company has a performance obligation up until the end
of the healthcare contract, if Mercurio Co has recognised the revenue when the annual payment is
made， there is a risk of overstatement of revenue and understatement of the deferred income. (3
分)
Trade receivable
The trade receivable is $42m, this is material based on the threshold of $3 million calculated above. (1
分)
Trade receivables have increased by 91%(0.5 分). As the increase of receivable, the risk of bad debts is
increased, so the allowance should be increased too, but if Mercurio Co recorded allowance as the
previous percentage, the trade receivable would be overstated and profit would be overstated. (2-3
分)
Holiday pay obligation

The trade receivable is $21.1m, this is material based on the threshold of $3 million calculated above.
(1 分)
Internal audit procedures have revealed that some employees are duplicated on the payroll system,
this means there is lack of control in payroll system and the accuracy of the payroll is questionable,
besides, the amount of the obligation has increased by 81·9% from the previous year, but the number
of employees is only increased by 13%, so there is a risk that the payroll expenses would be
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overstated. (3 分)【此处也可以提及 obligation 需要管理层的预估，所以比较主观，从而存在高估/低
估风险】
Goods in transit
Mercurio Co purchased $12 million of pet food supplies from an international supplier, this is material
based on the threshold of $3 million calculated above. (1 分)
The sales contract stating that ownership of the goods passed to Mercurio Co at the date of
shipping. During transit, the ship carrying the goods was involved in an accident which destroyed the
entire supply of goods, which means the NRV of the inventory would be zero, inventory should be
recognized at the lower of NRV and cost, so there is a risk that inventory and profit are both
overstated.
Mercurio Co’s directors had arranged insurance on the shipment of goods, and the policy states that
80% of the goods destroyed are covered by the insurance. Since there is only informal email had
been received, the probability is not virtually certain, the claimed should not recognized as
receivable, but if the probability is probable, a contingent asset should be disclosed, so there is a
risk that receivable is overstated and contingent asset is inadequate disclosed. (4-5 分)
The risks of material misstatement have been ordered with regard for the estimated magnitude of any
misstatement and the likelihood of such a misstatement occurring.
For example, the purchase of the stores for refurbishment is the highest quantitative area and is
newly occurring in the year so it should be considered first.
Materiality：
评估 1 分比对 3 分 (最高 2 分)
Ratio 等计算：4 分 (最高 3 分)
准则及其他：15-17 分
合计 21-23 分最高得分 18 分
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Chapter 2 Business risk
1. Business risk vs Audit risk

 Business risk
公司风险由于经营产生，它是审计师站在公司内部角度，考虑对公司业务，利润，现金流及
企业是否可以继续经营的影响 (落脚点在利润，声誉，现金流等)【与会计准则无关】
常见考虑角度：
 Operational risks
 Financial risks
 Compliance risk
 Audit risk
审计风险重点在财报，主要考虑公司重大事件相关的会计准则，关注公司是否违背会计准
则，从而对财报的影响 (落脚点在科目高估、低估或披露风险)
常见的 Audit risk vs business risk

BR AR
海外扩张 √ ×
很难有足够控制新公司，合规风仅计划扩张无审计风险
险
内审向财务总监汇 √ √
报内控薄弱影响控制内控薄弱影响财报
收入 × √
Mgt bias 提前确认收入
并购某个公司 √ √
开支属于巨大资金压力 Equity method vs consolidation
是否与足够经验
某个仓库火灾 √ √
影响存货导致销售受损+声誉影 PPE 减值（此处也可以考虑存货
响减值）
此处不考虑考虑存货的减值（属 Contingent assets
于 AR）
环境污染 √ √
罚款声誉影响 Provision
资金不足 √ √
公司有破产危机【需结合比率最持续经营披露问题
近待付款项，借款到期等说明】
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2. 常见的 Business risk 总结
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3. Business risk 答题要点
从 operational, financial, compliance 三方面考虑
每个风险一般 2 分，计算 trend+0.5 分
Eg：
Competition and marketing expenses(写标题会方便考官判分也会增加逻辑分)

抄题 The industry is competitive, which cause high pressure on the company to maintain its
market share and customer base,
解释 so the company has to spend a lot on marketing to support its brand, this year, $8·5
million has been spent on marketing, which equates to 16% of revenue.
影响 This is a huge drain on cash and will impact significantly on the company’s liquidity
position.
计算趋势会额外增加 0.5 分
Eg：The company’s cash position is projected to deteriorate significantly, with the level of cash
falling from $5·6 million to $1·4 million in the year, which decreased by 75%.
Business risk 常见低分问题

描述的太多简单，只考虑对现金流的影响，没有多元的考虑对经营，声誉等其他方面的影响。
Audit risk 常见低分问题

Management bias
As a listing company, it will have the management bias and has pressure in a good financial
position of statement。(不结合当前的案例信息和财务比例，也不提及可能对财报的影响，仅提及
上市公司和 Management bias 无法得分)
Research and development cost

Under the standard, the research cost should be expensed, and development cost should be
capitalized. (只提及准则，但是没有结合行业stringent regulatory requirement去质疑IA的资本化问
题)
There is a risk that overstatement of capital cost (此处没有正确的指明科目，建议写成Intangible
assets )if the research cost is capitalized.
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历年真题
2022 Dec Q1
It is 1 July 20X5. You are an audit manager in Arnott & Co, responsible for the audit of Mercurio Co, a
listed company with a financial year ending 30 September 20X5. Mercurio Co is the country’s leading
specialist retailer of small domestic pets, pet food and pet accessories, operating 264 stores across the
country.
The following exhibits, available on the left-hand side of the screen, provide information relevant to the
question:
1. Partner’s email – an email which you have received from Ted Hastings, the audit engagement
partner.
2. Background information – information and matters relevant to audit planning.
3. Selected financial information – extracts from Mercurio Co’s management accounts, including the
results of preliminary analytical procedures, which have been performed by a member of the audit
team.
4. Meeting notes – extracts from meeting notes taken at a recent meeting with the finance director of
Mercurio Co.
Exhibit 1: Partner’s email

To: Audit manager
From: Ted Hastings, audit engagement partner
Subject: Audit planning – Mercurio Co
Date: 1 July 20X5
Hello
With the year end approaching, I need you to start planning the audit of Mercurio Co. I met with the
company’s finance director, Kate Fleming, last week to discuss recent developments for the business. I
have provided you with a summary of the matters discussed at the meeting along with some projected
financial information. Based on the analysis I have done on this industry, it is appropriate for overall
materiality to be based on the company’s profit before tax as this is a key measure for investors and
providers of finance. I require you to prepare briefing notes for my use in which you:
(a) Evaluate the significant business risks faced by Mercurio Co.

(8 marks)
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Exhibit 2: Background information
Mercurio Co is a large listed company, established 15 years ago when the founders observed a growth
in demand for pet-related products. The company has grown steadily and is now the largest retailer of
pet-related products in the country, with over 7,000 employees, who are mainly staff working in the
stores.
As well as selling pet-related products for a wide variety of animals, the stores also sell small animals
such as rabbits and fish. Staff members are fully trained to give advice to customers on matters
including nutrition and general animal health, and staff members are also trained in handling all types
of animals which are sold. Some stores sell more unusual pets such as spiders, snakes and other reptiles
and require compliance with specific import restrictions and welfare standards.
Mercurio Co also operates veterinary clinics within most of its stores. The veterinary clinics are staffed
by fully qualified vets who offer a full range of veterinary services. Customers can pay as they go for
appointments and treatment of their animals, or they can take out an annual pet healthcare plan which
covers the cost of essential vaccinations and quarterly health checks. The pet healthcare plans are
extremely popular as they offer good value for money to the customer, and the annual income from
sales of these plans historically accounts for 10% of the company’s revenue.
The costs associated with the vaccinations and health checks have risen over recent years, however,
Mercurio Co has not been able to increase the prices due to customer price sensitivity over annual pet
healthcare plans. The company’s accounting policy is to recognise the revenue from the sale of a
healthcare plan on the date when the healthcare plan commences.
Exhibit 3: Selected financial information

Extracts from the management accounts of Mercurio Co for the year ending 30 September 20X5
Projected 20X5 Actual 20X4
Note $ million $ million
Extract from Statement of profit or loss:
Revenue 803 745
Profit before tax 60 56
Extract from Statement of financial position:
Total assets 1,078 957
Included in total assets:
Assets relating to stores purchased from Lakewell 1 171 -
Trade receivables 2 42 22
Goods in transit (part of inventory) 3 12 -
Cash and cash equivalents 36 81
Included in total liabilities:
Holiday pay obligation 4 21.1 11.6
Employee numbers 7,000 6,200
Bank loans 251 75
Current ratio 2.6 1.4
Gearing ratio 31% 11%
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Notes:
1. Assets relating to stores purchased from Lakewell Co
To expand into new locations, 20 stores were purchased from Lakewell Co, a clothing retailer, on 1
May 20X5, at a cost of $171 million. Mercurio Co purchased the stores using their cash reserves.
Lakewell Co was facing going concern problems and offered the stores for sale as part of a
restructuring programme.
The stores need to be completely refitted at an estimated cost of $9 million each. Mercurio Co’s
management has not yet decided how many of the stores will be retained for use in the business;
any which are not retained will be sold. The stores will be refitted during the period November
20X5 to January 20X6.
2. Trade receivables
While the majority of sales are for cash, an increasing number of customers have credit accounts
with Mercurio Co. The company offers credit customers 60 days’ credit to pay for goods. The
forecast trade receivables balance at 30 September 20X5 is $42 million (20X4 – $22 million). Due to
the growth in sales to customers on account, in December 20X4, Mercurio Co engaged Fairbank
Co, a service organisation, to provide the credit control function.
3. Goods in transit
In June 20X5, Mercurio Co purchased $12 million of pet food supplies from an international
supplier, with the sales contract stating that ownership of the goods passed to Mercurio Co at the
date of shipping. During transit, the ship carrying the goods was involved in an accident which
destroyed the entire supply of goods. Mercurio Co’s directors had arranged insurance on the
shipment of goods, and the policy states that 80% of the goods destroyed are covered by the
insurance. The latest correspondence from the insurance company was an informal email that the
claim had been received and was due to be processed. These purchases are made in Mercurio
Co's operating currency.
4. Holiday pay obligation

Mercurio Co has an internal audit department, who have been testing the controls in the
company’s payroll system. Internal audit procedures have revealed that some employees are
duplicated on the payroll system; this seems to have happened when two different systems used
for recording full-time and part-time staff were merged in October 20X4. Additionally, the internal
audit team’s procedures have found that while the systems have the capability of recording
holidays taken by staff, this is not always used, and manual records are also maintained in relation
to holiday entitlement. Employees are entitled to carry forward a maximum of 3 days of unused
holiday entitlement to the next year. Management estimates a holiday pay obligation relating to
unused holiday entitlement at the year end using the previous year’s obligation and adjusting it for
pay rises and changes in staff levels. The holiday pay obligation forecast for 30 September 20X5 is
$21.1 million (20X4 – $11.6 million).
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Exhibit 4: Meeting notes
Notes from meeting with Kate Fleming, Mercurio Co finance director
This year has seen a significant business development for the company. The company has started to sell
products under its own brand, introducing the ‘Mercurio Range’ of premium pet food and accessories.
The products are manufactured in another country and imported, and purchases of Mercurio brand
goods from foreign suppliers are predicted to be $7 million for the year to 30 September 20X5. The
range was introduced for sale in June 20X5, and was heavily promoted. Having been only recently
introduced, sales of products from the Mercurio Range will be insignificant in this year’s financial
statements. However, projections in the management accounts indicate that the Mercurio Range is
expected to account for 30% of revenue in the financial year to 30 September 20X6.
During the year, Mercurio Co took out an additional bank loan to aid with cash flows for the new
Mercurio brand promotion and the forthcoming refitting of the stores purchased from Lakewell Co.
Solution:
BR AR
Specific import 影响收入、可能出现罚款 ×
restriction and welfare 此时尚无明显的罚款迹象，故不提及
standard provision/contingent liability
veterinary clinics 是否有合格的从业人员，不专 ×
兽医诊所业，影响声誉，影响销售
有可能出现罚款，
Revenue ×  Mgt bias（上市公司+融资压力）
(√)
 提前确认收入(√)
 Operating Segments (×)
该计划只是公司产品的一种储值形
式，不属于一个单独的业务，故不
属于 operating segment
Purchase from Lakewell 资金压力更新支出大  PPE/Investment property/HFS 分类
Co  更新后续支出不属于期后事项
Trade receivable ×  Allowance 是否足额计提
Goods in transit 影响销售影响声誉  Inventory impairment
 Contingent assets
Holiday pay obligation 内控/财报准确性  内控薄弱
影响管理层监督业务  金额被高估【结合员工人数分析】
Loan Gearing 上升公司风险上升
Mercurio brand 海外的政策法规是否了解
是否有相关经验
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Briefing notes
To: Ted Hastings, audit engagement partner
From: Audit manager
Subject: Mercurio Co audit planning
Date: 2 July 20X5
Introduction
These notes are prepared to assist in planning the audit of Mercurio Co for the year ending 30
September 20X5. Using information provided by the company’s finance director, the business risks
facing the company are evaluated, and the significant risks of material misstatement are identified,
prioritised and explained. In addition, the notes discuss the impact which the company’s outsourced
credit control function will have on our audit planning, and finally recommend the principal audit
procedures in relation to the holiday pay obligation.【4 分问题串联在一起即可】
(a) Business risk evaluation【任写 4 点即可】

Specific import restriction and welfare standard
Some stores sell more unusual pets such as spiders, snakes and other reptiles and require compliance
with specific import restrictions and welfare standards, which means the animals which are for sale
must be kept in a safe and clean environment, if there is any breaches of any relevant regulations,
it will bring risk to the reputation of the risk and have negative impact to sales, besides, the unusual
pet may need special delivery chain, which would increase the cost and have pressure cash flow.【2
分】
Veterinary services
The staffs of the veterinary service may not qualified and experienced enough, exposing pets to a
poor quality of health care. There is a risk that pets are injured or die while under the care of the
vets which leads again to a reputational risk, as well as having possible legal consequences.【2 分】
Purchase from Lakewell Co

The acquisition cost is $171m, which is a significant cash outflow and the store need to be completely
refitted at an estimated cost of $9 million each, which means the total refit cost is about $180 m($9*20)
【0.5 分】 these may put pressure on the company’s liquidity, especially given the projected
reduction in cash of $45 million($81-$36)【0.5 分】in the year to 30 September 20X5.【2 分】【也
可以提及是否可以按时更新完毕】
Goods in transit
Mercurio Co purchased $12 million of pet food supplies from an international supplier and during
transit, the ship carrying the goods was involved in an accident which destroyed the entire supply of
goods, the damage of the goods may incur higher costs to transport goods from others suppliers
and may cause delay or no goods to sale, the Mercurio Co’s reputation would be damaged further
sales.【2 分】
Holiday pay obligation

Internal audit procedures have revealed that some employees are duplicated on the payroll system; this
seems to have happened when two different systems used for recording full-time and part-time. The
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duplication of the payroll will result inaccurate financial reporting and management information
which may make management hard to monitor the performance of the company.【2 分】
Mercurio brand
Importing the new Mercurio Range products from foreign countries exposes the company to the risks
associated with international trade, such as currency exposure, inflation and changing regulatory
frameworks. Besides, whether Mercurio Co has enough experience for premium pet food and
accessories is questionable, if there is any problem in new brand, it could have bad influence to
Mercurio Co’s reputation and this may, consequently, lead to a reduction in sales for existing brand.
【2 分】
Loan
The bank loan is increased from $75m to $251m, which is increased by 234%【0.5 分】, the gearing
ratio is increase from 11% to 31%, but the refitting of the store would still need $180m, which would
increase Mercurio Co’s gearing further. What’s more, if the Mercurio brand fails, the profit of
Mercurio Co would be affected, which may put the risk that bank may recall the loan.【2 分】
合计：15.5 分最高 8 分
b) Risk of material misstatement……
c) ……
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Part B Matter & evidence
Chapter 3 Matter & evidence
1. Matters vs Audit risk

相同点：
答题思路一样，都是考虑准则的难点或问题
区别：
数量/分值有区别
 Audit risk
多个准则放在一个综合案例里考
通常每个科目只写一点
 Matters【考核更加深入】
通常一个案例只涉及一个准则
根据案例信息及分值可能写很多点
结论都是写对科目的影响，但是话术有细微区别
 Audit risk：
There is a risk XXX 科目 would be over/understated
 Matters:
直接写：XXX 科目 would be over/understated
也可以写审计师程序的方向：Auditor should carefully review and consider management’s
assessment of value in use and assumptions implicit in its calculation.
2. 重要性水平
使用 Profit(5%)或 Asset/Revenue(1%)进行计算
 可以用账面余额，发生值或错报进行计算
位置：
 使用账面余额或本期发生额计算重要性水平写在第一段，使用错报金额写在分析之后。
Eg:
The carrying amount of the investment property represents 2.6% ($353,000/$13.8 million) of
Lifeson Co’s total assets, so it is material to the financial statements.
如果题目提供重要性水平，直接进行比较皆可，超过任意一个数字即说明是重要的。
Eg:
Materiality has been set at $800,000 for assets and liabilities and $250,000 for income and
expenses.
The misstatement is $125,000, which is not material individually.
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3. 写作常见格式
 准则要求+案例信息(对于题目给分点说时，需逐项展开说明)
 违背准则
 准则允许但有操纵利润的空间（Fair value, Reversal of impairment）
 与准则一致（通常不写凑分专用）
 已经出错，提及科目影响
 分析可能被操纵的可能性
 错报的重要性水平（对于案例无法计算出错报的可以不写）
*不考虑 new client 的影响
4. Audit procedures 常见思路

Audit procedures=Substantive procedure【Analytical procedure+ Test of details】
了解情况
 Legal contract【需写清查看的内容，eg：purchase date，payment terms】
与目的相关（IP，并购等）
 Board minutes/discuss with management
发生变化【eg：从成本法变为市价法，减低准备金率】
 Discuss with management to understand the reasonableness for ***, considering consistency
of auditor’s understanding. 【与管理层询问变化原因】
发现分类出错时
 Discussion with management about the misclassification of xx and their reasons, to
consider its reasonableness.
与付款相关的
 bank statement and cash book【要区分本期还是期后】
确认数字的准确性
- Obtain the client working papers for xxx and recalculate in order to confirm the accuracy of
the client’s calculation.
对于有一定规律的计算(eg: 收入、费用、工资、 cash flow forecast)

- Develop an independent expectation using the previous year’s XX and compare this to XX and
salaries and investigate any significant differences. (Analytical procedures)
确认金额的途径
 Valuation report/Contract/Quotation(报价)/Correspondence between the potential buyer
与 Fair value 相关的【PPE/IP/Intangible assets】

 Discuss with management to understand the reasonableness of using fair value model,
considering consistency of auditor’s understanding.
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 Obtain details of the external expert and assess their expertise and objectivity through
assessment of their objectivity and competence.
 Obtain a valuation report by an independent external expert and assess the assumption is
reasonable.
Impairment
确认可回收金额计算假设是合理的
- Discuss with management about the assumption used in the impairment test, considering
consistency with the auditor’s knowledge of the business.
Fair value less cost to sell【根据案例细节进行选择性填写】

- Obtain and review any external valuation report which the company has used as a basis of
the fair value less cost to sell, and evaluate the reasonableness of any assumptions used in
the valuation.【评估报告】
- Inspect offers received to purchase the retail outlets/copies of correspondence between
the potential buyer and confirm the amounts used to calculate fair value is reasonable.【潜在
用户询价】
- Physical inspect ** to confirm its condition in order to assess the value of ***.
Value in use【根据案例细节进行选择性填写】
- Obtain and inspect company’s cash flow forecast and compare with XXX （eg：actual
sales）to confirm the reasonableness of growth rate/discount rate 等其他关键假设.【考虑合
理性】
5. Audit procedures vs audit evidence

考题问法 Principal audit procedures (4-5 分) Audit evidence (Additional information)
答题要点回答时用动词开头回答时用名词开头
答题结构动作+证据+目的证据/动作名词化+目的
Inspect (动作) correspondence with A copy/review/Inspection (动作) of

estate agents(证据-房产中介) to correspondence with estate agents (证据-
举例
confirm that (目的)** is being actively 房产中介) to confirm that (目的)** is being
marketed actively marketed
Audit procedure 及 audit evidence 常见切换用语

Audit procedure(动词开头) Audit evidence (名词开头)
Discuss with management Notes of discussions with/ Notes of a meeting
with management
Review the board minutes A review (copy) of board minutes
Review the agreement A review (copy) copy of the agreement
Inspect the title deeds Inspection of title deeds
Obtain client working papers and recalculate A copy of client working papers in relation to the
calculation
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6. 分准则学习
1) Government grant
Audit procedures
查看文件及相关条文了解政策
 Obtain the documentation relating to the grant, to confirm the amount, the date the cash was
transferred to the company, and terms on which the grant was awarded
核对现金
 Agree the amount of cash received to the bank statement and cash book.
根据案例情况确认本年可以确认的收入
 Discuss with management about the key terms of grant and understand the reason to recognize
full grant as revenue.
 Confirm the ** (补贴条款要求)and recalculate the amount which should have been recognized as
revenue.
当补贴有花费条件时
 Obtain and review the ** expenditure forecast to confirm the amount planned to be spent on **
(补贴条款要求)during this financial year.
关注退款情况
 Review the terms to confirm whether there are any conditions relating to potential repayment
of part or all of the grant
 Review forecasts and budgets to evaluate the grant condition is met to confirm that repayment
of the grant is not likely.
历年真题：
2019 Sep/Dec Q1 c) ii) √
2018 Dec Q1 c) √
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① 2021 SD Q3 b) ii
It is 1 July 20X5. You are an audit manager in Sol & Co, a firm of Chartered Certified Accountants. You
are currently working on two existing clients.
Barnaby Co are both manufacturing companies with a financial yearend of 31 March 20X5. Both audits
are in the completion phase and you are in the process of reviewing the audit files.
Using Exhibit 2 - Barnaby Co:
(b) Recommend and explain the matters which should be discussed with management and principal
audit procedures to be performed in respect of government grant.
(6 marks)
Exhibit 2
You are preparing for a discussion with the management of Barnaby Co about misstatements identified
in the financial statements during the audit for the year ended 31 March 20X5. The audit working
papers contain the following schedule of uncorrected misstatements prepared by the audit team.
Barnaby Co's financial statements, prior to any adjustment for the items below, show profit before tax
of $43 million (20X4: $45 million) and total assets of $105 million (20X4: $120 million).
Schedule of uncorrected misstatements
Statement of profit or Statement of financial

loss position
Debit Credit Debit Credit
$million $million $million $million
(i) Government grant 5 - - 5
(i) Government grant

Barnaby Co received a government grant on 31 December 20X4 to invest in new machinery. A
condition of the grant requires the funds to be invested within 12 months of the grant date or it
becomes repayable. The grant has been recognised in full in the statement of profit or loss for the
year, however, the machinery has not yet been purchased. The finance director of Barnaby Co
assured the audit team that the money will be invested by 30 September 20X5.
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Solution:
Matters【思路与 AR 一致】
Government grants to be recognized in profit or loss on a systematic basis over the periods in which
the entity recognizes as expenses the related costs for which the grants are intended to
compensate(准则要求). The grant is related to new machine, but it has not yet purchased, so the
grant amount of $5 million should have been recognised as deferred income other than income (案
例信息), (1 分) as a result, profit is overstated, and liabilities are understated (指明对财报具体科目
的影响). (1 分)
此处，也可以提及退款情况。
As the grant represents 11·6% of profit before tax and 4·8% of total assets, this is material. (使用错报计
算重要性水平时，建议放置在文字分析之后 1 分)
Procedures:
查看合同条款
 Obtain the documentation relating to the grant, review the terms to confirm the amount, the date
the cash was transferred to the company.
核对收款
 Agree the amount of cash received to the bank statement and Barnaby Co’s cash book.
根据案例条件确认资本性支出及市场支出将在本年花出
 Obtain and review the Barnaby Co’s capital expenditure forecast to confirm the amount planned to
be spent within 12 months.
关注可能的退款情况
 Review the terms to confirm whether there are any conditions relating to potential repayment of
part or all of the grant
合计 7 分最高 6 分
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2) Inventory
附有退货条款的存货
This means that the inventory should only be recognised as a purchase and corresponding inventory
amount where XX Co (买方) no longer has a right to return the assets, i.e. when they are sold to a
customer
Inventory should not be recognized, instead, it should be showed as a receivable due from the new
supplier to the inventory purchase price as they potentially have the right to receive a refund for this
amount. 【不应确认存货，而应被确认应收账款】
Evidence【每点 1 分】
了解合同条款
 Copy of the contract with the new supplier to understand and confirm the terms and conditions of
the sale or return arrangement and the amounts involved.
确认未销售存货的数量
 Copy of the inventory records to confirm the total value of inventory received from the new
supplier which was unsold at the year end. 【审计师看别人的盘点报告】
 Copy of physical inspection report of auditors to confirm the volume of the inventory which
unsold at the year end.【审计师亲自数】
确认应收账款应记录的金额
 A copy of the calculation of how much of the inventory held was eligible for return, recalculate
for accuracy and agreed to contract terms.
询问错误原因-【万金油答案】
 Discussion with management about the misclassification of the inventory which can be
returned and their reasoning for classifying this as inventory.】
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3) PPE
① 2020 Mar Q1 b) ii)-PPE+RPT

It is 1 July 20X5. You are a manager in the audit department of Atlanta & Co, a firm of Chartered Certified
Accountants. You are working on the audit of the Rick Group (the Group), which has a financial year
ending 30 September 20X5.
(b) Using the information provided in Exhibit 4:
(ii) Design the principal audit procedures which you will instruct the component auditor to perform on
the sale of property to the Group chief executive officer. (6 marks)
Exhibit 4 – Extract from component auditor strategy document
Solution:
Disposal (Sale of property)
Dr Cash/Trade receivable (此处如果是 TR 需折现-2021 Sep/Dec Q3 b) ①
Accumulated deprecation
Loss of income statement
Cr PPE(采购发票金额) ③
Sale of property-考试时无需写此标题
 Agree the $50,000 sale price to the legal documentation/sales invoice relating to the sale of the
property to the Group CEO.
 Agree the carrying amount of the property at the date of disposal to underlying accounting
records and the non-current asset register.
 Inspect the asset register and confirm the asset has been removed from the company accounts at
the date of disposal.
 Recalculate accumulated depreciation on the PPE disposed of and ensure it is reasonable.
 Recalculate the profit/loss on disposal and agree to statement of profit or loss.
Related party transaction-考试时无需写此标题

 Review board minutes for approval to confirm the rationale for the transaction see if the property
sale has been deliberated.
 Obtain written representations from company management that all matters related to this related
party transaction have been disclosed to the Group management and to the Group audit team
 Review cash receipts after the reporting date to confirm whether or not the $50,000 has been
received from the Group CEO.
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PPE
Audit procedures:
Addition -了解
 Select a sample of PPE from the assets register (固定资产登记账) and perform physical
inspection to ensure existence.
 Select a sample from asset register and compare the cost recorded to purchase invoice to
confirm cost is accurate.
Depreciation (Cost model)-了解

 Reasonableness of depreciation
 Discuss with management about the useful life, residual value of the PPE, review the
reasonableness/rationale of the depreciation charges.
 Confirm the reasonableness of these changes, by comparing the revised depreciation rates,
useful lives and methods applied to PPE to industry averages and knowledge of the business.
(如果折旧政策发生变化)
 计算是否准确
 Select a sample of PPE and recalculate the depreciation charge to ensure that the non-
current assets register is correct
Revaluation (Fair value model)- 2019 Mar/Jun Q3 b) iii)
Fair value 通用：

reasonable.
 Recalculate the revaluation gain and inspect to ensure it is recorded corrected in OCI other
than Profit or loss.
 Obtain the non-current asset register, confirm the carrying amount of the property prior to
any change in fair value being recognized.
Disposal (Sale of property)-2020 Mar Q1 b) ii)

Dr Cash/Trade receivable (此处如果是 TR 需折现-2021 Sep/Dec Q3 b) $1,000 ② ②
Accumulated deprecation 10,000 ⑤
Loss of income statement $39,000 ⑥
Cr PPE(采购发票金额) $50,000 ④ ④
① Cash: Agree sale proceeds to supporting documentation (such as sundry sales invoices) and trace
to cash book and bank statement.
② TR: Agree the sale price to the legal documentation/sales invoice relating to the sale of the
property.
③ Confirm the carrying amount of the property at the date of disposal to underlying accounting
records and the non-current asset register.
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④ Confirm that the asset has been removed from the company accounts/asset register at the date
of disposal.
⑤ Recalculate accumulated depreciation on the PPE disposed of and ensure it is reasonable.
⑥ Recalculate the profit/loss on disposal and agree to statement of profit or loss.
4) Related party transaction
围绕交易是否合理展开检查
 Review board minutes for approval to confirm the rationale for the transaction see if XXX has
been deliberated.
 Obtain written representations from company management that all matters related to this related
party transaction have been disclosed to the Group management and to the Group audit team
 Review cash receipts/payment after the reporting date to confirm whether or not the $** has
been received/paid from the Group CEO. (通过期后是否收款/支付来确认交易的真实性)
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PPE-Fair value measurement-SBR
The fair value measurement of PPE should use the value in highest and best use or by selling it
to another market participant who would use the asset in its highest and best use.
The highest and best use should take into account the use of the asset that is physically possible,
legally permissible and financially feasible
When considering alternative uses for non-financial assets, the valuation should consider all costs
associated with the alternative uses（在核算时，应扣除后续的转化成本）.
$m
①Value in its current use 20
②Value in alternative use 28(30-2)
Value as a development site 30
Conversion cost (Convert land to a vacant site) 2
Higher of ① or ② 28
③ 2019 Mar/Jun Q3 b) iii)
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Solution：
Matters
The proposed valuation of the property at $4.9 million represents 8.4% of assets and is material to
Awdry Co’s statement of financial position as at 28 February 20X9. (1 分)
The fair value measurement of PPE should use the value in highest and best use or by selling it to
another market participant who would use the asset in its highest and best use (准则要求). (1 分)
In the case, the depot has uplifted to fair value of $4.9m, which is 96% (4.9-2.5)/2.5) (0.5 分) higher
than carrying value(案例信息), if the estimate is too optimistic(指明问题), then PPE would be
overstated (科目影响).
Besides, when considering alternative uses for PPE, the valuation should deduct all costs associated
with the alternative uses (准则要求) (1 分). Hence, the conversion cost of $1.2m and legal fee of
$0.173m should deducted from fair value, the fair value should be $3.537m (指明问题), otherwise
PPE would be overstated(科目影响).
Procedures (每点 1 分)
物理及经济可行性
 Physically inspect the building to assess its condition and to perform an initial assessment of whether
it might be suitable for conversion into residential apartments.
 Review Awdry Co’s cash flow statements and forecasts to ensure the project is financially feasible.
Selling it to another market participant

 Obtain a valuation report by an independent external expert and assess the assumption is
reasonable.
 Obtain details of the external expert and assess their expertise and objectivity through assessment
of their objectivity and competence.
Conversion cost and legal cost

 Inspect the quotation or contract with the building contractor to confirm the expected cost of $1.2
million.
 Inspect correspondence with the local building regulator confirming the fees of $173,000.
Carrying value
 Obtain the non-current asset register, confirm the carrying amount of the property prior to any
change in fair value being recognized.
合计 10.5 分最高 5 分
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5) Investment property
Audit procedures:
确认符合投资性房地产确认原则
 Discuss management to confirm its intention to hold the property to earn rentals and for capital
appreciation-确认持有目的
 Physical inspect the building by the auditor in order to confirm the building is rentable. (no
longer occupied by company)-确认达到可租赁状态
 Inspect title deeds to confirm its ownership of the investment property.-确认所有权
核对付款额
 Agree the amount of cash payment to the bank statement and cash book
确认升值金额并确认会计处理正确-2021 Sep/Dec Q1 c), 2019 Sep/Dec Q2 a) ii)

reasonable.
 Recalculate the revaluation gain and inspect to ensure it is recorded corrected in profit or
loss other than OCI.
对初始账面价值进行确认
 公司直接购入投资性房地产：
Compare the carrying amount of the property with the non-current asset register to confirm
accuracy of initial value.
 从固定资产(商品房-存货)转入投资性房地产
Inspect the carrying amount at the date of the change from the non-current asset register (or
from inventory) to confirm the correct amount of the fair value gain.
查看披露(一般不写)
 Review the disclosures made in the financial statements, such as details of the external
valuation, to ensure they comply with the requirements.
历年真题：
2021 Sep/Dec Q1 c) √
2019 Sep/Dec Q2 a) ii)√
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① 2019 Sep/Dec Q2 a) ii)
It is 1 July 20X5. You are a manager in the audit department of Peart & Co, a firm of Chartered Certified
Accountants, responsible for the audit of Lifeson Co for the year ended 31 March 20X5. Lifeson Co is an
unlisted retail company which is a new audit client of your firm this year. The company’s draft financial
statements recognize profit before tax of $2.15 million (20X4 – $1.95 million) and total assets of $13.8
million (20X4 – $12.7million).
(ii) Investment property

Lifeson Co owns a building which it has used as a warehouse to store inventory. On 1 April 20X4 the
building, which had not suffered any historic impairments, had a carrying amount based on depreciated
historic cost of $323,000 and a fair value of $348,000. On this date, Lifeson Co vacated the building and
moved the inventory to new larger premises. Management decided to keep the building in order to rent
it out as a storage facility to local businesses and to benefit from any increases in property valuations. On
31 March 20X5, the building had not been let and it had a fair value, according to an external valuer, of
$353,000. The draft financial statements for the current year recognize the building as an investment
property at a carrying amount of $353,000 and include a fair value gain of $30,000 in profit before tax
for the year. Since reclassification as an investment property, depreciation has not been charged in
relation to the building.
(6 marks)
Required:
Comment on the matters to be considered and explain the audit evidence you would expect to find
during your review of the audit working papers in respect of the issues described above.
Note: The split of the mark allocation is shown against each of the issues above. (即 matters 最高 3 分，
evidence 最高 3 分) [如果没有此说明，则合计 6 分即可，比如 matters 4 分，evidence 2 分]
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Solution：
Matters
Materiality
The carrying amount of the investment property represents 2.6% ($353,000/$13.8 million) of Lifeson
Co’s total assets at the reporting date and is material to the financial statements. (1 分)
Investment property is held to earn rentals or for capital appreciation(准则要求). Lifeson Co’s
warehouse has been vacated on 1 April 20X4 and management decided to rent it and therefore
qualifies as an investment property (案例信息). (1 分)
Investment property standard requires that any resulting increase in the carrying amount should be
recognized in other comprehensive income and any further increase in fair value is recognized in
profit or loss for the year(准则要求). (1 分) In this case, Lifeson Co should recognize the initial increase
of $25,000 ($348,000 – $323,000) in other comprehensive income and the additional increase of
$5,000 ($353,000 – $348,000) in this year’s profit or loss. (1 分) Lifeson Co’s recognition of the full
$30,000 gain in its profit is incorrect (指出问题) and therefore results in an overstatement of profit by
$25,000 (科目影响). (1 分)
Audit evidence (每点 1 分)

确认资产使用用途转换
 Notes of discussions with management to confirm its intention to hold the property to earn
rentals and for capital appreciation. (Written representations from management confirming the
change of use, the relevant date and future intentions.)
 Board minutes for evidence of management discussion of the change of use and for
confirmation of the date when owner-occupation ceased.
 Record of the physical inspection of the building by the auditor in order to confirm its general
condition and that it is no longer occupied by Lifeson Co.
确认 Fair value
 A valuation report of the building by an independent and external auditor’s expert to determine
the respective fair values and the resulting gains.
 Details of the external expert valuer and a working paper detailing the assessment of their
competence and objectivity.
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6) Intangible asset
Audit procedures:
初始计量
 外购无形资产 (License, patent, brand)
- Inspect the contract of the license (patent) and trace with cash book to ensure the original
cost is $**.
- Review management accounts and cash flow forecasts to confirm the future economic
benefit will flow to the company
 研发形成的无形资产 (Development cost)（PIRATE）

- 确认符合资本化条件-2020 Mar Q2 a) ii) iii), 2019 Mar/JunQ1 b) ii)
 Discuss the project with management to obtain related information of the technical
feasibility of the project.
 Review the feasibility report and progress report to indicate the progress of the project
and assess whether the cost can be capitalized.
 Review the cash position and available finance to revaluate whether the company has
sufficient funds to complete the development.
 Review management accounts and cash flow forecasts to confirm the future economic
benefit will flow to the company.
 Discuss with the company’s management to obtain information of how the company will
use the **.
- 确认金额无误
 For those capitalized as development, agree cost incurred to invoice to confirm
accuracy.
后续摊销问题
 确认摊销方法的合理性
- Discuss with management of the reason of the amortization policy, compare with industry
and evaluate the reasonableness.
 确认使用年限和摊销时点 (根据案例信息选择性填写)
- Inspect the contract (agreement) to ensure the useful life is xx years (Discuss with
management the estimated useful life is xx year).
- Enquire with management on the existence of any factors indicating that a shorter useful life
is appropriate. (使用期限孰短原则)
- Confirm with management that xx became operational on xx date (确认开始使用时点，作为
开始摊销的时点)。
 计算折旧进行
- Recalculate the amortization charge for the license (patent) and confirm it is agreed with the
amortization policy (案例中已计算时)
- Discuss with management and obtain the reasons given for the non-amortization and
evaluate the reasonableness. (案例里未计算时)
出现减值迹象
 Discuss with management the indications of impairment of the license (patent) and inspect future
economic benefits.
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历年真题：
2020 Mar Q2 a) ii) iii) √(Chapter 4)
2019 Mar/JunQ1 b) ii)√
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7) Goodwill
Goodwill 的计算(Initial measurement of acquisition) $m
①Purchase consideration (Should Cash consideration 80
reflect the fair value of total Contingent consideration 要折现获得 (折现率
20
consideration paid and payable) discount rate 是否合适)
②Non-controlling interest (NCI-少数  Listed company: Share price at the date of
股东权益) acquisition 50
-Fair value  Non-listed company: Valuation report)
③Total value=①+② 150
④Identifiable net assets on DOA
(Date of acquisition) Due diligence report (尽职调查报告) (30)
-Fair value
Goodwill (premium)=③-④ 120
Audit procedures:
Purchase consideration
 Review the consideration paid(支付的对价) the acquiring company to the bank statement and
cash book (确认购买对价无误).
 For the contingent consideration(或有对价), obtain management’s calculation of the present
value of $**, and evaluate assumptions used in the calculation.
 Discuss with management the reason for using an ** interest rate in the calculation.
Non-controlling interest
 Confirm that the fair value of the non-controlling interest has been calculated based on an
externally available share price at the date of acquisition.
Identifiable net assets on DOA

 Obtain a copy of the due diligence report, review for confirmation of acquired assets and
liabilities and their fair values.
 Obtain details of the external expert and assess their expertise and objectivity through
历年真题：
2018 Sep Q1 b) √
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8) Impairment
1) 什么时候需要做 impairment test

 Goodwill (or indefinite intangible assets)
Should be tested annually for impairment regardless of whether indicators of potential
impairment exist.
 PPE/ Intangible asset (finite life)
The management should consider whether there are indicators of impairment and if necessary,
perform an impairment review. 有减值迹象时(eg：收入下滑，特许经营权被收回), 进行减值测试
2) 如何做减值测试
The recoverable amount of an asset should be measured as the higher value of the asset’s fair
value less cost of disposal and its value in use
$
Carrying amount 100
Recoverable amount (可收回金额)
Higher of: Fair value less costs to sell 30
Value in use 50 必须是基于资产当前状况，
不考虑更新后的状况 -2019
Mar/Jun Q1 b) i)
Impairment loss ($100-$50) 50
3) Reversal of impairment loss-2019 Sep/Dec Q2 a) iii)

The reversal of an impairment loss should not exceed the carrying amount which would have
been determined, net of depreciation, had no impairment loss been recognized for the asset in
prior years.
Eg: 某公司年初购买某项资产，资产初始金额 100,000，可以使用 5 年，假设没有残值，2 年后进
行减值测试是发现 Recoverable amount=41,000，于是减值 19,000，三年重新评估后发现
Recoverable amount=52,000，则可以冲回多少钱？？
第一步：计算减值前的账面金额
Cost of asset 100,000
Depreciation 100,000/5*2=40,000
第二年末 Year end carrying amount 60,000
Recoverable amount 41,000
Impairment 19,000
Depreciation 41000/3=13667
第三年末 Year end carrying amount 41000-13667=27333
第二步：计算假设没有减值第三年末的账面金额
Cost of asset 100,000
Depreciation 100,000/5*3=60,000
Year end carrying amount 40,000
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第三步：进行比较并确认冲回金额
Year end carrying amount 40,000
Recoverable amount 52,000
Lower of carrying amount and recoverable 40,000
amount
Reversal of impairment =40,000-27333=12667
Audit procedures:
查看政策/报告/实地查看是否存在减值迹象
 Obtain a copy of the government regulation and review *** (获得引起减值迹象的相关政策)
 Obtain the report from the safety inspector/Physical inspect to identify whether the machine is
damage and to understand whether there is an indicator of impairment.
确认可回收金额计算假设是合理的
 Discuss with management about the assumption used in the impairment test, considering
consistency with the auditor’s knowledge of the business. (Obtain management’s calculations
relevant to the impairment and review to understand methodology (研究方法)
 If the audit team does not have the necessary skill to prepare the estimate, an expert should be
considered, and all workings and assumptions should be evaluated by the audit team.
 Obtain a written representation from management confirming the reasonableness of its
assumptions and other related management judgements【建议优先写其他点】
Fair value less cost to sell【根据案例细节进行选择性填写】

 Obtain and review any external valuation report which the company has used as a basis of the fair
value less cost to sell, and evaluate the reasonableness of any assumptions used in the
valuation.
 Inspect offers received to purchase the retail outlets/copies of correspondence between the
potential buyer and confirm the amounts used to calculate fair value is reasonable.
 Physical inspect ** to confirm its condition in order to assess the value of ***.
Value in use【根据案例细节进行选择性填写】
 Obtain and inspect company’s cash flow forecast and compare with XXX t to confirm the
reasonableness of growth rate/discount rate 等其他关键假设.【考虑合理性】
 Obtain and inspect company’s cash flow forecast to ensure it is agreed to the value in use
calculation.
 Compare the discount rate used in the value in use calculation to published market rates to
ensure that an appropriate rate has been used.
 If the audit team does not have the necessary skill to prepare the estimate, an expert should be
considered, and all workings and assumptions should be evaluated by the audit team.
确认初始价值
 Inspect the carrying value of ** and compare with non-current asset register to confirm the
accuracy.【建议优先先写其他点】
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重新计算，确认计算无误
 Obtain the client working papers for impairment review and recalculate in order to confirm the
accuracy of the client’s calculation. 【尤其题目当有计算错误时，eg：reversal impairment 出现错
误】
 Inspect the allocation of the impairment to ensure the impairment loss is allocated to goodwill
first, and then to the remaining assets pro rata.【案例有顺序错误时】
历年真题：
科目知识点题号
2021 Mar/Jun Q3 a) ii) √
Intangible assts
2017 Mar/Jun Q1 c) i)
Impairment 2019 Mar/Jun Q1 b) i) √
PPE
2017 Mar/Jun Q4 b)
Reversal of impairment loss 2019 Sep/Dec Q2 a) iii) √
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① 2021 Mar/Jun Q3 a) ii)
Using the information in Exhibit1, comment on the matters to be considered and explain the audit
evidence you would expect to find during your review of the audit working papers on 1 July 20X5.
(a) (ii) Purchased customer list
(8 marks)
Exhibit 1: Audit completion review

MattyCo is a listed transport company, the financial statement is ended 31 March 20X5.
Matty Co's draft financial statements recognize revenue of $60.1 million (20X4-$94.3 million) profit
before tax of$10.5 million (20X4-$22.1 million) and total assets of $28.4 million (20X4-$31.1 million).
Purchased customer list

On 1 April 20X4, Matty Co paid $6.9 million to acquire the customer list of Jess Coaches, a business
which was terminating its operations. Jess coaches hires out coaches and drivers to private and public
sector customers. Its customer list includes many highly reputable listed companies and government
bodies with a customer relationship and trading history going back more than 30 years.
On the basis of this trading history and the associated customer loyalty, the management of Matty Co
assessed the useful life of the customer list as indefinite. The draft statement of financial position as at
31 March 20X5 recognizes the customer list as an intangible asset at a total carrying amount of $6.9
million.
In the second half of the reporting period, however, two of Jess Coaches largest clients moved to a new
competitor. The management of Matty Co believe that while it would be difficult to identify a sales
value for the customer list at the reporting date, they estimate the value in use of the customer list to
be $7.2 million.
Solution:
Matters
Assessment of useful life
The carrying amount of the customer list purchased from Jess Coaches is highly material to Matty Co’s
draft statement of financial position at 24.3% of total assets. (1 分)
Intangible asset should be assessed as finite and indefinite, Matty Co assessed the useful life of the
customer list as indefinite, the customer list includes many highly reputable listed companies and
government bodies with a customer relationship and trading history going back more than 30 years,
however, there is little evidence that the intangible asset can generate cash flow to the entity
indefinite(需阐述准则要点+结合案例) (1 分), this assumption is high subjective and needs to be
assessed carefully by the auditor (1 分).
Impairment review
Intangible assets with an indefinite useful life should be tested annually for impairment(1 分), besides,
two of Jess Coaches largest clients moved to a new competitor already are indicators that the
intangible asset may indeed be impaired(需阐述准则要点+结合案例) (1 分).
According the management’s assessment, value in use of the customer list to be $7.2, which is higher
than carrying amount of intangible assets, so there is no need to recogozie impairment loss, however,
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the assessment of value in use is a highly subjective, especially MattyCo is listed, management may
have incentive to manipulate profit(案例信息+指明问题)(1 分), so auditor should carefully review and
consider management’s assessment of value in use and assumptions implicit in its calculation.(指
明关注的方向) (1 分)
Evidence (每点 1 分)
查看合同
 A copy of the purchase agreement to identify the details of the acquisition including the purchase
consideration, the date of the acquisition.
核对现金
 Agreement of the purchase consideration of $6.9 million to the company’s cash book and bank
statement to confirm purchase price.
Value in use
 A discussion with management about the basis of the calculation of value in use and an
assessment by the auditor of the reasonableness of management’s key assumptions.
 A review and assessment of the company’s cash flow forecast which has been used to support the
value in use of$7.2 million agreed to the value in use calculation.
 A comparison of the discount rate used in the value in use calculation to published market rates in
order to ensure that an appropriate rate has been used.
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9) Held for sale & discontinued operations
Audit procedures
确认符合记录的条件
 Review the board minute to ensure the disposal of the properties was approved by management.
-董事会同意
 Discuss with management to ensure there is active programme in place to locate a buyer, for
example, instructions given to real estate agency. -主动找下家
 Obtain correspondence with estate agents(房产中介) to confirm that ** is being actively
marketed.
 Obtain a written representation from management on the opinion that the assets will be sold
before ** date-1 年以内能卖掉
 Review post year board minutes and significant cash transaction to confirm if any properties are
sold in the period after the year end. -后续跟踪查看是否 1 年内卖出
确认初始价值无误 (有减值测试且减值方式合理)
 Discuss with management to ensure there is an impairment test before year end and review the
reasonableness of the impairment test.
 Use an auditor’s expert to confirm the fair value of the property and agree that this figure has
been used in the impairment calculation.
后续计量
 Recalculate the depreciation calculations, to confirm that depreciation was charged up to **日期
and no further depreciation is charged to the assets as held for sale. (重新计算折旧并确认重分类
后不再计提折旧)
披露
 Review the notes of the financial statement to ensure the held for sale assets are disclosed
separately.
历年真题：
2020 Sep/Dec Q3 a)√
2019 Sep/Dec Q1 b)
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① 2020 Sep/Dec Q3 a) i)
It is 1 July 20X5. You are the manager responsible for the audit of Myron Co, a listed company and you
are in the process of completing the audit of the financial statements for the year ended 31 March 20X5.
The auditor’s report is due to be signed in the next few weeks. The company’s principal operating activity
is the publication of trade and scientific journals.The draft financial statements recognize revenue of $108
million (20X4 – $102 million), profit before tax of $9·3 million (20X4 – $8·2 million) and total assets of
$150 million (20X4 – $149 million).
Sale of division
Myron Co is at the advanced stage of negotiations to sell its scientific publishing division to a competitor.
This division contributed revenue of $13 million and profit before tax of $1·4 million during the year to
31 March 20X5. The draft sale agreement which is due to be finalised by 1 August 20X5 shows an agreed
sale price after costs of disposal of $42 million. The division is a separate cash generating unit of Myron
Co. None of the assets of the division are held under a revaluation policy and depreciation is charged on
a straight-line basis over the determined useful life of the assets.
The finance director of Myron Co has not made any disclosures with respect to the upcoming sale in the
financial statements for the year ended 31 March 20X5 as he considers it to be part of next year’s
accounting transactions. However, the division has been written down from its current carrying amount
of $45 million to its estimated value in use of $41 million in the financial statements for the year ended
31 March 20X5.
Required:
(i) Comment on the completion matters to be considered in relation to the issues described and
recommend the further actions necessary before the auditor’s report can be signed;
(8 marks)
Solution：
Matters
Sale of division
Materiality
The assets of the division represent 27.3%(41m/150m)of the company’s total assets, which means
material to F/S (科目的重要性水平-如果已经使用错报计算，此处可不进行计算). (1 分)
In the case, management has decided to sell the division and a buyer has been found, which means
the division is highly probable to sale in 12 months, the sale of division should be classified as held for
sale（准则+案例）. (1 分)
Impairment review should be required as the assets should be held as lower of carrying value and
recoverable amount (详细的阐述准则有可能得到额外的分值)(1 分), in the case, the agreed sale price
of disposal is $42m, so the recoverable amount should be $42m, other than $41m, otherwise, assets
and profit would be understated by $1 million. (1 分)
This represents 10.7% of profit before tax and is material to the profit for the year. (使用错报来计算重要
性水平)(1 分)
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Besides, depreciation should be ceased after held for sale is classified, continue to charged depreciation
would understate assets. (1 分)(没有案例信息对应，建议优先写其他点)
What’s more, since the division is a separate cash generating unit, so this represent a separate major
line of or a geographical area of operations, and it should also be classified as discontinued
operations(1 分), as a specific disclosure should be required, the financial director of Myron Co has
not made any disclosure of the division would mislead users of F/S. (1 分)
Further actions
 The auditor should request that management adjusts the financial statements to recognize the
discontinued operation and to separately disclose the assets held for sale (1 分)
 The auditor should request that management adjusts the carrying amount of the assets to the
recoverable amount of $42 million (1 分)
 If management refuses to adjust the financial statements, the auditor should communicate the
misstatements to those charged with governance (1 分)
 If management still refuses to amend the financial statements, the auditor should consider the
effect to audit opinion. (1 分)
Further action【进一步行动】vs further audit procedures/evidence【进一步程序】

进一步程序是进一步行动的一个方面，进一步行动比较宽泛，通常指审计过程中遇到问题，审计师怎
么跟进，而进一步程序比较具体，指具体的审计程序/证据
常见的 Further action/Relevant action/Action【进一步行动】：

✓ 尝试再一次收集证据以确认自己的认知
Seek further information to confirm the auditor’s understanding
✓ 进一步收集证据【只写方向即可】
Eg：
Further action：
 Further audit procedures should be performed to determine the NRV of the inventory
Further audit procedures:

 Review any invoices raised after the year end for evidence that the items have been sold, to
determine whether a net realisable value exists.【追踪期后销售发票】
✓ 有错就要求管理层改错，如果拒绝修改就与治理层进行沟通过
Request management to adjust all misstatements, if management refuse to make the
adjustments, then the auditor’s request should be communicated to those charged with
governance
✓ 如果问题依旧没有改善，考虑对审计报告的影响
If the issue remains unresolved, the auditor should consider the effect to auditor’s report
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✓ Matters to be communicated those charge with government 遇到以下问题需要考虑与治理层的
沟通
 Suspected frauds
 Non-compliance issues
 If the auditors are intending to make any modifications to the audit opinion, these should
be communicated to those charged with governance. 管理层拒不修改的错报
misstatement】
 Significant deficiencies in the internal control system
 For listed entities, ethical standards and appropriate safeguards
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10) Provision
常见的情况：
 Claims or penalty 诉讼/罚款
 Decommissioning 终止费用 (eg：环境治理成本)
 Redundancy/Restructure 裁员/重组
 Warranty 质保
Dr Expense ***
Cr Provision ***
特殊情况：
 可能需要考虑折现
 需多年支付的赔款
 终止费用
 准则允许准备冲回，但需要考虑其合理性（尤其公司收入或利润下降时）
 不能确认为 provision 的情况
 Estimated repair cost (not contractually obligation)
Audit procedures:
Claims or penalty
确认诉讼是现时义务
 Obtain the notice of legal sue (letter received from**) and review to understand the basis of the
claim.
确认诉讼要支付的可能性
 Discuss with management to understand the claim and their opinion to the claim.
 Discuss the issue with the legal adviser, to understand whether the probability of the company
be liable for the damages(obligation).
持续跟进诉讼进度/查看期后付款
 Obtain and read all correspondence between the Group and XX(原告), to track the progress of
the legal claim up to the date that the auditor’s report is issued.
 Review the after date payment and compare actual payments to the amounts recorded to assess
whether the provision is reasonable. (都可以写)
获得管理者声明
 Obtain a written representation from management, that all known instances of non-compliance
have been made known to the auditor.
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Redundancy/Restructure
确认是现时义务及支付可能性
 Review the board minutes (Discuss with management) to confirm whether the decision（裁员或厂
房翻新）was made in before year end（根据题目时间改写）
 Discuss with management to ensure it is probable that the obligation will be paid
获得管理者声明
 Obtain a written representation from management to confirm the completeness of the provision
确认金额
 For the costs included within the provision, agree to supporting documentation, such as purchase
invoices, to confirm accuracy of provision. (Restructure-重组）
 Recalculate the ** provision and agree to supporting documentation（具体根据题意调整 employee
contract）to confirm accuracy. (redundancy-裁员)
 Review the after date payment and compare actual payments to the amounts recorded to assess
whether the provision is reasonable. (都可以写)
对于金额复杂项目【需多年支付的赔款或终止费用】
 了解项目并评估其合理性
- Obtain a copy of any draft instalment agreement detailing the timing and amount of each
repayment-查看赔偿条款.
- Discuss with management about the key assumptions used by management, including the
discounting rate used in calculation, estimated useful lives.（Evaluation all key assumptions,
considering consistency with the auditor’s knowledge of the business.）
 重新计算金额
- Obtain a copy of management’s calculation of $***, and inspect that all components agreed
to underlying documentations.
 期后跟踪进一步确认金额
- Confirm to post year-end cash book and bank statements if any amounts have been paid
after the year end.
Warranty provision
$ million
At 1 April 2016 11·5
Provisions charged during the year 【本年记录的】 0·5
Provisions utilised during the year 【本年实际使用的】 (1·9)
Unutilised provisions reversed 【冲回】 (3·1)
At 31 March 2017 7· 7.0
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记录时
Dr Expense 0.5
Cr Provision 0.5
使用时
Dr Provision 1.9
Cr Cash 1.9
冲回
Dr Provision 3.1
Cr Expense 3.1
了解退货条款
 Discuss with the sales director confirming the basis of the calculation for forecast returns and
assess its reasonableness.
 Obtain a copy of agreement and inspect the terms of sale offered to customers to confirm the
length of the warranty period.
Reversal 的合理性
 Discuss with the production or quality control manager to identify whether there are any
factors would impact the amount of the provision.( Confirm the total unutilised provisions
reversed during the year and discuss with management to assess the reasonableness of basis for
calculation of previous provision.)
 Review the total returns received following the year end and trace to provision recorded to
assess its reasonableness.
历年真题：
2019 Mar/Jun Q3 b) ii)√
Claims or penalties
2017 Sep/Dec Q1 c)
Provision
Decommissioning 2017 Sep/Dec Q2 a)
Warranty 2017 Mar/Jun Q4 c) √
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① 2019 Mar/Jun Q3 b) ii)
3 (b) You are the manager responsible for the audit of Awdry Co, a listed entity whose principal activity
is the operation of a regional railway network. The audit for the year ended 28 February 20X9 is the
first year your firm has audited Awdry Co. The draft financial statements recognize total assets of
$58 million and profit before tax of$7.4 million. The detailed audit fieldwork has started and the audit
supervisor has brought the following matters to your attention in relation to the testing of key
accounting estimates:
(ii) Regulatory penalties
Awdry Co has been subject to a review by the national railways regulator following a complaint from
a member of staff with safety concerns. The regulator identified breaches in safety regulations and
issued a penalty notice on 30 September 20X8. Awdry Co has appealed against the initial penalty
payable. Negotiations with the regulator are still ongoing and the amount payable has not yet been
finalised. Awdry Co currently estimates that the total penalty payable as a result of the breach will
be $1.3 million which it expects to repay in equal annual instalments over the next ten years with the
first payment falling due on 1 March 20X9. The company’s draft statement of profit or loss for the
current year recognizes an expense of $1.3 million and the draft statement of financial position
includes a liability for the same amount.
(6 marks)
Required:
(i) Evaluate the client’s accounting treatments and the difficulties which you might encounter when
auditing each of the accounting estimates described above; and
(ii) Design the audit procedures which should now be performed to gather sufficient and appropriate
audit evidence.
Solution:
The expense recognized in this year is $1.3 million. It is material as it represents 17.6% of profit and 2.2%
of assets. (1 分)
The penalty is a present obligation from past event, and Awdry Co has appealed against the initial
penalty payable, so it is probable to pay, the provision should be recognized.【本题的重点是折现问
题，此处也可以简写为：The penalty is a present obligation from past event（不再具体分析可能性问
题）】 (1 分) But penalty is expected to be paid over the next ten years, the time value of money is
material, so the amount of a provision should be the present value and the cash flows for the repayment
of the fine should be discounted by an appropriate rate. (1 分)
However, the amount of fine has not yet been finalized, so the estimate is based on management’s
judgement (1 分), besides, the appropriate discount rate is also need to estimated and is highly based
on management’s judgement, both need auditor’s attention to determine the reasonableness and
accuracy. (1 分)
Procedures (每点 1 分):

考虑付款的可能性
 Inspect Awdry Co’s correspondence with its lawyers in order to ascertain current status of
negotiations and the views of its legal advisers.
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确认金额（考虑付款日期，从而更准确的进行折现）
 Discuss with management about the key assumptions used by management, such as the
discounting rate used in calculation.
 Obtain a copy of the regulator’s notice (correspondence with the regulator) detailing the date of
the issue and any indication of the amount of the penalty to be paid by Awdry Co.
 Obtain a copy of any draft instalment agreement detailing the timing and amount of each
repayment.
 Review Awdry Co’s cash flow statements and forecasts and recalculate to ensure the accuracy of
the present value of the provision.
跟进期后付款
 Confirm to post year-end cash book and bank statements if any amounts have been paid after the
year end.
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11) Share-based Payment
Audit procedures:
获得相应的协议了解条款
 Obtain a copy of the contractual documentation for the share-based payment scheme and
confirm:
– grant date and vesting date (授予日和行权日)
– number of executives and senior employees awarded share appreciation rights (授予人数)
– number of share appreciation rights(股票增值权) awarded to each individual member of staff
– vesting conditions attaching to the share appreciation rights. (行权条件)
确认计算的假设是合适的
 确认人数合理
– Discuss the basis of staff retention assumptions with management and challenge their
appropriateness
– Obtain details of historic staff turnover rates obtained from the human resources and
consider this in conjunction with the assumptions made by management.
 确认股票增值权估计合理
- Evaluate the reasonableness of the model used to value the share appreciation rights and
considering consistency with the auditor’s understanding.
- Review of the expert’s valuation including an assessment of the assumptions used in order to
determine the fair value of the share appreciation rights.
重新复核计算过程
 Obtain the client working papers for the value of the share appreciation rights and recalculate in
order to confirm the accuracy.
历年真题：
2019 Mar/Jun Q3 b) i)√
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12) Sale and leaseback
Audit procedures of Lease back

确认资产的控制权是否转移
 Review the sale and leaseback agreement (board minutes) to confirm the key details to ensure
control the asset has passed to the buyer
查看合同，了解关键条款
 Review the sale and leaseback agreement to confirm the sale proceeds, rental amounts and
timings, the lease term and the interest rate implicit in the lease.
 Review surveyor reports(鉴定报告) on the property to confirm the expected remaining life of the
property.
The right-of-use asset

 Obtain the client working papers and recalculate the right-of-use asset to ensure it is correct
amount.
Lease liability
 Discuss with management and reassess the rational of calculation of the present value of the lease
payments
 Obtain the client’s working papers and recalculate the present value of the lease payments to
confirm the accuracy of lease liability.
Carrying amount of PPE

 Trace the carrying amount of the property to the non-current asset register to determine whether
the correct amount has been derecognized.
Gain/loss 计算是否正确
 Recalculate any gain or loss on the transaction and confirm it is accurate and agree to statement
of profit and loss.
历年真题：
2019 Sep/Dec Q2 a) i) √
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① 2019 Sep/Dec Q2 a) i)
It is 1 July 20X5. You are a manager in the audit department of Peart & Co, a firm of Chartered Certified
Accountants, responsible for the audit of Lifeson Co for the year ended 31 March 20X5. Lifeson Co is an
unlisted retail company which is a new audit client of your firm this year. The company’s draft financial
statements recognize profit before tax of $2.15 million (20X4 – $1.95 million) and total assets of $13.8
million (20X4 – $12.7million).
The audit is nearly complete and you are reviewing the audit working papers. The audit supervisor has
brought the following matters to your attention:
i) Sale and leaseback transaction

On 31 March 20X5, Lifeson Co sold a property to a leasing company, Clive Co, for its fair value at this
date. The property is situated in a sought after area with a high demand for rental properties for retail
purposes. Clive Co has assessed the remaining life of the property to be in excess of 50 years, and under
the terms of the sales agreement, Lifeson Co will lease the property back from Clive Co for a period of
ten years. Lifeson Co has treated the transaction as a sale and leaseback transaction in accordance with
IFRS® 16 Leases, and derecognized the property in its financial statements and recorded a sale in
accordance with IFRS 15 Revenue from Contracts with Customers.
(8 marks)
Required:
Comment on the matters to be considered and explain the audit evidence you would expect to
find during your review of the audit working papers in respect of the issues described above.
Solution：
(a) (i) Sale and leaseback transaction
Matters
The auditor needs to consider whether control of the asset has been retained by the seller or
whether it has passed to the buyer (准则要求). (1 分) In this case, the lease term of ten years appears
short compared to the asset’s remaining life which is expected to exceed 50 years, and the property
is high demanded for rental properties, so it seems that Clive Co has get the control of the asset (案
例信息), therefore, it appears correct that Lifeson Co treated the transaction as a sale and
leaseback(符合准则要求) (1 分). In addition, it should recognize a lease liability based on the present
value of the lease payments, if the discount rate used for the present value of lease liability is
inappropriate(可能出现的问题), lease liability would be over/understated (科目影响) (1 分).
[注：进一步解释 control of assets 可以得到更多分值：

Control of the asset is defined as ability to direct the use of and obtain substantially all of the
remaining benefits from the asset.-可不写]
Evidence (每点 1 分)
确认控制权是否转移
 A copy of the sale and leaseback agreement reviewed to confirm the key details including in
particular the rights of the lessee and the lessor to control the asset.
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 A review of surveyor reports on the property to confirm the expected remaining life of the
property.
查看合同，了解关键条款
 Review the sale and leaseback agreement to confirm the sale proceeds, rental amounts and
timings, the lease term and the interest rate implicit in the lease.
确认 right-of-use asset 是否正确
 A copy of any client working papers in relation to the calculation of the right-of-use asset to
identify the accuracy.
确认 lease liability 是否正确

 A copy of the client’s working papers for the calculation of the present value of the lease payments
and a recalculation by the auditor to identify the accuracy.
确认 Gain/loss 是否正确
 A schedule calculating any gain or loss on the transaction, recalculated by the audit team and
confirming that it only represents the gain or loss on rights transferred to Clive Co
 Agreement of the sale proceeds as per the sale agreement to the cash book and/or bank
statement.
 Agreement of the carrying amount of the property to the non-current asset register to determine
whether the correct amount has been derecognized.
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13) Segmental information
Being a listed entity, company should provide segmental information in the notes to the
financial statements in accordance with IFRS 8 Operating Segments.
Operating Segments：
1) a component of an entity that engages in business activities from which it may earn revenues
and incur expenses,
2) whose operating results are reviewed regularly by the entity’s chief operating decision maker
3) for which discrete financial information is available
If a segment represents 10% or more of the combined revenue of all operating segments, then it is a
reportable operating segment.
Disclosure
An entity shall disclose information to enable users of its financial statements to evaluate the
nature and financial effect of the business activities.
Audit procedures:
确认的确有 chief operating decision maker
 Review the Group’s organisational structure to confirm the identity of the chief operating decision
maker.
 Discuss with management the means by which segmental information is reviewed by the chief
operating decision maker, e.g. through monthly financial reports and discussion at board meetings
确认分部利润单独核算或披露
 Discuss with management whether ** sales should be reported separately, as ** contributing more
than 10% of total Group sales and is actively monitored.
 Discuss with management whether ** sales information should be disclosed separately, as **
contributing more than 10% of total Group sales and is actively monitored.
确认分部利润之间是否分摊准确
 Perform analytical procedures to determine trends for each segment and discuss unusual patterns
with management.
 Obtain a breakdown of the revenue to confirm that revenue has been appropriately allocated
between the reportable segments
历年真题：
2020 /Dec Q1 b) √
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14) Subsidiary, Joint venture & Associate
Subsidiary Joint venture Associate
控制权＞50% （持股+实际控制权） =50% 20%-50%
除了本身持股数，还需考虑潜在的 option。
如果可能在近期行权（eg：6 个月内），则持股比
Note
例=本身持股数+option 股数
如果大于 50%，即使尚未行权，也需在年末合并
Consolidation Equity accounting
投资收益确被投资单位利润*持股比例*持
被投资单位利润*100%*持有月份
认比例不同有月份
To be recognized on one line
in the statement of financial
列报方式 Require a line-by-line consolidation
position, and the statement of
不同全部合并
profit or loss
只确认投资收益
Audit procedures（重点放在分类上）:
 确认购买细节(eg: 确认股数，控制权及持有意图-为会计计量方式的选择做准备)
 Review the legal documentation between management of the Group and XX Co(被购买方),
to confirm matters such as-根据题意填写 (the amount, the number of equity acquired, the
way of operating after acquisition, terms of options)
 The group board minutes relating to the acquisition and the intentions of management in
relation to XX Co(被购买方).
 Discuss with management about the nature of the profit-sharing arrangement between
XX and XXX to assess the existence of joint control of the venture.
 Discuss with management about the future operation plan after the acquisition of XXX.
 合并
 Review the purchase documentation that the Group has obtained an **% shareholding and
that this conveys control.
 Discuss with Group management the way that control will be exercised over XX Co(被购买
方), enquiring as to whether the Group can determine the board members of XX Co(被购买
方).
 Obtain documentation such as XX Co‘s(被购买方) organizational structure to confirm that
both ** Co(被审计单位)have more than half members on the board of XX Co‘s(被购买方).
 合营
 Read minutes of relevant meetings between XX Co(购买方) and XX Co(被购买方) to confirm
that control is shared between the two companies.
 Obtain documentation such as XX Co‘s(被购买方) organizational structure to confirm that
both ** Co(联营的两家主体) have equal members on the board of XX Co‘s(被购买方).
以上都是与 Classification 相关的程序

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119 / 210
核对现金流 (本年首次购买时核对)
 Inspect cash paid to XX Co‘s(被购买方) and trace to cash book and bank statements.
确认商誉是否正确
 Inspect other supporting documentation relating the acquisition such as due diligence reports(有
助于确认商誉的价值).
核对利润是否确认正确(合并)
 Inspect the correct time of acquisition and recalculate the amount of losses(gains) recognized in
the consolidation/statement of profit & loss.
历年真题：
2018 March/June Q4 a)√
Acquisition
Subsidiary, Joint venture & 2017 Mar/Jun Q1 c) ii)
Associate Joint venture 2019 Sep/Dec Q1 c) i)√
Inter-company transaction 2018 March/June Q4 c)
120 / 210
15) Short term investment(短期投资)
Short term investment (eg: Speculative investments) should be measured at fair value on the
statement of financial position with the associated gains and losses being recognized in profit or loss
for the period
Audit procedures:
确认投资是否被授权审批
 Review board minutes to confirm the authorization and approval of the amount invested.
与管理层确认的持有短期投资的目的【以确认用是否符合短期投资的要求】
 Discuss with management about the intension for the xxx.
核对现金
 Confirm the original cost of the investment to cash book and bank statements.
核对 Fair value
 如果有公开市场
Agree the fair value of the shares held as investments to stock market share price listings at XX
date.
 如果没有公开市场
Obtain details of the external expert and assess their expertise and objectivity through
Obtain a valuation report by an independent external expert and assess the assumption is
reasonable.
确认会计处理正确
 Discuss the accounting treatment with management and confirm gains and losses being
recognized in profit or loss
或
 Discuss the accounting treatment with management and confirm that an adjustment will be made
to recognise the shares at fair value.
历年真题：
2018 Mar/Jun Q4 b)√
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17) Income Taxes
A deferred tax asset is recognized for an unused tax loss carry-forward or unused tax credit if, and
only if, it is considered probable that there will be sufficient future taxable profit against which the
loss or credit carry-forward can be utilised. 只有未来很可能有足够的应税利润时才能确认相应的递
延所得税资产
审计关键点：
是否未来很有可能有足够的应税利润（Profitability forecasts）
Recognition and measurement of deferred tax asset

将计算结果与税务局或账目进行核对
 Obtain a copy of XX Co’s current tax computation and deferred tax calculations and agree figures
to any relevant tax correspondence.
对未来利润预测进行评估【确认未来是否有足够的应税利润】
 Develop an independent expectation of the estimate of future taxable profits to corroborate the
reasonableness of management’s estimate.
 Evaluate the assumptions used in the forecast, considering consistency with the auditor’s
knowledge of the business.
 Assess the time period it will take to generate sufficient profits to utilise the tax losses.
与税务局确认是否有限制条件
 Inspect correspondence from the tax authority to confirm there is no restriction on the ability of
XX Co to carry the losses forward and to use the losses against future taxable profits.
122 / 210
16) Post-employment benefits (Pension)
IAS 19 Employee benefits-SBR

公司定期存钱在自己公司 (通常是一个独立的投资部门)，该部门进行投资，后续根据养老金的收益及
员工的工作年限向员工支付养老金。
初始计量
公司向独立的投资部门存入现金根据养老金未来现金流折现进行负债的确认
Matters: Matters:
Assets must be held by a fund that is  The benefit earned must be discounted to
legally separate from the reporting entity. arrive at the present value of the defined
benefit obligation.
Dr Plan asset (NCA)  The discount rate must reflect market yields on
Cr Cash high quality corporate bonds.
Audit procedures: Dr Current service cost (P&L)

 Obtain the documentation relating to Cr PV of Obligation (NCL-SOFP)
the investment, to confirm assets are
held by a fund that is legally separate Audit procedures:
from the reporting entity.  Compare the discount rate used in the obligation
 Agree the amount of cash payment to calculation to published market rates to ensure
the bank statement and cash book. that an appropriate rate has been used.
 Obtain the client working papers for present
value of obligation and recalculate in order to
confirm the accuracy of the client’s calculation.
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后续计量-每年年末
Remeasurements of plan assets 养老金时间价值的调整
Matters: Dr Finance cost/Net interest cost (P&L)
The difference between the return on plan -根据 Discount rate 折现
asset ant cost of managing plan asset Cr PV of Obligation
should be recognized in OCI (股票收益) or
P&L (债券收益). Audit procedures:
 Obtain the client working papers for finance cost
Dr Plan asset (NCA) and recalculate in order to confirm the accuracy
Cr OCI or P&L of the client’s calculation.
Audit procedures: Remeasure gain or loss

 Obtain the documentation relating to
Matters:
the investment such as contracts and
 Remeasurement gain or losses should be
recalculate the return on plan asset by
recognized each year due to difference between
contract terms.
the year-end actuarial valuation report (精算报
 Discuss the accounting treatment with
告)of the defined benefit obligation and its
management and confirm that an
accounting value. -根据养老金未来精算报告进
adjustment will be made to recognize
行调整
as other comprehensive income.
 Remeasurement gain or losses should be
recognized in other comprehensive income.
Dr Other comprehensive income (OCI)

Cr PV of Obligation
Audit procedures:
 Obtain an actuarial valuation report by an
independent external expert and assess the
assumption is reasonable.
 Obtain details of the external expert and
assess their expertise and objectivity through
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Part C Completion review and reporting
Chapter 4 Overall issues
1. Implication for completion of the audit and further action【在完成阶段对审计师的影响及进一

步行动】
1) Implication for completion【**事件对审计完成阶段的影响】：
✓ 寻找证据的瑕疵
✓ 是否有管理层不配合或者不希望调查的事项【考虑 management integrity】

如有，考虑后续查找过程中增加 professional skepticism，如果有能因此考虑到可能需要
重新评估，考虑是否有必要调低【auditor should reassess materiality to ensure whether
there is a need to lower the materiality in order to obtain sufficient and appropriate
evidence】，会增加更多专业分。
✓ 对于 Fraud、compliance 问题
可以考虑是否有必要对外界报告及保密问题（Confidentiality）
2) Further action/Relevant action/Action【进一步行动】：

✓ 尝试再一次收集证据以确认自己的认知
Seek further information to confirm the auditor’s understanding
✓ 收集证据【证据有瑕疵时-仅指明方向即可】-展开就是进一步程序
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✓ 有错就要求管理层改错，如果拒绝修改就与治理层进行沟通过
Request management to adjust all misstatements, if management refuse to make the
adjustments, then the auditor’s request should be communicated to those charged
with governance
✓ 如果问题依旧没有改善，考虑对审计报告的影响
If the issue remains unresolved, the auditor should consider the effect to auditor’s
report
✓ Matters to be communicated those charge with government 遇到以下问题需要考虑与治

理层的沟通
 Suspected frauds
 Non-compliance issues
 If the auditors are intending to make any modifications to the audit opinion, these
should be communicated to those charged with governance. 管理层拒不修改的错报
missstatement】
 Significant deficiencies in the internal control system
 For listed entities, ethical standards and appropriate safeguards
2. Comments on evidence and further procedures/evidence【找出目前证据的瑕疵】

 Perform inventory count can provide evidence on existence and completeness, but only
cannot provide sufficient evidence on the accuracy of the inventory amounts held
 Invoice/Cash book can only provide evidence an accuracy of balances (original amount) but
can’t provide evidence for NRV/recoverability or the nature of expenditure
 Confirmation can only provide evidence on existence and accuracy of balances, it does not
provide sufficient evidence of recoverability
 Performing an arithmetic check on a spreadsheet does provide some evidence over the
accuracy of the calculations but does not provide sufficient, appropriate evidence for the
reasonableness of the assumption.
 Written representations should be used to support other audit evidence and are not
sufficient evidence on their own, so it is not appropriate to use as the only source
 Verbal confirmation is not reliable enough, other written evidence should be obtained
3. Further action vs further audit procedures/evidence

进一步程序是进一步行动的一个方面，进一步行动比较宽泛，通常指审计过程中遇到问题，审计
师怎么跟进，而进一步程序比较具体，指具体的审计程序/证据
 Further action【进一步行动】: 指审计师针对该问题怎么应对，更加宽泛

对于收集程序指明方向即可：
Further audit procedures should be performed to determine the NRV of the inventory
 Further audit procedure/evidence: 【进一步程序/证据】指具体的审计程序/证据-动作+证

据+目的。
Review any invoices raised after the year end for evidence that the items have been sold, to
determine whether a net realisable value exists.【追踪期后销售发票】
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历年真题
① 2020 Mar Q2 a) ii) iii)
It is 1 July 20X5. You work in the audit department of Saul & Co. The Goodman Group (the Group) is an
audit client of your firm and the audit for the financial year ended 31 December 20X4 is in the
completion stage.
Development costs
In August 20X4, the Group commenced development of a new security system, and incurred
expenditure of $600,000 up to the financial year end, which has been capitalised as an intangible non
current asset. The only audit evidence obtained in relation to this balance is as follows:
- Agreement of a sample of the costs included in the $600,000 capitalised to supporting
documentation such as supplier invoices.
- Cash flow projection for the project, which indicates that a positive cash flow will be generated by
20X8. The projection has been arithmetically checked.
- A written representation from management stating that ‘management considers that the
development of this new product will be successful’.
You are aware that when the Group finance director was asked about the cash flow projection which he
had prepared, he was reluctant to answer questions, simply saying that ‘the assumptions underlying the
projection have been agreed to assumptions contained in the Group’s business plan’. He provided a
spreadsheet showing the projection but the underlying information could not be accessed as the file
was password protected and the Group finance director would not provide the password to the audit
team.
Required:
(ii) Comment on the sufficiency and appropriateness of the audit evidence obtained, and
(iii)Recommend the actions to be taken by the auditor, including the further evidence which should
be obtained.
(6 marks)
Solution:
Development costs
Cost of $600,000 is capitalized to intangible asset, but there is a risk that research costs, which must be
expensed, agreement of amounts to invoice provides evidence of the value of expenditure, but does
not provide sufficient, appropriate evidence to the nature of the expenditure. (1 分)
Performing an arithmetic check on a spreadsheet does provide some evidence over the accuracy of the
calculations but does not provide sufficient, appropriate evidence for the reasonableness of the
assumption. (1 分)
Written representations should be used to support other audit evidence and are not sufficient
evidence on their own, so it is not appropriate to use written representation as the only source for the
feasibility of the new product. (1 分)
Further actions:
Further evidence should be obtained to distinguish between research costs and development costs, and
to support whether all of the development costs can be capitalized. (1 分)【也可跳过直接写 evidence】
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Further evidence(每点 1 分):
 A discussion with the project manager to obtain their view on related on the technical feasibility
of the project.
 A Copy of feasibility report and progress report to indicate the progress of the project and assess
whether the cost can be capitalized.
 Results of any market research to support the assertion that the new product will generate future
economic benefit.
 Notes of discussion with Group financial director about the reasonableness of the assumption
used in the cash flow forecast and agree to post year end cash flow.
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Chapter 5 Subsequent events
考察方式：
 Audit risk（3 分）
 Report+ EOM（6 分）
 Comments &Procedure（6-10 分）
 Quality control（6 分）
1. Auditor's responsibility
Period between the year-end date and the date the auditor's report is signed
 The auditor shall perform audit procedures designed to obtain sufficient appropriate audit
evidence that all events occurring between the date of the financial statements and the date
of the auditor’s report.
Period between the date the auditor’s report is signed and the date the financial statements are
issued
 Management should inform auditor of any material subsequent event between the date
the auditor’s report is signed and the date the financial statements are issued.
 The auditor has no obligation to perform any audit procedures regarding the financial
statements after the date of the auditor's report.(审计报告后，没有义务去执行程序)
However, if a fact becomes known, the auditor shall(但是，一旦知晓，需要跟进):

 Discuss the matter with management
 Determine whether the financial statements need amendment
2. Adjusting vs non-adjusting event

Adjusting events (Record + Disclose)：
Events which provide further evidence of conditions which existed at the end of the reporting
period.
 Cash difficulties of main clients 主要客户期后现金困难-重估应收账款
 Obsolete of inventory 存货期后估值调整-重估存货价值
 Resolution of court case 未决法律诉讼-重估准备
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Non-adjusting events(Disclose)：
Events that relate to conditions which arose after the end of the reporting period(Not exist at
the end of report period)
 Announcement of a major restructuring/acquisition 期后宣布重组/并购
 Issued equity share after the year end 期后发行股票
 Dividends declared after the year end 期后发放股利
 Loss of assets due to fire or flood 期后洪灾、火灾
3. Audit procedures
Inventory obsolete
仅执行以下程序不够：
 Count-existence and completeness
 Invoice-accuracy of accuracy of balances (original amount) but can’t provide evidence for NRV
还需追加以下程序：
 Discuss with management how they assess the sellable amount and agree this amount to any
supporting documentation to confirm the value.
 Review aged inventory report to identify any slow-moving goods, inspect their post year sales
invoice to ensure their written down is appropriate.
 Review correspondence between *** with potential buyer to assess the reasonableness of the
selling price.
 Review post selling price of obsolete inventory to confirm whether the forecast is reasonable.
Receivable uncollectible
仅执行以下程序不够：
 Confirmation- existence and accuracy of balances, it does not provide sufficient evidence of
recoverability
还需追加以下程序：
 Obtain a written representation confirming that the un-adjustment is not material.
 Discuss with management as to why they feel an adjustment is not required.
 The correspondence with the customer should be reviewed to assess whether there is any
likelihood of payment.
 Review the after date receipt to confirm any payments have been received from the customer.
Unsettled lawsuit
 Discuss with management as to whether it is probable that they will pay this sum and obtain a
written representation confirming this.
 The auditor should obtain correspondence from the company’s lawyers to confirm their view
as to whether the settlement is probable and whether there is a likely payment.
 Review the after date payment and compare actual payments to the amounts recorded to
assess whether the provision is reasonable.
历年真题：
2021 Sep/Dec Q3 a)√
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Chapter 6 Going concern
考察方式：
 Matters+ Report +EOM (Material uncertainty related to going concern) （6-10 分）
 Evaluate assumption +Procedures （10-15 分）
 Quality control（5 分）【不能让 junior 进行+Reasonableness】
1. Management and auditor responsibility

Management
 Assess entity's ability to continue as a going concern and present the financial statements
accordingly.
 The assessment should cover at least 12 months from the date of the financial statements
Auditor
 Consider the appropriateness (Assess or detect) of management’s use of the going concern
basis of accounting
 Consider if there are material uncertainties threatening the client's going concern status that
need to be disclosed
2. Events may cast doubt about the going concern assumption（AR & Matters）
 Revenue 或 Profit 下降
 Negative operating cashflows（Overdraft 或现金余额下降）
 Net liability, net current liability
 Indications of withdrawal of financial support by creditors（Overdraft 到期准备延展-Renew）
 Inability to obtain new financing
 Loss of key directors-比如销售总监离开
 Major litigation
3. Evaluate assumption of cash flow（以下内容值得怀疑）

 收入避免过于乐观-避免高估
 前几年收入下降，本年预测收入上升
 新产品有必要质疑是否能成功
 支出考虑完整性-避免漏记
 案例提及的相关成本（eg：并购费，广告费）是否包含在现金预测里
 是否考虑新借款的相关利息
 公司按照借款延展来编制现金流，是否能顺利延展
4. Audit procedures
管理者声明
 Obtain a written representation confirming the director’s view that the company is a going
concern.
综合了解公司的经营及现金流
 Discuss with management about the recent operation and any contingency plans if the
company fails XXX
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 Review cash flow forecast and assess the ability of the company to survive as a going
concern.
 Discuss with management about the key assumptions made by management in the
preparation of the forecast for assess their reasonableness.
 Review the company’s post year end sales and order book to assess if the levels of trade are
likely to increase and if the revenue figures in the cash flow forecast are reasonable.
 Recalculations the cash flow forecast by key assumption in order to check its arithmetic
accuracy.
 如果有具体财报，可以进一步检查收入（eg：market research），成本（contract）-展开说
明
关注是否有融资的可能性
 Review any bank correspondence to assess the likelihood of the bank renewing the overdraft
facility.
 Read the terms of loan agreements and determine whether any key ratios have been
breached.
 Read minutes of the meeting of shareholders to obtain relevant information of financing
difficulties.
 Discuss with the directors whether they have contacted any alternative banks for finance to
assess whether they have any other means of repaying the bank overdraft.
关注是否有进一步诉讼问题
 Inquire of the lawyers of XX as to the existence of litigation and claims, if any exist then
consider their materiality and impact on the going concern basis.
历年真题：
2021 Mar/Jun Q3 a) i)√
2022 Sep Q3 √
2018 De Q2 a) b)√
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历年真题
1) 2022 Sep Q3
It is 1 July 20X5. You are an audit manager in Bing & Co, working on the audit of Geller Co, a book and
magazine publisher.
Geller Co has a financial year ended 31 March 20X5 and you are reviewing the work performed on
going concern.
The following exhibits, available on the left-hand side of the screen, provide information relevant to
the question:
1. Audit file notes – a summary of audit working papers relevant to going concern.
2. Cash flow forecast – a cash flow forecast covering the period to 31 March 20X7 prepared by
management.
Exhibit 1 Audit file notes
Audit working paper
Prepared by: An Auditor

Subject: Going concern issues highlighted for audit manager and proposal for auditor’s report
Date: 29 June 20X5
Our audit work indicates that there are significant operating and financial problems facing the company.
Management has prepared a cash flow forecast which they believe should provide evidence that Geller
Co is a going concern.
Operating problems noted during the audit of going concern

Geller Co’s business is significantly impacted by an industry-wide deterioration in demand for printed
books and magazines. The company has recently acquired a digital publishing business at a cost of $25
million, and management is confident that Geller Co will soon be able to offer a broad range of digital
books and magazines. However, authors of printed books will need to give consent for their books to be
converted to a digital format. This consent must be obtained prior to the books being made available for
sale on digital platforms.
Authors are paid royalties based on sales of their books, typically around 5% of the revenue generated
from their titles. There is concern that due to the company’s cash position, there may be delays in making
royalty payments to some authors.
In addition, the rapid growth of online retailers has impacted negatively on the company’s sales, as Geller
Co has not, until recently, devoted marketing resources to engagement with online retailers. Analytical
procedures show that revenue has declined by 20% this year, accelerating the trend seen in previous years.
In the financial years ended 31 March 20X3 and 31 March 20X4, revenue fell by 10% and 12% respectively.
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The company has recently contracted a very popular author to write a series of three children’s books.
The author, Chandler Muriel, who has sold millions of books worldwide, has delivered the first book in
the series, which was published in January 20X5. Sales of the book since its publication have been
disappointing, at only $135,000. Management explains that this is due to a rival company publishing a
similar book in December 20X4. Chandler Muriel’s second book is due to be published in August 20X5,
and the third in January 20X6.
Financial issues
Geller Co faces a liquidity problem, having only $78,000 of cash at 31 March 20X5. The company has an
overdraft facility of $250,000 and in addition, agreed undrawn borrowing facilities of $1 million. There is
also an existing $5 million unsecured bank loan which is due for repayment on 30 September 20X5.
Disclosure relating to going concern

Management has confirmed that they will provide full details of the going concern issues facing Geller
Co in the notes to the financial statements.
Happy Travels publishing range

Geller Co has made the decision to sell its popular Happy Travels range. This is a range of books aimed
at the student traveller and include maps as well as suggested hostels and activities. Geller Co anticipates
significant interest in the range, with a sale expected in January 20X6.
Exhibit 2 Cash flow forecast

Cash flow forecast for the two years ended 31 March 20X7
Six month periods to:

30 Sep 31 March 30 Sep 31 March
20X5 20X6 20X6 20X7
Note $'000 $'000 $'000 $'000
Cash receipts from 1 10,000.00 10,200.00 10,404.00 10,924.20
customers
Cash receipt from sale of 2 6,000.00
Happy Travels range
Cash outflows relating to 3 (10,400.00) (10,504.00) (10,609.04) (10,715.13)
operating expenses
Interest payments and (125.00) (125.00) (125.00) 0.00
other finance costs
Loan repayment 4 - - (5,000.00) -
Net cash flow (525.00) 5,571.00 (5,330.04) 209.07
Opening cash 78.00 (447.00) 5,124.00 (206.04)
Closing cash (447.00) 5,124.00 (206.04) 3.03
Notes and key assumptions:

1 Monthly sales are based on management's forecasts which predict sales growth of 2% in each six
month period. The sales growth is anticipated based on several assumptions, including that a full
range of digital book and magazine titles will be available from 1 August 20X5 and that closer
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connections with online retailers will drive an increase in sales. In addition, management assumes
that sales from Chandler Muriel's books will generate income of approximately $250,000 per six
month period.
2 Management has recently decided to sell the Happy Travels range of books. The estimated sales
value of the range is based on a multiple of the annual sales generated by the range. This is the
company's standard basis of calculating expected sale prices, which Geller Co has used in recent
years when they have sold other ranges of books. Management is confident that a buyer will be
found and that the sale will go ahead in January 20X6.
3 Operating expenses, including royalties, are forecast to increase by 1% per six month period, in line
with general costs of inflation.
4 Geller Co has a $5 million loan which is due for repayment on 30 September 20X5. Management
has started the process of renegotiating the repayment terms of this loan, and is confident that the
bank will agree to extend the repayment date to 30 September 20X6.
Requirement:
Using the information in Exhibits 1 and 2:
(a) Evaluate the assumptions used by management and the completeness of the cash flow
forecast prepared, explaining why particular assumptions should be challenged and
approached with professional scepticism.
(10 marks)
(b) Explain the audit evidence in respect of the CASH RECEIPTS included in the cash flow which
you would expect to find in your review of the audit working papers on going concern.
(5 marks)
Solution：
3 a)
Cash receipts from customers
Management has assumed growth of 2% in each six-month period, which appears optimistic, given
that this year revenue has decreased by 20% and revenue fell by 10% and 12% respectively in 20X3
and 20X4, which is a continuation and worsening of a longer-term trend. 【前几年公司收入持续下
降，收入预测增长率 2%过于乐观】(1 分)
The assumption that a full range of digital book and magazine titles will be available in August 20X5
seems extremely optimistic. Since the digital publishing acquisition is a recent event and the
auditors of printed books will need to give consent to convent their books into a digital format, it is
29 June now, whether the full range of digital book and magazine titles will be available in one
month.【公司刚刚并购电子业务且上线电子版本需要作者授权，目前距离公司预期的上线时间仅剩 1
个月，是否能上线全线产品存疑】 (1 分)
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Besides, the sales of first book of Chandler Muriel are disappointing at only $135,000 so there is a
question over whether the other books in the series which are due to be published in the next two
years and generate $250,000 each six-month. 【Chandler Muriel 第一本书销售惨淡，后续作品是否
上线存疑，每月收入 25 万值得怀疑】(1 分)
Cash receipt from sale of Happy Travels range

The estimated cash receipt on sale should be challenged. The other ranges of books have
successfully sold in the past, but it does not mean that the same model can be used for this
particular range of books. 【过于产品成功未必保证此次上线成品成功】(1 分)
Besides, since the bank loan due to be paid on 30 Sep 20x5 and the issue of extending is
negotiated, management has a significant motivation for overestimating the sale of Happy Travels.
【公司管理层迫于债务延展压力，存在动机故意夸大该产品销售额】【此段也可以加在 Cash receipts
from customers】(1 分)
Operating expenses
The cost of acquisition of digital publishing business is $25m, Geller Co has devoted marketing
promotion of online retailer, however, the acquisition and market cash outflow is not included in
the cash outflow, so the completes of the cash flow forecast should be questioned.【并购成本及广
告成本没包含在现金预测中】 (1 分)
Besides, operating expenses should include royalty payments relating to the volume of sales of their
books. If sales are expected to increase by 2% per six-month period, then royalty payments would be
also expected to increase, but the forecast only includes inflation but not the increase factor of
sales. 【专利费是基于销量提供给作者的，但现金预测仅考虑通胀未考虑销售的增幅】(1 分)
Interest payments and other finance costs
The company has an overdraft facility of $250,000 and in addition, agreed undrawn borrowing
facilities of $1 million, but since there is liquidity problem, the additional borrowing facilities is
probable to be used, as a result, the interest payment should be increased, but the cash outflow is
static at $125,000 until the loan will be repaid, this should be challenged. 【公司除了透支额，还新增
了借款额度$1m，基于公司目前的流动性问题，借款额度很可能被使用，一旦使用，应产生相应的利
息，但现金预测未考虑该利息】(1 分)
The cash forecast does not include cash outflow of bank loan payment on Sep 30 20X5, although
Geller Co is confident that the bank will agree to extend the repayment date to 30 September 20X6,
since the revenue is fell since 20X3, whether the bank will extend to loan is questionable. 【公司借
款理论上 20X5 年 9 月到期，管理层是按借款延展后的还款日进行预测的，但根据公司目前的收入状
态，银行是否延展贷款存疑】(1 分)
Tax expenses
There does not appear to be any cash flows relating to tax payments included in the forecast. Since
in 20X6 and 20X7 there is positive cash flow, there is possible that Geller Co would have a profit, so
related tax expenses should be included in the cash flow forecast otherwise, the completes of the
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cash flow forecast should be questioned. 【公司在 20X6,20X7 年现金流为正，很可能意味着公司这
两年是有利润的，但现金预测未包含该项金额】(1 分)
(b) Evidence expected on cash receipts

 Notes of written representations from management to confirm the key assumptions made in the
forecast to assess their reasonableness and consistency with auditor’s understanding of the client.
【万金油-可以在检查之前先收集该证据】
确认 Cash receipts from customers

 Notes of a discussion with management to obtain understanding of how management justify a
2% growth rate per six-month period given the company’s recent declining revenues.
 Copies of market research performed on the company’s product ranges to corroborate the
forecast sales figures.
 Copies of most recent sales ledgers to agree with the predicted revenue to confirm the
reasonableness of forecast.
 Copies of agreement between the authors and Geller Co to confirm they have given consent to
converted their books to digital format.
确认 Cash receipts from Happy Travels

 Notes of a discussion with management about the selling plan of Happy Travels range, specifically
to confirm: o whether any buyers have yet expressed an interest, and if so, the stage of any
negotiations.
确认 Operating expenses
 Copies of the digital publishing business contracts and discussion with management about the
reason why they don’t included costs related to digital publishing business contract in cash flow
forecast.
 A copy of the signed contract between Geller Co and Chandler Muriel to confirm the royalty terms
and whether there any royalty payments due.
确认 Interest payments and other finance costs

 Audit documentation of review of the loan agreement between bank and Geller Co and
recalculation the forecast finance cost by agreement terms.
 Notes of the correspondence from bank to confirm the probability the bank loan would be
extended.
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Chapter 7 Audit Report
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1. Implications to auditor (Further actions of auditors) 出现错报审计师怎么办？
 Seek further information to confirm the auditor’s understanding
 Request management to adjust all misstatements
 If management refuse to make the adjustments, then the auditor’s request should be
communicated to those charged with governance
 If the issue remains unresolved, the auditor should consider the effect to auditor’s report.
2. Material misstatement
3. Audit opinion
Types of audit Opinion paragraph
report
Unmodified opinion The financial statements present fairly, in all material respects.
无保留意见
Qualified opinion Except for***[具体原因见 basis for qualified opinion], the financial
保留意见 statements present fairly, in all material respects.
Adverse opinion The financial statements do not present fairly.
否定意见
Disclaimer of opinion We do not express an opinion on the financial statements.
无法表达意见
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常见审计意见：
情况审计意见
错报不超过重要性水平 Unmodified opinion
错报金额不超过重要性水平，但性质超过重要性水平-RPT Qualified opinion
个别科目金额或披露超过重要性水平
Qualified opinion
-包含重大官司的相关披露有问题
包含错报
Qualified opinion
Going concern 披露/终止经营披露有问题
/Adverse opinion
应该 consolidation 而使用 equity method
Adverse opinion
母子公司会计准则不一致
无法收集到充某个科目没有收集到充分适当证据 Qualified opinion
分适当证据 Going concern assumption 未收集到充分适当证据 Disclaimer opinion
4. Basic elements of the auditor's report (顺序不可以调换)

Title(标题)：Independent audits’ report（Listed company）
Addressee(收件人): Shareholders (不能写董事会)
Unmodified opinion-标准 Modified opinion
Unmodified opinion
报告
标题：Opinion 标题：Opinion 标题：
Qualified/Adverse/Disclai
mer Opinion
Basis for Opinion【不提及 Basis for Opinion【不提及错 Basis for xx Opinion
错报】报】不合格的原因
意见
 ISAs  ISAs  ISAs
 IESBA Code of ethics  IESBA Code of ethics  IESBA Code of ethics
(International ethics  Obtain sufficient and (International ethics
standards board for appropriate evidence standards board for
accountant) accountant)
 Obtain sufficient and  Obtain sufficient and
appropriate evidence appropriate evidence
EOM (可能有)： EOM (可能有)：
 Material uncertainty  Material uncertainty
related to going concern related to GC
 Emphasis of Matter  Emphasis of Matter
重大的期后事件重大的期后事件
格式
/Provision /Provision
Key audit matters Key audit matters Key audit matters
Other information Other information（可能 Other information
一致有）一致/不一致
不一致
本章可能的出题题型
 修改已出具报告的问题
 根据案例信息提供审计意见
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准则出错对审计意见的影响（通常 Matters &Audit opinion 一起考）
1) 根据准则要求描述错误点 (Matters)（如果题目独立设问题，则需要根据分值进行回答）
2) 考虑对财报科目的影响（1 分）-高估/低估需计算出错报
3) 计算重要性水平（1 分）
建议使用 profit(5%)及 asset(1%)两个指标进行比较，任意一个指标高即说明是重要的。
4) 考虑对审计意见的影响（1-2 分）
5) 报告格式（1 分）-根据题目情况来定是否写该点。如果分值已凑合，可不写该点。
1 Unmodified opinion
This misstatement is immaterial as it represents XX% of profit before tax. (1 分), so the
auditor’s report would not need to be modified and an unmodified opinion should be given.
格式：
If management intends to leave this as an uncorrected misstatement, written confirmation of
its immaterial nature should be obtained within a written representation.
2 Qualified opinion
If management refuses to make the adjustments to the financial statements, then a modified
opinion should be given, as the misstatement is material but not pervasive and a qualified
opinion should be given.
3 Adverse opinion
The degree of the impact on financial statement is depending on auditor’s professional
judgement, but lack of disclosures of xxx would cause a pervasive impact on the financial
statements, so an adverse opinion would more appropriate.
4 Disclaimer opinion
The degree of the impact on financial statement is depending on auditor’s professional
judgement, but since the lack of evidence is related to going concern, it could be both
material and pervasive, so a disclaimer opinion would more appropriate.
格式：
A basis for qualified/adverse opinion paragraph would be after the qualified/adverse
audit opinion and describe and quantify the effect of the misstatements.
A basis for disclaimer opinion paragraph would be after the qualified/advers audit
opinion and describe the reason for disclaimer.
一个案例多个科目出错是一科目一个科目考虑还是放在一起考虑？？
1) 题目说 individual impact，或者每一个科目单独给分，则需要单独考虑
2) 案例有两个科目，通常单独提供报告
3) Matters 考核了多个科目（3 个及以上），然后问对审计报告的影响，则通常合起来考虑
错报累计之后进行分析
 累加错报时：金额错误需要跟披露错报分开核算
 所有 Dr-Cr=Net amount
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① 2021 Sep/Dec Q3 b)
You are preparing for a discussion with the management of Barnaby Co about misstatements identified
in the financial statements during the audit for the year ended 31 March 20X5. The audit working papers
contain the following schedule of uncorrected misstatements prepared by the audit team. Barnaby Co’s
financial statements, prior to any adjustment for the items below, show profit before tax of $43 million
(20X4:$45 million) and total assets of $105 million (20X4:S120 mllion).
Schedule of uncorrected misstatements
Statement of profit or loss Statement of financial position
$million $million $million $million
(i) Government grant 5 - - 5
(ii) Machinery sale 1 - - 1
Total 6 - - 6
i) Government grant
Barnaby Co received government grant on 31 December 20X4 to invest in new machinery. A condition
of the grant requires the funds to be invested within 12 months of the grant date or it becomes repayable.
The grant has been recognized in full in the statement of profit or loss for the year, however, the
machinery has not yet been purchased. The finance director of Barnaby Co assured the audit team that
the money will be invested by 30 September 20X5.
ii) Machine sale

On 31 March 20X5, Barnaby Co sold a machine which was no longer in use. Under the terms of the sale
agreement, the total sales price of the machine of $10 million would be paid on 31 March 20X6. The
company has recognized the full sales value of $10 million when calculating profit on disposal for the
asset and for the value of the receivable in the current year financial statements, The adult team has
calculated that the net present value of the receivable at the reporting date of 31 March 20X5 is $9 million
and therefore the profit on disposal and the receivable are Overstated at the reporting date by $1 million.
This Is based on the company’s cost of capital of 10% which has been calculated by the client. Sufficient
and appropriate evidence has been obtained in relation to this calculation to conclude that 10% is an
appropriate cost of capital.
Requirement:
b) Recommend and explain the maters which should be discussed with management in relation to each
of the uncorrected misstatements, including an assessment of the individual impact on the
auditor’s opinion if management does not make any changes.
i) Grant
(6 marks)
ii) Machine sale
(4 marks)
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Solution:
Matters
Government grant
Government grants to be recognized in profit or loss on a systematic basis over the periods in which
the entity recognizes as expenses the related costs for which the grants are intended to
compensate. The grant is related to new machine, but it has not yet purchased, so the grant amount
of $5 million should have been recognised as deferred income other than income (需阐述准则要点
+结合案例), (1 分) as a result, profit is overstated, and liabilities are understated (指明对财报具体科
目的影响). (1 分)
As the grant represents 11·6% of profit before tax and 4·8% of total assets, this is material. (使用错报计
算重要性水平时，建议放置在文字分析之后 1 分)
Machine sale
Financial Instruments requires receivables such as that arising on sale of the machine to be recognized
initially at fair value and held on an amortised cost basis. In this case, the receivable is the due in one
year (需阐述准则要点+结合案例), so it should be discounted back to the reporting date. (1 分)
Management recording the transaction as the sale price of $10m, however, the present value of
receivable is $9m, this will result in an overstatement of receivables by 1m (指明错报及对财报具体
科目的影响). (1 分)
The amount of the overstatement is $1 million. It is not material as it represents just under 1% (1/105)
of assets and 2.3% (1/43) of profit, (1 分)
Discussed with management

题目要求讨论对于未更正错报需要管理层讨论的事宜，故需添加以下事项：
All misstatement should be accumulated and are require management to adjust all misstatement
(1 分), if management does not amend the financial statements with respect to the government grant,
the issue should be communicated with those charge with governance, if the issue is still
unresolved, the effect to audit report should be considered. (1 分)
Impact on the auditor’s opinion【题目要求分别考虑事项对审计报告的影响，故无需汇总，分别进行

分析即可】
Since the misstatement of grant is material but not pervasive, then a qualified opinion should be
given. (1 分)
A basis for qualified opinion paragraph would follow the qualified audit opinion which describes
the matter giving rise to the qualification along with a quantification of the financial effects arising (意
见格式). (1 分)
As the misstatement of machine sale is not material, it will have no individual impact (案例要求单独
考虑意见) on the auditor’s opinion, so a unmodified opinion should be given. (1 分)
If management intends to leave this as an uncorrected misstatement, written confirmation of its
immaterial nature should be obtained within a written representation.(意见格式). (1 分)
共计 12 分合计 10 分
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② Pre-Jun 2022 Mock
It is 1 July 20X5. The audit of Boston Co’s financial statements for the year ended 31 December 20X4 is nearly
complete. Boston Co produces chocolate and confectionery. You are performing an engagement quality
review on the audit of Boston Co, as it is a significant client of your firm. The financial statements recognise
revenue of $76 million, profit before tax for the year of $6.4 million and total assets of $104 million.
The summary of uncorrected misstatements included in Boston Co’s audit working papers, including notes, is
shown below. The audit engagement partner is holding a meeting with the management team of Boston Co
next week, at which the uncorrected misstatements will be discussed.
Statement of profit or loss Statement of financial position

$ $ $ $
(i) Impairment 400,000 400,000
(ii) Borrowing costs 75,000 75,000
(iii) Irrecoverable debt 65,000 65,000
(iv) Investment 43,500 43,500
Totals 465,000 118,500 118,500 465,000
Notes
(i). During the year Boston Co impaired one of its factories. The carrying amount of the assets attributable
to the factory as a single, cash-generating unit totalled $3.6 million at the year end. The fair value less
costs of disposal and the value in use were estimated to be $3 million and $3.5 million respectively and
accordingly the asset was written down by $100,000 to reflect the impairment. Audit procedures revealed
that management used growth rates attributable to the company as a whole to estimate value in use.
Using growth rates attributable to the factory specifically, the audit team estimated the value in use to be
$3.1 million.
(ii). Interest charges of $75,000 relating to a loan taken out during the year to finance the construction of a
new manufacturing plant were included in finance charges recognised in profit for the year. The
manufacturing plant is due for completion in November 20X5.
(iii). One of Boston Co’s largest customers, Cleveland Co, is experiencing financial difficulties. At the year end,
Cleveland Co owed Boston Co $100,000, against which Boston Co made a 5% specific allowance. Shortly
after the year end, Cleveland Co paid $30,000 of the outstanding amount due but has since experienced
further problems, leading to their primary lender presenting a formal request that Cleveland Co be
liquidated. If successful, only secured creditors are likely to receive any reimbursement.
(iv). During the year Boston Co purchased 150,000 shares in Nebraska Co for $4.00 per share. Boston Co
classified the investment as a financial asset held at fair value through profit or loss. On 31 December
20X4, the shares of Nebraska Co were trading for $4.29. At the year end, the carrying amount of the
investment in Boston Co’s financial statements was $600,000.
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Requirement:
(i) Explain the matters which should be discussed with management in relation to each of the uncorrected
misstatements, including an assessment of their individual impact on the financial statements; and
(14 marks)
(ii) Assuming that management does not adjust any of the misstatements, discuss the effect on the audit
opinion and auditor’s report.
(6 marks)
Solution：
(i)Matters to discuss with management
(i) Impairment
When performing an impairment test, the lower of recoverable amount and the carrying amount
should be recognized (准则 1 分), and the recoverable amount is the higher of the fair value less
costs to sell and value in use(准则 1 分). Boston estimated that the greater of these two figures was
the value in use at $3.5 million. But using growth rates attributable to the factory specifically, which is
more relevant for the calculation, so the value in use should be $3.1 million (案例 1 分). This means a
further impairment of $400,000 is required to value it appropriately at $3.1 million, (错报 1 分)
otherwise, the PPE would be overstated and impairment loss would be understated. (对财报影响 1
分)
The adjustment represents 6.25% of profit and 0.4% of total assets. While not material to the statement
of financial position, it is material to profit. If management does not adjust for this, this will lead to a
material misstatement of the financial statements. (重要性水平 1 分)
(ii) Borrowing costs

If borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset can be capitalizes as part of the cost of the assets. (准则 1 分)
As the manufacturing plant is not due for completion until November 20X5, it is still a qualifying
asset and the interest should have been capitalised. (案例 1 分) Boston has incorrectly expensed the
interest, this would overstate expense and understate PPE. (对财报影响 1 分)
The charges of $75,000 represent 1.2% of profit and 0.07% of assets so are not material to either profit
or the statement of financial position. (重要性水平 1 分)
(iii) Cleveland
At the year end, Boston would have recognised a net receivable of $95,000(100,000*95%) due from
Cleveland. Although $30,000 has been received after the year end, but it provides further evidence
for the recoverability of the year end, so this is an adjusting event. Boston should adjust (准则+案例
1 分)
Auditor should obtain further correspondence from Cleveland for the possibility of the payment of
receivable. If not, the proposed adjustment should be encouraged. (回款有不确定性审计可以进一
步进行确认-建议分值不够时再写 1 分)
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As Boston has previously provided for $30,000, management should write down trade receivable
for $65,000(95,000-30,000) for the year ended 31 December 20X4,(错报 1 分) otherwise, the profit
would be overstated and trade receivable would be overstated (对财报影响 1 分)
The adjustment represents 1.0% of profit and 0.06% of total assets so is not material individually to either
profit or the statement of financial position. (重要性水平 1 分)
(iv) Investment in Nebraska

The investment in Nebraska has been designated as fair value through profit or loss. As such, the
value at the year end must be adjusted to reflect the fair value of the investment and any gain or
loss recognised in the statement of profit or loss. (准则 1 分)
The fair value of the investment at the year end is $643,500 (150,000 shares*$4.29). This represents an
increase in the fair value of $43,500, which should be taken to the statement of profit or loss as a
gain. (错报 1 分)
$43,500 represents 0.7% of profit and 0.04% of total assets. It is therefore not material individually to
either profit or the statement of financial position. (重要性水平 1 分)
(ii) Effect on the audit opinion and auditor's report

When considering their opinion, the auditor must conclude whether the financial statements as a
whole are free from material misstatement. In order to do this, they must consider whether any
remaining uncorrected misstatements are material, either on an individual basis or in aggregate.
(总体介绍 1 分)
The aggregate effect of the misstatements would be to overstate Boston's profit by $346,500
($465,000 - $118,500). Total assets on the statement of financial position would also be overstated by
this amount. (考虑累计的错报金额 1 分)
This represents 5.4% of profit and 0.3% of total assets. The overstatement would therefore be material
to the statement of profit or loss but not to the statement of financial position. (考虑合计的重要性
水平 1 分)
So if management refuses to make the adjustments to the financial statements, the a modified opinion
should be given, (1 分) since the effect is material but not pervasive, then the auditor will issue a
qualified opinion (with except for) (考虑单独超过重要性水平的科目对审计报告的影响 1 分)
A basis for qualified opinion paragraph would be after the qualified audit opinion and describe
and quantify the effect of the misstatements. (格式 1 分)
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5. Emphasis of Matter paragraphs (EOM) 强调事项段
The paragraph of EOM should only be used when adequate disclosure has been made by the
directors in the financial statements.
EOM is of such importance that it is fundamental to users' understanding of the financial
statements.
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③ 2021 Mar/Jun Q3 b)
Maty Co is a listed transport company which provides train and bus services for the public on a national
basis. The audit of Matty Co for the year ended 31 March 20X5 is nearly complete and you are reviewing
the audit working papers. Maty Co is anew audit client for Beth & Co this year The previous auditors
issued an unmodified opinion on the financial statements for the year ended 31 March 20X4.
Maty Co’s draft financial statements recognize revenue of $60.1 million (20X4-$94.3 million). profit before
tax of $10.5 million (20X4-$22.1 million) and total assets of $28.4 million (20X4-$31.1 million).
Requirement:
a) With reference to Exhibit 2, and assuming that no further adjustments will be made to the financial
statements in relation to the railway operating license or the chairman ‘s statement, evaluate the
appropriateness of the draft auditor’s report produced by the audit supervisor.
(5 marks)
Exhibit 2: Update and draft auditor’ s report

It is now 22 July 20X5 and all maters in relation to the purchased customer list have now been
satisfactorily resolved.
Following the submission of a customer petition to the government complaining about the company’s
poor service levels, on 19 July 20X5 the government released a statement announcing that it had
withdrawn Matty Co’s preferred bidder status and was reopening the tender process for the national
railway license.
The company’s finance director has provided details of a short disclosure note he plans to include in
the financial statements which refers to the uncertainties in relation to the current status of the tender
and possible going concern issues which might arise for the company as a result. The disclosure note
concludes with a statement that the management of Maty Co is very confident that the company will
be successful in the tender process and that it will retain the national railway license for at least a
further five years.
The draft auditor’s report includes an unmodified audit opinion and a key audit matters section which
refers to the disclosure note described above and to related uncertainties in relation to Matty Co’s
going concern status.
Solution:
The finance director has agreed to include a short note to the financial statements to disclose
information relating to the material uncertainty relating to going concern, but the disclosure of going
concern should be reviewed.
If disclosure is not adequate

If the disclosure of going concern is not adequate, then a modified audit opinion would be given.
答案一：
Qualified or adverse opinion is depending on the auditor’s judgement, (1 分) in this case, since
there is short disclosure of going concern and the management is confident that they will be
successful in the tender process, this is material but not pervasive, so qualified opinion may be the
appropriate given (1 分)
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答案二：
Qualified or adverse opinion is depending on the auditor’s judgement, (1 分) in this case, since
management may appear to deny the significance of the uncertainties by stating that they are ‘very
confident’ that they will be successful in the tender process, which would totally mislead report users,
so adverse opinion may be the appropriate given that (1 分)
格式：
The reason for qualified/adverse opinion should be explained in the ‘Basis for qualified or adverse
opinion’ paragraph. (1 分)
If disclosure is adequate
If the disclosure of going concern is considered to be adequate, then unmodified opinion should be
given. (1 分) but the material uncertainty should be disclosed in a separate section entitled ‘Material
uncertainties related to going concern’ not in the key audit matters (KAM) section. (1 分)
格式：
‘Material uncertainties related to going concern’ should appear immediately after the ‘Basis for
opinion’ paragraph and before key audit matters (KAM) section. (1 分)
披露出错到底给 qualified 还是 adverse opinion？
 题目问题是 Discuss the implications for the auditor’s report

根据案例进行主观判断，推荐给一种意见即可。
 题目问的是 Possible implications for the auditor’s report-2018 Dec Q2 c）

需要把所有可能的情况都列举出来
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6. Other information 其他信息
The audit need not audit but must read the other information to be issued with the financial
statements for consistency with the financial statements.
The auditor should include an 'Other Information' section in the audit report and describe the
inconsistency between the Chairman's statement (董事长报告)or summary financial statemen (财
报摘要)and the financial statements
6.1. Implications for the auditor’s report (对审计报告的影响)

如果其他信息没有被修改，因为财报本身没有错报，故不会影响财报的审计意见，但审计师会
添加其他信息段，并陈述重大不一致
 If the other information remains uncorrected, as the inconsistency is in the chairman’s
statement rather than the audited financial statement the audit opinion is not modified.
 Auditor would use the “Other Information” section of the auditor’s report to draw the users’
attention to the misstatements in the chairman’s statement.
 A statement should be used to describes the uncorrected material misstatement of the
other information.
7. Key audit matters (KAM) 关键审计事项
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KAM are those which in the auditor’s professional judgement were of most significance to
the audit. The purpose of KAM is to help users in understanding the entity.【KAM 是在审计
师的专业判断中对审计最为重要的内容。KAM 的目的是帮助用户理解公司】
Matters which the auditor may determine to be KAMs include:

 Areas of higher risk of material misstatement, or ‘significant risks. (eg: 房地产企业收入确
认问题)
 Significant judgements in relation to areas where management made judgements (eg: 投
资性房地产的公允价值，无形资产的减值等)
通常从审计风险中挑最重要的，属于风险高或严重依赖主观判断，但最终未出现重大错报的事
项。
Given that XXX is a listed entity, it would be appropriate for this to be disclosed in the KAM
section of the auditor’s report.【上市公司必须有 KAM】
The KAM should include an introductory paragraph explaining the concept of KAM in order
for users to understand its importance.【KAM 应包括一个介绍性段落，用来解释 KAM 内容，
以便用户了解其重要性。】
7.1. KAM 的内容 (凑分使用)

Each KAM detailed in the auditor's report should refer to the related disclosure in the financial
statements and will explain:
 Why the matter was considered to be significant and therefore a KAM
 How the matter was addressed in the audit
8. Other matter paragraph 其他事项段 (了解即可一般不考虑)

 Issues related to ISA 510 Initial engagements- Opening balances-上年由其他事务所进行
审计的
历年真题
考试类型知识点题号
KAM, EOM and  2019 Mar/Jun Q2 a)√习题册
报告格式
other information  2018 Mar/Jun Q5√习题册
 2021 Sep/Dec Q3 b) √例题
 Pre-Jun 2022 Mock √例题
准则出错
 2019 Sep/Dec Q2 b) √习题册
 2020 Sep/Dec Q3 a) ii)√
审计意见
 2021 Mar/Jun Q3 b)√例题
Going concern
 2018 Dec Q2 c)√习题册
 2020 Sep/Dec Q3 b)√习题册
Other information
 2021 Mar/Jun Q3 a) iii)√习题册
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Part D Other importance issues
Chapter 8 Professional ethics
1. Fundamental principles
 Integrity (Honest and straightforward)
 Objectivity (not allow bias, without conflicts of interest)
 Professional competence and due care
 Professional behavior
 Confidentiality-2021 Mar/Jun Q2 d), 2020 Mar Q2 a) i)
洗钱+违法
The auditor should also determine whether they have a responsibility to report the identified
or suspected non-compliance (fraud) to parties outside the entity, (1 分) as the auditors
should comply principle of confidentiality, they should seek legal advice on the matter. (1
分)
2. Conflicts of interest (利益冲突)-考试时合并在 Ethics 一起做答

This situation arises when different clients are in direct competition with each other or two or
more clients whose interests in respect of the matter are in conflict.
Eg:
帮卖方做尽职调查 (Due diligence service),恰巧买卖双方都是事务所的客户。
审计的客户属于竞对关系。
Safeguards:
The audit firm should make full disclosure to both parties and ask them both to confirm that
they give permission, if consent is provided:
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– having separate engagement teams who are provided with clear policies and procedures on
maintaining confidentiality;
– using confidentiality agreements signed by the relevant personnel
3. Ethical threats
 Self-review threat 自我评价威胁
XXX will be included in financial statements; the audit team will be reluctant to raise queries
during the external audit.
 Self-interest threat 自我利益威胁
The risk that a financial or other interest in a client will inappropriately influence the
professional judgement.
 Familiarity threat 过度亲密威胁
The risk that due to a long or close relationship with a client, the professional accountant
could be too sympathetic or too accepting of their work.
 Advocacy threat 过度推介威胁
XX audit firm would be promoting the interests of their client in relation to XXX, thus
impacting objectivity
 Intimidation threat 客户恐吓威胁
The risk that the professional accountant is deterred form acting objectively because of actual
or perceived pressures.
1.1. Threats from provision of non-audit service
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1) Prepare accounting records-2020 Mar Q3 b), 2017 Sep/Dec Q4 a)
 Self-review threat: figures of accounting records will be included in financial statements;
the audit team will be reluctant to raise queries during the external audit.
 Management responsibility: prepare accounting records may indicate management
responsibility as choices of accounting methods may be made
Safeguards：
Listed or public interest Not listed or public interest
 Must not  Management responsibility
The auditor should not assume management
responsibility
 Self-review threat
Only allowed to provide services of a routine or
mechanical nature and use separate team of
non-audit staff to perform the service.
 Since *** is not be routine and mechanical, the

audit firm should not accept【考卷上写这句话即
可】
2) Internal audit service (Design and evaluate internal control) -2019 Sep/Dec Q1 d)
 Self-review threat: the audit team may use the internal audit work performed in their
audit of revenue, they may over-rely on the internal controls designed and evaluated by
the audit firm.
 Management responsibility: design and evaluate internal control may indicate
management responsibility as choices should be made.
3) Taxation service 税务服务【根据案例信息拆开说】

 Tax return preparation (纳税申报)- 2018 Dec Q3 b)
 Permited as long as management takes responsibility for the returns.
 Tax calculation- 2018 Dec Q3 b)

 Self-review threat: tax calculation forms the basis of the tax payable and the tax
charge in the financial statements and the audit team may be more likely to reluctant
to raise queries during the external audit.
 Advocacy threat(潜在): the auditor being seen to promote the interests of Clean Co
with tax authorities and therefore that the auditor cannot be fully objective.
 Tax planning& Tax advice /Assistance in the resolution of tax disputes-2018 Mar/Jun
Q2 a)
 Self-review threat: Tax figures from tax planning may form part of the financial
statements, the audit team will be reluctant to raise queries during the external audit.
 Management responsibility: tax planning may indicate management responsibility as
choices should be made.
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 Advocacy threat: there is a risk of the auditor being seen to promote the interests of
XX Co, so the auditor cannot be fully objective.
4) Valuation services
 Self-review threat: valuation services may form part of the financial statements; the audit
team will be reluctant to raise queries during the external audit.
 Management responsibility: valuation services may indicate management responsibility
as choices of market price may be made
 Advocacy threat(潜在): the audit would be promoting the interests of their client in
relation to the sales price or PPE, thus impacting objectivity.
5) Other non-audit service

 Develop the integrated report (Choice of KPIs)/Interim review-2021 Mar/Jun Q1 d), 2018
Sep Q1 d)
 Website and online sales system -2018 Dec Q3 b)
 Due diligence service(本质: valuation service)-2021 Sep/Dec Q1 d)
可能导致的影响：
 Management responsibility
 Advocacy (潜在)
 Self-interest (潜在)
 Familiarity threat (潜在)
2-5) Safeguard:
Listed or public interest Not listed or public interest
 Must not  Management responsibility
The auditor should not assume management responsibility
 If the service has a material effect on F/S, the audit firm
can’t provide.
 If not has a material effect on F/S, the audit firm should
use separate team of non-audit staff to perform the
service.
 Although XX is not listed, the materiality of the service

should be considered. If it is accepted, the audit firm can
use a separate team of non-audit staff to perform the
service.【考卷上写这句话即可】
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例题 2021 Sep/Dec Q1 d)
It is 1 July 20X5.You are a manager in the audit department of McCane & Co. a firm of Chartered
Certified Accountants. You are assigned to the audit of Gruber Co, which has a financial year ending 30
September 20X5.
The company was established 15 years ago by Martin Gruber, an engineer who had patented a new
type of machine used in the oil industry. Martin, who is the company's chief executive officer owns 60%
of the shares in the company with the remainder split equally between his brother and sister, Craig and
Iris Gruber.
Exhibit 5
A meeting took place yesterday in which the audit engagement partner discussed the potential sale of
Martin Gruber's shares with the company directors.
The company directors revealed that Willis Co is the company with whom negotiations have started in
relation to the sale of Martin Gruber’s shares. Willis Co is an existing audit client of McClane & Co.
The directors have requested that McClane &Co assist them with the sale by performing a vendor’s due
diligence service, in which they would conduct an independent review of Gruber Co’s financial position
and future prospects and produce a report on their findings to be provided to Willis Co.
Using the information in Exhibit 5:

(d) Discuss the ethical issues (conflict of interest +ethics threats) raised and recommend actions
(safeguards) to be taken by our firm.
Solution：
Potential sale of shares
A conflict of interest arises when an audit firm provides a service in relation to two or more clients
whose interests in respect of the matter are in conflict. (1 分)
In this case, the request for McClane & Co to perform a vendor due diligence service creates a conflict
of interest, since Willis Co will want to purchase the shares for the lowest possible amount and Martin
Gruber will want to sell them for the highest possible amount. (1 分)
The audit firm should make full disclosure to both parties and ask them both to confirm that they
give permission in writing for the service to be provided, (1 分)and if the consent is provided, the
following safeguard should be given:
– having separate engagement teams who are provided with clear policies and procedures on
maintaining confidentiality; (1 分)
– using confidentiality agreements signed by the relevant personnel(1 分)
Due diligence service

The due diligence service is included the review of Gruber Co’s financial position and future prospects,
it may indicate management responsibility as choices should be made (1 分), unless the management
of Gruber Co is taking responsibility of the choices, management responsibility is prohibited (The
auditor should not assume management responsibility). (1 分)
The review of Gruber Co’s financial position may form part of the financial statements, the audit
team will be reluctant to raise queries during the external audit, this will cause self-review threat (1
分).
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Due diligence service would include a valuation service, this can give rise to an advocacy threat (1
分), which means that McClane & Co would be promoting the interests of their client in relation to
the sales price, thus impacting objectivity
Although Gruber Co is not listed, the materiality of the service should be considered. If it is accepted,
the McCane & Co can use a separate team of non-audit staff to perform the service. (1 分)
1.2. Threats from fianncial matters
1) Financial interests (eg: share of client)

 Self-interest threat: the audit firm receive a financial that will inappropriately influence
the professional judgement
Safeguards：
 Disposing of the interest
2) High percentage of fees -2020 Mar Q3 b)

 Self-interest threat: the audit firm will have a financial interest in the client due to its
dependency on the client.
 Intimidation threat: the audit firm may concern about the impact on its business if it
were to lose the client.
For listed company, if the total fees from a single client exceed 15% of its total fee income
for two consecutive years (连续两年).
Safeguard:
 Prior to issuing the auditor’s report on the second year’s financial statements, the
equivalent of an engagement quality review should be performed【第二年出审计
报告前，需要进行类似于项目质量复核的检查工作】
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For not listed company, if the total fees from a single client exceed 30% of its total fee
income for five consecutive years (连续五年)
Safeguard:
 The firm should evaluate whether there are any threats to independence by either
pre-or post-issuance reviews of the fifth year’s audit work.【第五年进行审计报告
前或审计报告后的检查工作】
3) Contingent fees 或有收费-2021 Mar/Jun Q1 d)

Eg: audit fee will be increased by 20%, assuming that the assurance provided on the KPIs is
favourable.
 Self-interest threats: it is in the financial interest if the audit firm to give a favorable
opinion in order to secure the income.
Safeguard:
 No safeguard, it should charge a non-contingent basis and separate from the audit
fee.
4) Overdue fees 逾期
When a significant part of audit fees is not paid before the audit report issue.
 Self-interest threat: The firm may issue a favorable option rather than possibly loss the
amounts owed.
Safeguard:
 Discuss with audit committee or TCWG (those charge with governance)
 Apply pre-issuance review
5) Referral fee (介绍费-从被介绍的企业收一定比例的提成)-2019 Sep/Dec-Q1 d)

Eg: If Ranger Associates(被介绍企业) is appointed, Squire & Co will charge Ranger
Associates a referral fee equivalent to 10% of the fee for the corporate finance engagement.
 Self-interest threat: the referral may result in the audit firm recommending another
firm for the work without proper competence to perform the engagement.
Safeguard:
 Disclosed to the client and consent should be obtained.
6) Lowballing/Low fees -2018 Mar/Jun Q2 a)

 Self-interest threat：the audit firm has a financial interest in maintaining a good
relationship with ** Co, which may impact the quality of audit.
 Intimidation threat(潜在): threatened to move to another audit provider if audit firm
does not accept to work for a low fee【如果客户要求事务所降价的话】
Safeguard：
 The Codes of ethics don’t not forbid low fee, but the impact of the quality of work
should be considered.
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7) Loans and guarantees-2018 Sep Q2 b)
 Bank or other similar institution-not at normal commercial terms【银行性质的，非正
常商业条款-不可以】
Self-interest threat: the audit may have potential personal financial benefit from the
client
 Not a bank or similar institution【非银行性质的，无论是否是正常商业条款都不可

以】
Self-interest threat: the audit may have potential personal financial benefit from the
client
Safeguard:
 No safeguard
8) Gifts and hospitality-2018 Dec Q3 b)

 Self-interest threat: the office party/gift would cause a direct financial benefit from the
client
 Familiarity threat: As the audit team were invited to the ** 活动 (eg: annual office
party/ given gifts), the audit staff may be getting too close to the client staff, resulting in
the team becoming less objective and less able to challenge explanations provided by
the client.
Safeguard:
 Unless the value of the gift/hospitality is trivial, the audit team should not accept.
 The audit firm should consider introducing internal authorisation procedures in order
to ensure whether the value is trivial.【根据案例情况，无法判断其大小时】
1.3. Threats from employment and other relationship
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1) Close business relationship/Family and personal relationships
Self-interest, familiarity & intimation
Safeguards：
 Disposing of the interest
 Removing the individual from the team
2) Partner on client board/subcommittee-2019 Sep/Dec Q1 d)

 Self-interest threat: because the audit firm’s interests become closely aligned to the
interests of the Group.
 Self-review threat: Audit committee member is in a position to exert influence over the
financial statements, and the audit team would be less likely to challenge issues (not
sufficiently objective/ will be reluctant to raise queries) during the audit.
 Management responsibility: the audit firm is making decisions and using judgement
which is properly the responsibility of management.
 Familiarity threat: working with audit committee could create a familiarity threat to
objectivity, this may cause auditors unable to approach the work with an appropriate
degree of professional skepticism.
Safeguard:
 Partner of the audit firm shall not serve as director of an audit client.
3) Having an audit client for a long period of time -2020 Sep/Dec Q2 a), 2020 Mar Q3 b),
 Familiarity threat: the same audit partner on an audit assignment over a long period
of time may cause the auditor to become too familiar and too trusting with the client
resulting in less professional skepticism
Safeguard:
 For listed company: if an individual is an engagement partner/key audit partner for
seven years, they must be rotated off the audit for five/two years.
Rotate after Cooling off(冷却期)
Engagement partner 7 years 5 years
Key audit partner 7 years 2 years
4) Temporary staff assignments-2018 Sep Q2 a)

 Self-review threat: the temporary assignment may be included in the financial statements
and the audit team may be more likely to reluctant to raise queries during the external
audit
 Management responsibility: auditors may be involved in making judgments and
decisions which are the remit of management.
Safeguard:
 Staff must not assume management responsibilities
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1.4. Threats to advocacy
1) Share prospectus/Corporate finance-2020 Mar Q3 b)
 The advocacy threat: Promote and represent their client’s position may compromise the
auditor’s objectivity.
 Management responsibility: Representing an audit client may indicate management
responsibility as choices should be made.
 Self-review threat(潜在): the result of finance may form part of the financial statements;
the audit team will be reluctant to raise queries during the external audit.
Safeguard:
 融资上市-No safeguard (Forbit to provide.)
 Work on prospective financial information and attend meeting with bank
Should not assume a management responsibility.
2) Representing an audit client in a legal case or tax enquiry-2017 Sep/Dec Q3 b)

 The advocacy threat: Representing an audit client to attend meeting with
bank/government may compromise the auditor’s objectivity.
 Management responsibility: Representing an audit client may indicate management
responsibility as choices should be made.
Safeguard:
 Should not assume a management responsibility.
1.5. Threats from threaten

Intimation threat: force audit to compromise auditor’s objectivity.
1) Limitation on scope of the audit-2021 Mar/Jun Q1 d)
2) Removal of assurance firm- 2020 Mar/Jun Q3 b), 2018 Mar/Jun Q2 a) i)
3) Pressure to finish the service quickly-2017 Sep/Dec Q3 b)
Safeguard:
 Disclosing to the audit committee (Those charge with government) the nature and extent of
the threat
 Resign if threat too great.
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Ethics 题目解读：
 Ethics 题目默认包含 conflict of interest
 无论案例是否要求写 action 都可以写 safeguard，
 Other professional implications 通常指案例出道德以外的内容，比如管理层的道德，审计师的能
力，违法，洗钱等
Ethics 写作要点：
 抄题+指明违反哪个 threat 并解释原因
 一个事件，如果影响多个 threat，要把每个 threat 都写上
 指明 safeguard 会得到更多分值【可以每个 threat 写 safeguard，如果某个 threat 不知道
safeguard，也可以将多个 threat 合并写 safeguard】
Eg：
Partner to serve on audit committee (写标题会方便考官判分也会增加逻辑分)
抄题 The Group audit committee has requested that a senior partner from Squire & Co could
assume a role on the Group audit committee,
This could arise a self-review threat（指明 threat）because an audit committee member is in a
position to exert influence over the financial statements, and the audit team would be less likely to
challenge issues during the audit.（解释原因）1 分
A self-interest threat（指明 threat）also arises because the audit firm’s interests become closely
aligned to the interests of the Group（解释原因）1 分
and there is no safeguards for these issues（safeguard）. 1 分
In addition, working with audit committee could create a familiarity threat （指明 threat）to
objectivity, this may cause auditors unable to approach the work with an appropriate degree of
professional skepticism（解释原因）1 分
历年真题
知识点题号
Ethics  2021 Sep/Dec Q1 d) √
 2021 Mar/Jun Q1 d) √
 2020 Mar Q3 b) √
 2019 Sep/Dec Q1 d) √
 2018 Dec Q3 b)√
 2018 Sep Q1 d)√
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历年真题
① 2021 Mar/Jun Q1 d)
Pale Co is not a currently a listed entity.
d) Using Exhibit 5, explain the ethical issues (further action) and other audit planning
implications/other professional implications which arise in relation to the phone call from the
company’s chief finance officer, Mark York.
(10 marks)
Exhibit 5
Notes from a phone call yesterday between Harvey Rebus, audit engagement partner and Mark York.
Request from Mark York
Pale Co publishes a wide range of non-financial social and environmental Key Performance Indicators
(KPIs) as part of the Annual Report, including the three shown as part of Exhibit 4. Mark has asked if our
firm can provide assurance on these KPIs as part of performing the annual audit. Mark has suggested
that in order to pay for this extra work, the agreed audit fee will be increased by 20%, assuming that the
assurance provided on the KPIs is favourable.
News report
Mark informed us that a news report has emerged in Farland, alleging that Pale Co paid a government
official a sum of $15,000 in order to secure the purchase of tropical rainforest which is taking place next
month. Mark wanted to make us aware of the story, which is spreading quickly on social media, and to
inform us that these incentive payments are routine business practice in Farland. He also strongly urged
us not to investigate the payment as part of our audit procedures, saying that the amount is
insignificant. He suggested that making enquiries regarding the payment might mean more media
attention is focused on the issue, which he is keen to avoid given the company’s plans to obtain a stock
market listing within the next two years.
Exhibit 4
Projected Actual %
30 September 30 September change
20X5 20X4
Financial key performance indicators(KPI): $million $million
Revenue 42.5 40.3 +5.5%
Social and environmental KPI:
% timber harvested in line with Gold Standard" 82% 85%
Number of employees 1,300 1,420
Total staff days lost due to accidents at work 78 65
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Solution:
Ethical issues (该标题考试可不写)
Assurance on key performance indicators (KPIs)
Although the KPIs will not form part of the audited financial statements, they are part of the ‘other
information’ and auditor has responsibilities to read ‘other information’. (1 分) Therefore there is a
potential self-review threat to objectivity as the team performing the assurance work would be
reluctant to raise queries during the external audit when reading the other information (1 分).
Additionally, working with management on the integrated report could create a familiarity threat to
objectivity, this may cause auditors unable to approach the work with an appropriate degree of
professional skepticism. (1 分)
Although Pale Co is not listed, the materiality of the service should be considered. If it is accepted,
the audit firm can use a separate team of non-audit staff to perform the service.
Besides, assuming that the assurance provided on the KPIs is favorable, the agreed audit fee will be
increased by 20%, this is a contingent fee. Contingent fees can give rise to a self-interest threat, as it
is in the financial interest of the audit firm to give a favorable assurance opinion in order to secure
the income. (1 分) The Code prohibits the use of contingent fees for audit services, so if the Chief &
Co take on the engagement, it should charge a non-contingent basis and separate from the audit fee.
(1 分)
Incentive payment
Mark York has urged the audit team not to investigate the incentive payment, attempting to restrict
the audit team’s ability to obtain audit evidence in relation to the payment, there appears to be an
intimidation threat. (1 分) Moritz & Co should discuss its ethical threat to those charged with
governance. (1 分)
Other audit planning implications (该标题考试可不写)

Competence and resources
Since providing assurance on non-financial KPIs is quite a specialist area, Chief & Co must also consider
whether they have the competence and resources to perform the work. (1 分)
Integrity of management
Mark York has suggested that incentive payments are ‘routine’, but the incentive payment could be a
bribe and an illegal payment. (1 分) If so, this indicates a lack of integrity of management, as clearly
Mark York is aware of the payment and seems to be justifying it. (1 分)
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Chapter 9 Group audits
Group audit: The audit of group financial statement 集团项目组

Component audit (Other auditor) 组成部分审计
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1. Responsibility
The group auditor has sole responsibility for the opinion on the group financial statements and
this responsibility is not diminished by reliance on the work of any component auditors. 集团审计组
对整个集团财报审计工作及审计意见负全部责任，这一责任不因利用组成部分注会的工作而减
轻。
2. Significant component 重要组成部分【审计风险及质量监控题目也需要考虑】

Significant component as a component which is financial significance or has specific nature or
circumstances to cause significant risks of material misstatement of the group financial statements.
The benchmarks can be determined by profit or assets and 15% could be an appropriate cut-off
point for determining significance.
审计对应策略【了解】
 If a component is financially significant to the group financial statement, a full audit based
on the component materiality level should be performed.
 If a significant component due to its specific nature or circumstances, the group auditor shall
perform one or more of the following:
- An full audit【全面审计】, an audit of one or more account balances【特定科目进行审
计】, or specified audit procedures 【特定的审计程序】
总结：只要是重要的组成部分，就必须审计。
 For not a significant component, group will be subject to analytical procedures at a group
level.【非重要组成部分，可以不进行审计，只进行分析程序即可】
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例题 2018 Mar/Jun Q1 b) i)
Associates.
Background information and results of analytical procedures
The Group operates globally, with sales being made in over 100 countries. The Group has 20
subsidiaries which have been acquired over the last 30 years. All Group companies are located in the
same country, with the exception of Borzoi Co, a foreign subsidiary whose operations focus on the
translation of published content into a variety of different languages. The Group’s publishing activities
can be categorised into three operating segments, each of which are cash generating units for the
purpose of impairment reviews: newspapers and magazines, academic journals, and books. The
revenue and total assets for 2018 (projected) and 2017 (actual) for the Group in total and for each
segment is as follows:
Borzoi Co
Borzoi Co is located in Farland, a country which has recently experienced political unrest, leading to
significant volatility in the local currency, the Oska. At today’s date, the management accounts of Borzoi
Co recognize total assets of 68 million Oska, and the exchange rate is 4 Oska:1$. In the last six months,
the exchange rate has fluctuated between 10 Oska:1$ to 3 Oska:1$.
(b)To assist the audit assistants’ understanding of our audit strategy in respect of Borzoi Co:
(i) Explain the term ‘significant component’ and assess whether Borzoi Co is a significant component of
the Group.
(4 marks)
Solution:
i)
If a component is individually financial significance to the group, due to its specific nature or
circumstances, is likely to include significant risks of material misstatement of the group financial
statements, then it is a significant component. (2 分)
The benchmarks can be determined by profit or assets and 15% could be an appropriate cut-off point
for determining significance. (1 分)
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The total assets of Borzoi Co are 68 million Oska and if retranslated using the current exchange rate of
4 Oska:1$, its assets are $17 million. This represents 17.9% of Group assets and therefore based on the
information at today’s date.(经济指标超过 15%)(1 分)
What’s more, the Oska currency has significant volatility, which could bring specific risks of material
misstatement of the group financial statements. (有外汇的大幅波动) (1 分)
As Borzoi Co has both financial significance and specific nature or circumstances, it will be considered
to be a significant component of the Group. (1 分)
3. How to involve with component auditor【审计风险及质量监控题目也需要考虑】
3.1. Understanding the component auditor 了解组成部分审计

Group engagement team to obtain an understanding of the component auditor in following
aspects:
 Whether the component auditor is independent and will comply with the ethical requirements
that are relevant to the group audit 独立性及职业道德要求
 The component auditor’s professional competence 专业胜任能力
 Whether the component auditor operates in a regulatory environment that actively oversees
auditors 组成部分注会是否处于积极的监管环境
3.2. Assessing the component auditor 评估组成部分审计

For all companies in the group, the group auditor should discuss with (communicate) and
review the work done by the component auditors-2021 Mar/Jun Q2 a)【集团审计需要与组成部
分进行沟通，并检查组成部分的工作】
Even subsidiary has been audited by the same audit firm as group audit, however, the
communication between the group and component audit should be documented too.【即使
组成部分跟集团审计是一个事务所，相关的沟通也需要进行纸质记录】
For a significant component, the group engagement team is required to be involved in the
component auditor’s risk assessment to identify significant risks of material misstatement of the
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group financial statements.【对于重要组成部分，集团审计要需要参与组成部分的风险评估工
作】
It is 1 July 20X5. You are an audit manager in James & Co, a firm of Chartered Certified Accountants.
Your role includes performing post-issuance audit quality reviews, and you are currently reviewing the
audit of the Bond Group (the Group), which had a financial year ended 31 January 20X5, All four of
these subsidiaries are significant components of the Group and have a financial year end of 31
January20X5.
Exhibit 1: Cameron Co
Your firm audits all Group companies with the exception of Cameron Co, a subsidiary which was
acquired during the last financial year.
Cameron Co was acquired by the Group in April 20X4 and is audited by Carrey Associates. a small local
firm. In respect of Carrey Associates, the Group audit working papers contain the following statement:
"our firm can rely on the work of Carrey Associates, as one of James & Co's audit partners left the firm
to become an audit partner at Carrey Associates, and he was involved with the audit of Cameron Co.
Other than some background about Carrey Associates which had been printed off from the firm’s
website to provide background information, there is nothing else on file in relation to the firm.
Requirement:
Comment on the quality of the planning and performance of the Group audit and the audit of the
components of the Group, discussing the quality control and other professional issues raised in
respect of Cameron Co.
Solution:
Group auditor evaluation of Carrey Associates
Group audit should obtain an understanding of the component auditor, the fact that an audit
partner has left James & Co to work as an audit partner at Carrey Associate has no effect for the
understanding, (1 分) however, in the case, the group auditor should obtain the competence and
independence of component auditors. (1 分)【此处也可以提及还需要复核组成部分的审计工作】
In addition, a familiarity threat may arise as the partner joined Carrey Associates was working with the
group audit, due to this close working connection, group audit team may have over-relied on the
work of the component auditor. (1 分)
4. Joint audit 联合审计

In a joint audit, two or more audit firms are responsible for conducting the audit and for
issuing the audit opinion.【联合审计，就是两个事务所一起审计】
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Advantages
 Some companies may have different regulations to the rest of the Group, so the local
auditors, to retain some input to the audit as they will have detailed knowledge of such
regulations.【某些公司可能使用不同的规章制度，当地事务所可能会更了解】
 Some companies may have a distant location, so it may be difficult for Group audit to
provide staff to perform audit. It will be more cost effective for this to be carried out by local
auditors.【某些公司比较遥远，使用当地事务所成本可能更低】(1 分)
Two audit firms can also stand together against aggressive accounting treatments. In this way,
a joint audit can enhance the quality of the audit.【两个事务所可以一起攻克复杂准则，从而提
高审计质量】
Disadvantages
 For the audit firms, there may be problems in deciding on responsibilities, allocating work,
so the efficiency may be affected.【很难协调及安排工作，从而导致效率低下】
 The quality between different audit firms may be different, so having two firms to audit
may reduce the quality of the audit. 【不同事务所质量不同，从而可能导致审计的质量下
降】
Considerations before an engagement 承接前需要考虑的因素

 Competence and objectivity of component auditors
 Ability to communicate with management and component auditors（比如时差）
 Language barriers, cost of travel
5. Materiality
Group materiality【集团重要性水平】
Component materiality【组成部分重要性水平】
The component (subsidiary) should be audited by component materiality which should be
lower than materiality for the Group financial statement as a whole. 【组成部分审计需要使用组
成部分重要性水平，组成部分重要性水平<集团重要性水平】
Although the XX is lower the Group material level, it is may be material for component materiality.
【某个组成部分的错报虽然小于集团重要性水平，但有可能对于组成部分是重要的】
例题 2021 Mar/Jun Q2 c) 节选
It is 1 July 20X5. You are an audit manager in James & Co, a firm of Chartered Certified Accountants.
Your role includes performing post-issuance audit quality reviews, and you are currently reviewing the
audit of the Bond Group (the Group), which had a financial year ended 31 January 20X5, All four of
these subsidiaries are significant components of the Group and have a financial year end of 31
January20X5.
Exhibit 3: Dean Co
Dean Co owns a small number of shares in Corden Co, amounting to a 2% shareholding. The
investment is accounted for as a financial asset at fair value through profit or loss, as required by IFRS®
9 Financial Instruments.
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The audit team checked the arithmetic of management’s computation but did not obtain further audit
evidence, because according to the audit conclusion "the value of the shareholding is below the Group
materiality level’. Materiality for the Group consolidated financial statements was determined to be
$350,000.
Requirement:
Comment on the quality of the planning and performance of the Group audit and the audit of the
components of the Group, discussing the quality control and other professional issues raised in
respect of Dean Co.
Solution：
Materiality
Using Group materiality in the audit of a subsidiary is not appropriate, (1 分 )and component
materiality should be lower than materiality for the Group financial statements as a whole, so although
the value of shareholding is lower the Group material level, it is may be material for component
materiality. (1 分)
6. What if the group auditor can’t able to access all information 审计范围受限
If the component is significant, then it is possible that there will be an inability to obtain sufficient
appropriate audit evidence about the component, in which case the audit opinion is either
qualified or a disclaimer of opinion is issued. 【重要组成部分肯定会导致集团审计出现保留或无法
表达】
If the component is not significant, then it may be sufficient (Unmodified opinion) just to have a
complete set of financial statements, the component auditor’s report and information kept by
group management. 【如果非重要组成部分，且有子公司全套财报，有可能不会对集团审计报告有
影响】
7. What if a subsidiary’s report has been modified 子公司非无保留意见

In a group situation, materiality and risk must be assessed in the context of the group as a whole.
The group auditor must consider the materiality of any modifications to a component’s audit report
in relation to the whole of the consolidated accounts.
This can lead to situations where a component may have a material qualification that has no
impact on the group opinion which would remain unmodified.
Similarly, a pervasive qualification in a component’s audit report【子公司 Adverse/Disclaimer
opinion】may only have a material but not pervasive impact on the group opinion【集团
Qualified opinion】.
Ultimately the decision as to the impact of a modification to a component's audit report on the
consolidated opinion is a matter of judgement for the group auditor.
因为集团跟组成部分（子公司）的重要性水平不一样，所以导致组成部分保留意见的事项可能对于
集团财报没有影响，对于组成部分是广泛影响的事项在集团层面可能仅仅是重要但不广泛影响，所
以集团项目组需要具体问题具体分析，利用主观判断以确认其组成部分报告对整个集团报告的影
响。
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历年真题
知识点题号
Significant component 2018 Mar/Jun Q1 b) i)√
Understanding the component auditor 2018 Mar/Jun Q1 b) ii)√
Advantages and disadvantages of joint audit 2020 Mar Q1 c) √
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Chapter 10 Quality control
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1. Matters before acceptance【整体的工作量跟人员安排-通常不涉及具体的准则】
 Ethics 道德问题【结合案例展开】
 Conflict of interest【万金油】
 Management integrity 管理层诚信度【eg：违法结合具体事例阐述】
 Competence and resources 能力、资源
 跨国、上市等问题导致的人员能力问题
 专业行业导致的人员问题
 集团审计（Group audit）：
 对组成部分[子公司]审计师的了解（子公司审计师的能力）与复核 Review
 沟通的成本/时间问题
 准则的不一致导致集团审计人员能力的问题
 首年审计（New client）
 检查风险+期初余额
 与前任审计沟通
1.1. Matters to consider before acceptance as audit of Group【集团审计】-2020 Sep/Dec Q2 b)

 Competence of group audit team
-Group has specialized operations and operates in many countries
-Local financial reporting standards
 Competence of component auditors
 Ability to communicate with management and component auditors
 Resource availability
-Group is a large, multinational client
 Ethical requirements/Ethical threats (结合案例展开描述)
 Integrity of the client (non-compliance issues)
 Language barriers, cost of travel
 Specific risk of group or subsidiary (结合案例寻找具体的会计问题)
1.2. Planning of an initial audit engagements【首年审计需关注的事项】-2021 Sep/Dec Q1 a)

New audits generally require a little more work than recurring engagement, because there are
specific risks in relation to an auditor’s relative lack of knowledge of the new clients.
 After the consent with client, arrangements should be made with the predecessor auditor.
【与前任审计进行沟通】
 The review of the previous year’s working papers of predecessor auditor would help to
plan the audit, for example, as it may highlight matters pertinent to the audit of opening
balances or material misstatement.【查看前任审计底稿，查看期初值】
 It will also be important to consider whether any previous years’ auditor’s reports were
modified, and if so, the reason for the modification.【查看上期是否有非无保留意见】
 May have quality control procedures in place for use in the case of initial engagements,
for example, the involvement of another partner or senior individual to review the overall
audit strategy prior to commencing significant audit procedures.【额外增加复核】
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1.2.1. Auditor’s responsibility for corresponding figures【审计师对于对数据的责任】
所谓对应数据，即期初金额（资产负债表）或上期金额（损益表），用来参照对比本年数据使
用。
 Opening balances do not contain misstatements that materially affect the current period’s
financial statements; 【确保上期数据没有重大错报】
 Prior period’s closing balances have been properly brought forward as the current
period’s opening balances;【确保上期数据正确的转入本年】
 Accounting policies have been consistently applied or changes accounted for
retrospectively and adequately disclosed 【确认会计政策延续使用，如果变更，会进行追
溯调整或恰当披露】
Auditors must be satisfied with the opening position, in particular, to form an opinion on the
current year’s profit (or loss).
2. Quality control review

 该类题目比较综合，即使题目不提及 ethics issues 或 other professional issues，只说 quality
control issues，如果案例道德或者准则内容也需要展开做答
 有的题目分为 Evaluate quality control issues and action, 但即使题目中没有专门问 action，回
答相关的行动也可以得分
✓ Quality control 整体
 Sufficient time
 Partner reviews the audit work【Direction，supervision, review】
 Junior 不能参与 subjective/complex 工作
 Sample 要使用 statical sample，而不是 own judgement
✓ Ethics【根据案例展开论述】
Threats+ Safeguard
✓ Other professional issues【案例中涉及到具体准则】

对于案例中涉及到的科目，需考虑准则的难点以及已收集的审计证据是否充分适当【关注点
与 matters &procedures 或 comments on evidence 思路一致】
2.1. Overall quality control

 Engagement Quality Control Review-2020 Sep/Dec Q2 a)
As this is a listed audit client, an Engagement Quality Control Review should have been
performed pre-issuance audit quality review (not post-issuance audit quality review)【上市
公司必须在审计报告之前有项目质量控制复核】
非上市公司，可以 pre/post audit quality review, 但建议 pre-issuance audit quality review.
 Partner 要有时间充分去执行相关职责
There should be sufficient time for the audit partner to perform their duties adequately.
 合伙人不能将复核职责摊派给其他人-2020 Sep/Dec Q2 a), Pre-Jun 22 Mock Q3 a), 2018 Sep

Q3 b)
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The audit partner is required to take overall responsibility for the direction, supervision and
review of the audit.
 所有团队成员要时间充分
All audits should be planned to ensure that adequate time can be spend to obtain sufficient
and appropriate evidence. 【不能因为时间不够而减少程序】
 Junior 或新入职人员，不可以执行复杂程序 (eg: Share-based payment, going concern)

XX can be a difficult area to audit, it seems unwise to delegate such an important area of the
audit to an audit junior.【任何与判断相关的都不可以给 junior 做】
 对于重点科目，即使低风险也需要执行程序。
Even if the balances are considered to be low risk, they could still contain misstatements, it is
not acceptable to cut audit procedures.
 执行人/复核人没有发现问题或出现错误，还需考虑执行人、复核人的能力
Lack of competence
 管理层不让调查、违法，考虑管理层的诚信
Management integrity
It is apparent from your review that almost all of the detailed review of the audit working
papers was completed by Anesa Kineton, who has evidenced her review by stating ‘final
review’ on each page of the audit file. She has recently been promoted to audit manager.
Solution:
Bob Newbold has booked only two hours for audit work performed on Rivers Co. This is not
sufficient time for the audit partner to perform their duties adequately. (1 分) The audit
partner is required to take overall responsibility for the direction, supervision and review of
the audit, however, the final review was performed by a newly promoted audit manager
who would not have the necessary experience. (1 分)
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例题 Pre-Jun 22 Mock Q3 a)
You have discussed the Group audit with some of the junior members of the audit team, one
of whom made the following comments about how it was planned and carried out:
“The audit has been quite time-pressured. The audit manager told the juniors not to perform
some of the planned audit procedures on items such as directors’ emoluments and share
capital / as they are considered to be low risk.”
“Two of the juniors were given the tasks of auditing trade payables and going concern . The
audit manager asked us to review each other’s work as it would be good training for us and he
didn’t have time to review everything.
Solution:
Time pressure
The junior’s first comment is that the audit was time pressured. All audits should be planned
to ensure that adequate time can be spend to obtain sufficient and appropriate evidence. (1
分) otherwise, the detection risk would be increased and lead to an inappropriate opinion.
Procedures not performed

Even if the balances are considered to be low risk, they could still contain misstatements, it is
not acceptable to cut audit procedures, (1 分) besides, directors’ emouments are related
party transactions and are material by their nature and so should not be ignored. (1 分)
Audit of going concern

Going concern can be a difficult area to audit, it seems unwise to delegate such an important
area of the audit to an audit junior. The audit of going concern involves many subjective
areas, such as evaluating key assumptions of cash flow forecasts, so it should be performed
by a more senior and experienced member of the audit team. (1 分)
Review of work
The juniors have been asked to review each other’ s work which is unacceptable, since the
juniors are not senior enough and unlikely to find mistakes, the audit partner is required to take
overall responsibility for the direction, supervision and review of the audit. (1 分)
2.2. 关于审计计划
 The auditor shall update and change the overall audit strategy and the audit plan as
necessary during the course of the audit.【整个审计期间，审计计划要不断更新调整】
 The auditor to determine materiality for the financial statements as a whole at the planning
stage of the audit, and to revise it where new facts and information become available which
impact on materiality.【审计计划时就要决定重要性水平，并根据审计情况不断调整】
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重要性水平需要考虑公司整体风险，eg：新客户，准备上市，有特大审计风险等因素，没有
特殊情况，通常重要性水平不能比上一年高，否则将升高 ROMM。
 Any significant changes to the audit strategy or audit plan, including reasons for the
changes, should be fully documented, audit strategy or audit plan should not be deleted.
【审计计划变更必须记录，不能随意删除】
3.1. 关于抽样方式
 Sample based their own judgement would be more quick than statistical sampling method,
but there is a risk that the sample selected may no longer be representative of the
population as a whole or that an insufficient volume of items may be selected for testing.
【应使用统计抽样而不是使用主观判断进行抽样】
3.2. 关于错报的态度
 样本错报需要扩大到总体以确认财报可能的错报
The error（常规性业务的错报，比如收入，存货，成本） should be extrapolated based on
the errors identified during audit to assess the potential for a material misstatement.
 所有的错报的需要累计，与管理层进行沟通并要求更正
All misstatements should be accumulated and communicated with management to
request them to adjusted.
 所有错报都需要一查到底
The amount of XX is immaterial to the financial statements, a misstatement could be material
in conjunction with other misstatements, so further investigation is need to be performed.
3.3. 关于舞弊 Fraud-2020 Mar Q2 a) i), 2018 Mar/Jun Q3 ii)

 管理层和治理层负责预防和发现舞弊。
Management and those charge with governance should prevent and detect fraud.
 审计不负责防止，只负责发现舞弊
Auditors do have responsibility to design audit procedure in order to detect fraud
 即使金额低于重要性水平，也需要执行进一步程序
The amount of XX is immaterial to the financial statements, a misstatement could be
material in conjunction with other misstatements, especially the misstatement is caused by
fraud, so further investigation is need to be performed.
 考虑管理层的诚实程度
XX asked the audit team not to perform any procedures in relation to the fraud may
indicate a lack of professional integrity (1 分), so auditors should keep professional
skepticism to recover further fraud. (1 分)
 无论舞弊金额是否重要，都需要与管理层及治理层进行及时沟通
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Despite the amount is immaterial, the fraud of XXX should be communicated with
management and those charge with governance. (1 分)
 考虑是否有必要对外报告
The auditor should also determine whether they have a responsibility to report the
identified fraud to parties outside the entity, (1 分) as the auditors should comply principle
of confidentiality, they should seek legal advice on the matter. (1 分)
例题 2020 Mar Q2 a) i)
The Goodman Group (the Group) ‘s financial year is ended 31 December 20X4.
Materiality for the audit of the Group financial statements has been determined to be $400,000.
Fraud
The Group finance director has informed the audit team that during the year, a fraud was
carried out by a manager, Mike Trout, in one of the Group’s procurement departments. The
manager had raised fictitious supplier invoices and paid the invoiced amounts into his personal
bank account. When questioned by the Group’s finance director, Mike Trout confessed that he
had stolen $40,000 from the Group. The finance director asked the audit team not to perform
any procedures in relation to the fraud, as the amount is immaterial. He also stated that the
financial statements would not be adjusted in relation to the fraud.
The only audit evidence on file is a written representation from management acknowledging
the existence of the fraud, and a list of the fictitious invoices which had been raised by the
manager, provided by the finance director. The audit working papers conclude that the fraud is
immaterial and no further work is needed.
Discuss the implications of the fraud for the completion of the audit, and the actions to be
taken by the auditor. (6 marks)
Solution:
The amount of $40,000 is immaterial to the financial statements, a misstatement could be
material in conjunction with other misstatements, especially the misstatement is caused by
fraud, so further investigation is need to be performed. (1 分)
Relying solely on a written representation from management and a list of invoices provided
by the Group finance director is not acceptable as this evidence is not sufficiently reliable. (1
分)
The finance director asked the audit team not to perform any procedures in relation to the
fraud may indicate a lack of professional integrity of Group finance director (1 分), so auditors
should keep professional skepticism to recover further fraud. (1 分)
Auditors shall communicate these matters on a timely basis to the appropriate level of
management and those charged with governance (TCWG). (1 分)
fraud to parties outside the entity, (1 分) as the auditors should comply principle of
confidentiality, they should seek legal advice on the matter. (1 分)
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3.4. 关于客户的违法问题 Non-compliance with law -2021 Mar/Jun Q2 d), 2019 Mar/Jun Q1 d)
 审计师对不合规有一定责任，尤其对于与财报相关的不合规问题
The auditor is not responsible for prevent non-compliance, but does have some
responsibility in relation to compliance with laws and regulations, especially where a non-
compliance has an impact on the financial statements. (1 分)
 如果有罚款，还需要考虑对财报及披露的影响
If fines and penalties are probable to pay, the misstatements to financial statement and
adequacy of disclosure should be considered. (1 分)
 考虑管理层的诚信问题
Management integrity
 需及时与管理层及治理层进行沟通
The effect of non-compliance should be communicated with management and those
charge with governance. (1 分)
 考虑是否有必要对外报告
fraud to parties outside the entity, (1 分) as the auditors should comply principle of
confidentiality, they should seek legal advice on the matter. (1 分)
3.5. 关于使用专家工作 Using the work of expert (Valuation, Case)-2018 Sep Q3 b)

When relying on the work of an expert’s work, the auditor must evaluate the expert’s
competence, capability and objectivity, obtain an understanding of the expert’s work and
evaluate the appropriate of the work as audit evidence.
例题 2018 Sep Q3 b)
One issue which I wanted to check with you is that Watson Co has introduced a cash-settled
share-based payment scheme by granting its directors share appreciation rights (SARs) for
the first time this year. This was not identified at planning as a high risk area. The SARs were
granted on 1 July 20X7 at which date the client obtained a valuation of the rights which was
performed by an external firm of valuers. I have filed a copy of the valuation report and I
have looked up the valuers online and have found a very professional looking website
which confirms that they know what they are doing.
Solution:
Using the report from external expert
When using the valuation report from external expert, the auditor must therefore evaluate
whether expert has necessary competence, capabilities and objectivity to perform the
valuations and whether the scope of their work is satisfactory. (1 分)The ‘checking out’ of
the expert online with reference to a website cannot provide sufficient evidence for the
expert’s competence, so it is clearly inadequate for audit purposes. (1 分)
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3.6. 关于集团审计 Group audit
 正确识别重要组成部分 (Significant component) -2017 Mar/Jun Q2 b) c)
 Individual financial significance (15% of group assets or profit)
 Specific nature or circumstances【特定行业，金融工具，汇兑损益等】
 Group auditor must understand and review work of component auditor【了解并复核】
 The communication between the group and component audit should be documented-
 Subsidiary must use component materiality【组成部分必须用组成部分重要性水平】
 母子公司会计准则必须一致-2021 Mar/Jun Q2 a)
The component accounts must be brought into line with the accounting policies used by
the parent company in order to consolidate properly
 集团内部交易即使会在合并时进行抵消也需要执行程序【在抵消前对交易进行检查，确认各
交易在单体报表中无误（初始记录无误）】
Intra-group balances and transaction should be audited even if they would be cancelled
on consolidation, otherwise, unrealized profit between the group would be created on
consolidation statements. -2017 Mar/Jun Q2 a)
 集团内部交易必须适当抵消并实施程序进行检查【对抵消过程进行检查，确保合并报表最终
抵消后数字无误】
Intra-group transaction should be appropriated eliminated, audit procedures should be
performed to ensure adjustments are appropriate. -2021 Mar/Jun Q2 a)
Cameron Co prepares its individual financial statements using local accounting rules, which is
®
allowed under national regulation; it does not use IFRS Standards which is applied by the
rest of the Group. The Group audit partner commented in the working papers that ‘local
accounting rules are very similar to IFRS Standards so there is no need to perform any
additional audit work in relation to the consolidation of Cameron Co due to it using different
accounting policies to the rest of the Group’.
Solution:
Use of local accounting rules
Although the local accounting rules are very similar to IFRS, for the purpose of consolidation,
the same accounting policies must be applied across all Group companies, (1 分)
besides, additional audit procedures should be performed to ensure such translation and
intra-group elimination. (1 分)
However, the Group audit partner concluded no need to perform any additional audit work
indicates a lack of competence. 【执行人工作没有做到位，还需考虑执行人的能力】(1 分)
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3.7. 关于审计工作外包/利用内审的工作【类似集团审计思路】
 It is not prohibited for audit work to be delegated to other audit firms,）but the
engagement partner shall consider XX Co (其他所) ‘s competence and independence to
conduct the audit,【可以外包，但需要考虑其他所的能力及独立性】
 The engagement partner should discussion/communicate with XX Co (外包所) and review
of the work of XX Co (其他所) to ensure evidences are sufficient and appropriate
 重要工作不可以外包给其他所（对财报有重大影响或主管判决较多的不可以 eg：Share base

payment, PPE-fair value, revenue 等）
3.8. 关于内控 Internal control
了解内控 vs 内控测试
 了解内控：通常是定性的考虑是否有效，而且范围比较小。
 内控测试：是定量的考虑是否有效，而且样本范围比较大，且会在全年间进行取样。
公司需要先了解公司，通常的了解包括询问内控是否有效，观察执行情况，或使用穿行测试
(walk through test) 来对某一笔交易进行从头到尾的检查，这些都是为了评估内控的有效性，
通常如果评估有效，则进行内控测试，以降低实质性程序的范围，否则，如果评估内控无
效，则不再进行内控测试，直接进行实质性程序，并加大实质性程序范围
 只有内控好的情况下才有必要做内控测试-2017 Mar/Jun Q2 a) i)
The auditor should only use tests of control as a method of gathering evidence where there
is an expectation that controls are operating effectively, otherwise, the substantive
procedures related the area should be increased.
例题 2017 Mar/Jun Q2 a) i)
Audit work performed at the interim stage at Hyacinth Co, including walk through
procedures and internal control evaluations, concluded that internal controls over intra-
group transactions were not effective, and this was documented in the audit file. At the final
audit, tests of controls were performed to confirm this to be the case.
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Solution
Test of controls
Hyacinth Co concluded internal controls over intra-group transactions were not effective, but
at the final audit, tests of controls were performed, it is an incorrected response. The auditor
should only use tests of control when there is an expectation that controls are operating
effectively, otherwise the substantive procedures related the area should be increased. (1
分)
 不符合内控要求的，即使结果是合理的也要算作内控偏差-2018 Mar/Jun Q3 i)
例题 2018 Mar/Jun Q3 i)
The planned audit approach to trade payables was to place reliance on purchasing controls
and keep substantive tests to a minimum. During controls testing on trade payables, from a
random statistical sample, the audit team identified three purchase orders which had not
been authorised by the procurement manager. On review of the supporting documentation,
the audit team concluded that the items were legitimate business purchases and therefore
concluded that no additional procedures were required.
Solution:
The absence of evidence of authorisation by the procurement manager in relation to the three
purchase orders represents a deviation to the effectiveness of an internal control. The
conclusion that the items were legitimate business expenditure do not resolve the deviation.
(1 分)
The audit team needs to evaluate the effectiveness and consider increasing the original
sample size of test of control. (1 分) If the extended testing identifies more deviations are
found and more substantive testing on the payables should be considered. (1 分)
 Timing of internal control-2021 Mar/Jun Q2 a)

Auditors should obtain audit evidence that the control operated effectively over that
period.
All of these subsidiaries are significant components of the Group and have a financial year
end of 31 January 20X5.
There is a statement that ‘we can rely on the internal controls as they were tested by our firm
in May 20X4’.
Solution：
Timing of internal control
The test of control is performed in May 20X4, 8 months to before the end of financial
statement, however, auditors should obtain audit evidence that the control operated
effectively over that period, (1 分) so more audit evidence should be performed, such as
extend more test of control to the year end. (1 分)
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 分部内控有效不能作为集团整体内控有效的证据-2017 Mar/Jun Q2 a)
Testing the controls in one component cannot provide assurance that the control risk in the
other components/Group is at the same level.
As part of the audit approach, it was determined that extensive testing would be performed
over the internal controls for capital expenditure at Hyacinth Co as it was identified during
planning that the company had made significant acquisitions of plant and equipment during
the year. Following controls testing the internal controls over capital expenditure were
evaluated to be effective in Hyacinth Co.
The working papers conclude that ‘based on the results of controls testing at Hyacinth Co, it
is reasonable to assume that controls are effective across the Group’ and substantive
procedures on property, plant and equipment in each Group company have been planned
and performed in response to this assessment.
Solution
Control over capital expenditure
It is not appropriate to conclude that controls will be effective across the Group just
because they are effective in one of the Group components. Testing the controls in one
component cannot provide assurance in the other components is at the same level.
Especially as Geranium Co is a new subsidiary. (1 分)
3.9. 关于复杂的、高主观判断的科目 (other professional issues)

 是否由 junior 或经验不足的人进行检查
 是否只进行数字检查，而忽略了合理性
Only arithmetic check is not enough and the reasonableness of fair value should be assessed.
Whether the key assumption is out of date.
 关注相关准则是否出现错报
 Going concern-2020 Sep/Dec Q2 a), Pre-Jun 22 Mock Q3 a), 2017 Mar/Jun Q2 c)
 Related party transaction-2021 Mar/Jun Q2 b), 2018 Sep Q3 b), 2017 Mar/Jun Q2 a) i)
 Revenue-2018 Mar/Jun Q3 iii)
 Events after the reporting date-2021 Mar/Jun Q2 b)
 Share-based payment-2018 Sep Q3 b)
 Goodwill-2017 Mar/Jun Q2 c)
 Fair value measurement
 Investment Property
 Intangible Asset
 Impairment
 Non-current assets held for sale
 Discontinued operation
 Operating Segments
 Provisions, Contingent Liabilities and Contingent Assets
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历年真题：
知识点题号
 2020 Sep/Dec Q2 b) √
Matter to consider before acceptance
 2018 Dec Q1 d)
 2021 Mar/Jun Q2√
Group audit+ quality control
 2017 Mar/Jun Q2√
 2020 Sep/Dec Q2 a)√
Quality control  2018 Sep Q3 b)√
 2018 Mar/Jun Q3√
Fraud  2020 Mar Q2 a) i)√
Non-compliance with law  2019 Mar/Jun Q1 d)
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Part E Non-audit assurance
Chapter 11 Overall review of assurance
1. Assurance engagement 鉴证业务

Where a professional accountant (or 'practitioner') evaluates or measures a subject matter that is
the responsibility of another party against suitable criteria and express an opinion which provides
the intended user with a level of assurance about the subject matter.
1.1. Elements of an assurance engagement

 A three-party relationship involving:
- A practitioner
- A responsible party
- Intended user
 An appropriate subject matter 审计对象
 Suitable criteria 相应的标准
 Sufficient appropriate evidence
 A written assurance report (reasonable or limited assurance)
1.2. Different report other than financial statement

 Prospective financial information (未来财务信息)
 Due diligence report (尽职调查)
 Assurance reports in complied pro forma information (预测报告的鉴证)
 Assurance report on service organization ( Type 1 or 2 report) 对服务公司的鉴证业务
1.3. Types of assurance service-Audit

1.3.1. Reasonable (Positive) assurance (合理保证-属于高保证，但不是绝对保证)
意见方式：“In our opinion the financial statements present fairly (not fairly), in all material
respects”【积极保证】
1.3.2. Limited (Negative) assurance-Review (有限保证-属于低保证)

意见方式：Nothing has come to his attention which indicates that the subject matter contains
material misstatements.【消极保证】
2. Audit vs Review
Audit Review
Types of Reasonable (Positive) assurance Limited (Negative) assurance
assurance
In our opinion the financial Nothing has come to his attention
statements present fairly (not fairly), in which indicates that the subject matter
all material respects contains material misstatements.
Procedures Risk assessment, tests of control, Enquiry, analytical review
substantive procedures
(Inspection, recalculation, observation,
enquiry and analytical procedures)
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1.4. Suspected fraud
 Audit has wider scope with tests of detail and tests of control being likely to have uncovered the
fraud
 Limited assurance review only includes enquiry and analytical review – less likely to have
uncovered the fraud
 Even with audit, fraud could have been concealed and may not have been detected
历年真题:
2018 Dec Q1 e) √
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Chapter 12 Prospective financial information (PFI) 未来财务信息预测
1. Purpose of PFI
Prospective financial information means financial information based on assumptions about events
that may occur in the future and possible actions by the entity. (PFI 主要目的：贷款)
2. Level of assurance provided

Limited level of assurance
3. Matters to consider before accepting an engagement to report on PFI【10 分】

 The intended use of the information【考虑使用目的，是否只用于贷款】
XX Co (Audit firm) must consider whether the forecast statement of profit or loss/cash flow
forecast will be used solely for the purpose to support a loan application.
 Whether the information will be for general or limited distribution【所有银行通用还是只提

交给某一个银行】
This issue will impact on the firm’s assessment of the risk associated. If it is intended for
general distribution, since larger audience will rely on, risk would be increased. In this case,
the information is used solely in XXX (根据题干信息修改), risk would be reduced, but this
issue should be confirmed before acceptance the engagement.
 The period covered【覆盖的时间】

Short-term forecasts are likely to be easier to verify and provide assurance on than longer
term projections. In the case, the forecast is for XX years, so the difficulty to verify should be
considered.
 Resources and skills

The firm needs to consider whether it has sufficient staff available with the appropriate skills
and experience needed to perform the PFI engagement.
 如果属于现有的审计客户-2018 Sep Q3 a) i)
Ethical matters
Self-review threat:
Since XX Co is an audit client, so accepting the review of PFI would create a self-review threat,
because the result of the review will be included in financial statement, and the audit team
will be reluctant to raise queries during the external audit.
Advocacy threat:
An advocacy threat arises as the auditor being seen to promote the interests of the client to
get the bank loan, which would compromise objectivity
Safeguard:
- Using separate teams to work on the audit and on the review of PFI
- Independent senior review of the PFI working papers
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 如果不属于现有的审计客户-2020 Mar Q3 a) i)
Client integrity
XX Firm(Auditor) need to consider management’s reasons for appointing a different firm from
its auditors and the potential for management bias in the preparation of the XX forecast in
support of the application for finance. (1 分)
Conflict of interest
XX Firm(Auditor) should also consider whether there are any conflicts of interest between PFI
业务公司 and any of the firm’s existing clients. Where any such conflicts exist, 【1 分】 XX
Firm(Auditor) would be required to notify both PFI 业务公司 and the existing client explaining
the situation and proposed safeguards which will be implemented to mitigate the risk.【1 分】
4. Audit procedures (Evidence)

General procedures:
 Cast the forecast statements of profit or loss/forecast cash flow to confirm its mathematical
accuracy.
 Review whether the PFI is prepared on a consistent basis with (the same format
as)historical financial statement, using appropriate accounting policies.
 Discuss with the management about the key assumptions made in the forecast to assess
their reasonableness and consistency with auditor’s understanding of the client.
Procedures for statement of profit or loss-2018 Sep Q3 a) ii)

Revenue
 Obtain copies of any new customer contracts for existing and new markets to confirm the
reasonableness of the projected growth in revenue
 Agree the predicted revenue to the most recent sales ledgers to confirm the reasonableness
of forecast.
Cost of sales
 Compare gross profit margins to the prior year audited financial statements and
investigate any unusual trend
Staff cost
 Agree the staff cost to the latest payroll records to confirm accuracy and completeness.
Administrative expenses/Overheads
 For a sample of administrative expenses/overheads, review the supporting
documentation such as invoices and utility bills.
Finance costs
 Review the loan agreement of XX Co’s existing loan and recalculate the forecast finance
cost by agreement terms
Procedures for cash flow forecast-2020 Mar Q3 a) i)

Opening balance
 Agree the opening cash position of $XX to the cash book and the bank statement.
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Cash inflow
 Compare the cash receipt forecast against historical cash flow statements and investigate
any significant fluctuations/differences.
 Recalculate forecast cash receipt based on credit sales receivable patten and agree with
post cash received to assess the reasonableness.
Cash outflow
Inventory
 Agree the predicted payment periods to the most recent purchase ledgers to confirm the
Salary
 Agree the salary payments to the latest payroll records and cash book payments to
confirm accuracy and completeness.
Overheads
 For a sample of overhead costs, review the supporting documentation such as invoices and
utility bills.
5. PFI 报告意见
Eg：关于某个假设过于乐观，管理层拒不修改怎么办
If the issue is considered material but not pervasive, then a qualified conclusion should be
given. (1 分)
The conclusion will state that “except for the assumptions over revenue and the profit on disposal,
the assumptions provide a reasonable basis for the forecast.” (1 分)
If the issue is considered material and pervasive an adverse conclusion should be given. (1 分)
*对于 Review report[审阅报告]，意见判断的逻辑跟审计报告一样，但不写审计意见 opinion，而

是写结论(conclusion)，即 qualified/adverse conclusion
历年真题：
知识点题号
2020 Mar Q3 a) i)√
Matters to be considered before accepting PFI
2018 Sep Q3 a) i)√
2020 Mar Q3 a) ii)√
Examination procedures for statement of profit or loss 2018 Sep Q3 a) ii)√
2018 Mar/Jun Q2 b
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历年真题
① 2020 Mar Q3 a)
It is 1 July 20X5. You are a manager in Moritz & Co, a firm of Chartered Certified Accountants which offers
a range of services to audit and non-audit clients. Your firm has been asked to consider a potential
engagement to review and provide an assurance report on prospective financial information (PFI) for
Lavenza Co, which is not an audit client of your firm. Moritz & Co has already conducted specific client
identification procedures in line with money laundering regulations with satisfactory results.
Lavenza Co has approached your firm in order to obtain an independent assurance opinion on a cash
flow forecast which is being prepared for its bankers in support of an application for an increase in its
existing overdraft facility. The following cash flow forecast has been prepared by Lavenza Co for the 12
months to 30 June 20X6:
The following information is also relevant:

1. Lavenza Co is a retailer of academic text books which it sells through its own network of book shops
and online through its website. The revenue from the website includes both cash sales and sales on
credit to educational institutions. The company has provided historical analysis from its trade
receivables ledger indicating that for sales made on credit, 10% pay in the month of the sale, 62%
after 30 days, 16% after 60 days, 8% after 90 days and the remainder are irrecoverable debts.
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2. Lavenza Co receives a settlement discount from its principal suppliers of 8% if it pays within 14 days
of receipt of the inventory. It is company policy to make the early payment wherever possible. If the
company pays after 45 days, it incurs a late payment penalty of 5%.
3. The company already has an established presence in large cities with universities but has seen a
decline in its core operations in recent years which has led to a decrease in revenue and a fall in
liquidity. In order to reverse these trends, the company is planning to extend its operations by
opening new shops in small cities with universities and large colleges.
4. Lavenza Co’s management is planning an online marketing campaign targeted at the university
sector which they believe will increase the company’s market share by approximately 3%.
5. The company has an existing overdraft facility of $12 million with its bankers and has requested an
increase in the facility to $17 million.
Required:
(i) Explain the matters to be considered by Moritz & Co before accepting the engagement to
review and report on Lavenza Co’s prospective financial information;
(6 marks)
(ii) Assuming Moritz & Co accepts the engagement, recommend the examination procedures to
be performed in respect of Lavenza Co’s cash flow forecast.
(9 marks)
Solution:
(i) Matters to consider before accepting the review engagement
The intended use of the information
Moritz & Co must consider whether the cash flow forecast and assurance report will be used solely for
the purpose of the increase in Lavenza Co’s overdraft facility or to arrange new loan. (1 分)
Whether the information will be for general or limited distribution

This issue will impact on the firm’s assessment of the risk associated. If it is intended for general
distribution, since larger audience will rely on, risk would be increased. In this case, the information
is used solely in support of the application to the bank, risk would be reduced, but this issue should
be confirmed before acceptance the engagement. (1 分)
The period covered by the cash flow forecast

Short-term forecasts are likely to be easier to verify and provide assurance on than longer term
projections. In the case of Lavenza Co, the forecast is only for 12 months, this makes the engagement
acceptable. (1 分)
Resources and skills

The firm needs to consider whether it has sufficient staff available with the appropriate skills and
experience needed to perform the PFI engagement for Lavenza Co. (1 分)
Ethical matters
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Given that Moritz & Co are not the auditors, the firm’s independence from Lavenza Co will not have
been previously considered. but it is important to ensure that there are no threats to the firm’s
objectivity which might prevent it from accepting the appointment. (1 分)
Moritz & Co should also consider whether there are any conflicts of interest between Lavenza Co and
any of the firm’s existing clients. Where any such conflicts exist, 【1 分】 Moritz & Co would be
required to notify both Lavenza Co and the existing client explaining the situation and proposed
safeguards which will be implemented to mitigate the risk.【1 分】
Client integrity
Moritz & Co T need to consider management’s reasons for appointing a different firm from its
auditors and the potential for management bias in the preparation of the cash flow forecast in
support of the application for finance. (1 分)
ii) Examination procedures on cash flow forecast (每点 1 分)

General procedures
 Cast the cash flow forecast to confirm its mathematical accuracy.
 Review whether the PFI is prepared on a consistent basis with (the same format as) historical
financial statement, using appropriate accounting policies.
 Discuss with the management about the key assumptions made in the forecast cash flow to
assess their reasonableness and consistency with auditor’s understanding of the client;
现金流量期初余额
 Agree the opening cash position of $9,193,000 to the cash book and the bank statement.
Cash inflow
 Compare the cash receipt forecast against historical cash flow statements and investigate any
significant fluctuations/differences.
 Recalculate forecast cash receipt based on credit sales receivable patten and agree with post
cash received to assess the reasonableness.
 Agree the predicted receivable periods to the most recent sales ledgers to confirm the
Cash outflow
Inventory
 Recalculate forecast cash payment based on credit payment patten and agree with post cash
payment to assess the reasonableness.
 Agree the predicted payment periods to the most recent purchase ledgers to confirm the
 Agree the settlement discount of 8% and the late payment penalty of 5% penalty terms with
suppliers to supporting contractual documentation such as purchase ledger.
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Salary
 Agree the salary payments to the latest payroll records and cash book payments to confirm
accuracy and completeness.
Overheads
 For a sample of overhead costs, review the supporting documentation such as invoices and
utility bills.
Market cost
 Discuss with management about the online market campaign and ensure all the expenditure is
included in the forecast.
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Chapter 13 Forensic audit (Investigation) 法务审计 (调查)
1. Applications of forensic auditing
2. Matters considered before accepting a forensic investigation-2019 Sep/Dec Q3 a) √

 Scope of the investigation【调查的目的】
The firm should establish the specific work the client expects them to perform.
It is likely that XXX (quantify loss, personal liability claims) represents an agreed upon
procedures engagement and these would need to be confirmed with Beyer Co in advance.
 The types of reports and prospective users【报告的形式及预期报告使用者】

The firm must confirm with client what types of report they would expec and whom the
reports would be distributed to.
 Professional competence
The specific type of investigation must be considered as each will be different, if this were
conducted as a criminal investigation, it is also vital that the staff used have sufficient
experience in relation to the gathering and safeguarding of evidence.
 Confidentiality
Firms providing professional services must always ensure that information relating to clients is
not given to third parties without the permission of the client.
 Time pressure, deadlines

It is likely to set the time frame for any initial investigation, so the firm must consider the extent
of the possible investigation and whether they are able to finish the engagement within the
deadline.
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3. Audit Procedures-2019 Sep/Dec Q3 b), Pre-Jun 2022 Mock Q3 b) ii)
了解情况
 Discuss with management to understand what they know about XXX.
 Watch the CCTV to form an impression of the quantity of goods stolen
确定损失的数量
 Perform a full inventory count to identify quantity of XXX.
确定损失的成本
 Obtain a list of XXX and agree to sale price/invoice to calculate the cost of XX.
确认可挽回的损失
 Discuss with the police to establish if any of the goods have been recovered and if, in the
opinion of the police, this is likely to happen.
历年真题：
Matters considered before accepting a forensic investigation
 2019 Sep/Dec Q3 a)√
Audit procedures
 2019 Sep/Dec Q3 b)√
 Pre-Jun 2022 Mock Q3 b) ii)√
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历年真题
① 2019 Sep/Dec Q3 b)
Having accepted the engagement, the operations director provides you with the following summary of
the allegations of the whistle-blower:
‘The warehouse manager has been working with one of the sales representatives to dispatch goods to a
fictitious customer which the warehouse manager has created on the dispatch system. The sales orders
are input by the sales representative into the dispatch system which is not directly linked to the invoicing
and accounting system. After the goods dispatch note is issued by the warehouse manager and the
goods leave the warehouse for delivery to the fictitious customer, the sales representative cancels the
original order. The warehouse manager reverses the dispatch immediately so that the daily report on
inventory movement used to generate invoices in the sales system does not reflect movement of the
goods. The sales representative takes delivery of the goods at the address of the fictitious customer and
then sells the parts on the internet, splitting the proceeds with the warehouse manager. The warehouse
manager supervises and participates in all inventory counts and this way ensures he is able to adjust the
records of inventory to disguise the missing items.’
The operations director has informed you that no authorisation is required for either the cancellation of
orders or the reversal of dispatch notes.
Required:
(i) Recommend the procedures which should be performed in order to quantify the inventory loss
(6 marks)
Solution:
了解情况【写 1-2 点】
 Discuss with management to understand what they know about the fraud and who might be
involved.
 If possible, discuss with the whistle-blower to identify the potential staff involved and the
timescales of the fraud.
 Interview sales, warehouse and accounting staff to identify the system in place for creating a
sales order and for setting up customers within the sales and inventory systems.
确定损失的数量
 Perform a full inventory count to identify discrepancies between the inventory records and
physical inventory.【通过确认丢失数量】
通过其他途径还原 missing 的订单【根据案例信息进行书写】

 Identify which cancelled orders are assigned to the sales representative identified by the
whistle-blower.【通过询问的方式还原】
 Investigate records of inventory written off to identify possible attempts to disguise the
missing items.【存货系统还原】
 Investigate cancelled orders to all invoices raised to identify the total of all orders placed
but not invoiced to establish the maximum potential value of the theft.【通过发票系统还原】
 Identify which customers those orders are assigned to and verify their existence within the
invoicing system and, where possible, their registered business address to ensure they are
genuine customers【通过物流信息还原-没有真实地址的可能就是盗窃的存货】
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确定损失的成本
 Obtain a list of inventory dispatched to fictitious and agree to sale price to calculate the cost of
the inventory stolen.
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Chapter 14 Money laundering
1. Money laundering
Money laundering is the process by which criminals attempt to hide the true source of their funds
in and attempt to make it look like their funds have come from legitimate source.
Three stages
 The first stage is placement (处置)
Which is the introduction or placement of illegal funds into a financial system. (using a cash-
intensive business) 将非法收入投入金融系统
 The second stage is layering (离析)

Which is where the money is passed through a large number of transactions. This is done so
that is makes it difficult to trace the money to its original source. 通过嵌套交易来隐匿资金
来源
 The final stage is integration (融合)

Which is where the dirty money becomes clean as it passes back into a legitimate economy. 将
看似正常的形式将资金重新投入到经济活动中（比如进行在投资）
2. Sign of money laundering (需结合案例分析)

 Cash-based businesses 【现金交易】
 Transaction pass through several companies【交易通过多个公司】
 Multiple small transaction of a similar nature【很多小额的相似交易】
 The creation of complicated groups 【公司结构复杂】
 Overseas business arrangement with no clear business purpose【在没有经营目的的海外交
易】
3. Action when money laundering is suspicious【如果发现洗钱该怎么办】

 Discuss with management and obtain further evidence 【与管理层询问】
 Need to understand the accounting entries 【了解会计如何处理】
 Increase to risk and need for skepticism 【增加职业怀疑】
 Need for independent review【额外追加复核】
 Report to money laundering reporting officer (MLRO) 给专门的洗钱报告官汇报
4. Auditors responsibility to money laundering/Practical anti-money laundering program for

audit firm【审计师对于洗钱的责任/事务所的反洗钱政策】
 Perform customer due diligence, i.e. procedures designed to acquire knowledge about the
firm’s clients; 【对客户进行背景调查】
 Create channels for internal reporting such as appointing of a MLRO to receive the money
laundering reports; 【任命洗钱报告官】
 Keep records, including details of customer due diligence and supporting evidence for
business relationships (Records must be held for 5 years) 【客户背景调查结果需要保留至少 5
年】
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 Train all relevant staff in ML processes and in how to spot suspicious transactions 【对所有员
工进行培训】
MLRO 具体干什么(了解即可)
 The MLRO is likely to be a partner or who has suitable level of experience.
 Audit firm should have established internal reporting lines which should be
followed to report any suspicions.
 Anyone in the firm, if had knowledge or suspicion of ML, must disclose it to the
MLRO.
 MLRO must consider it with all relevant information and determine whether
disclose to a regulatory body authorized for the purposes of these regulations.
5. Customer due diligence (CDD-客户背景调查)-know your client procedures

CDD is part of anti-money laundering regulations, which all audit firms should have in place
when accepting new clients.
This is a crucial part of risk assessment when taking on a new client and allows the firm to
understand not only the identity of the prospective client, but also the nature of the business
and its source of funds. 【客户背景调查：识别客户，了解企业经营范围，资金的来源】
5.1. Steps of CDD

 Identify the customer and verify their identity using documents, data or information obtained
from a reliable and independent source 通过各种文件识别客户
 Confirm the identities of all shareholders. 识别所有的股东
 Identify any beneficial owner who is not the customer.识别是否有不是客户的受益人
 Where a business relationship is established, you will need to understand the purpose and
intended nature of the relationship 考虑商业关系是否有正常是经济利益
5.2. Information obtained for CDD【CDD 的获取途径】

 Company certificate of incorporation-legal status, date and place of incorporation【企业营
业执照】
 A Companies House【英国工商局】 search on customer-existence of company and
shareholders【通过英国工商局（类似‘天眼查’）查询其他是否存在及相关股东】
 The latest financial statements and other companies have an interest-to understand the
business and their relationship
 Identify the source of funding for the company, whether there are bank loans or other
providers of finance
历年真题：
2018 Mar/Jun Q2 a) ii)√
2018 Dec Q3 a)√
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历年真题
① 2018 Dec Q3 a)
You are an audit manager in Thomasson & Co, a firm of Chartered Certified Accountants. You have
recently been assigned to the audit of Clean Co for the year ended 30 September 20X8. Clean Co is an
unlisted company and has been an audit client of your firm for a number of years.
Clean Co is a national distributor of cleaning products. The company buys the cleaning products from
wholesalers and employs a team of approximately 750 sales staff around the country who sell the
company’s products to both domestic households and small to medium-sized businesses. Around 75%
of Clean Co’s sales transactions are cash-based and each of the company’s sales staff prepares a cash
sales report on a monthly basis. According to Clean Co’s chief executive, Simon Blackers, and in order
to foster ‘an entrepreneurial spirit’ amongst his staff, each staff member (including the senior
management team) is encouraged to make cash sales and is paid on a commission basis to sell the
company’s products to friends and family. Mr Blackers leads the way with this scheme and recently sold
cleaning products with a value of $33,000 to a business associate of his. He has transferred these funds
directly into an off-shore bank account in the company’s name on which he is the sole signatory.
Review of audit working papers

Your review of the audit working papers and an initial meeting with Mr Blackers have identified the
following potential issues:
Following your review of the audit engagement letter and the working papers of the taxation section of
the audit file, you have established that Thomasson & Co performed the taxation computation for
Clean Co and completed the tax returns for both the company and Mr Blackers personally. All of the
taxation services have been invoiced to Clean Co as part of the total fee for the audit and professional
services. Mr Blackers’ personal tax return includes a significant number of transactions involving the
purchase and sale of properties in various international locations. The taxation working papers include a
detailed review of a number of off-shore bank accounts in Mr Blackers’ name which identified the
property transactions.
During your initial meeting with Mr Blackers, he informed you that Clean Co is planning to develop a
new website in order to offer online sales to its customers. He has asked Thomasson & Co to provide
assistance with the design and implementation of the website and online sales system.
As a result of your audit review visit at the client’s premises, you have learned that the audit team was
invited to and subsequently attended Clean Co’s annual office party. The client provided each member
of the audit team with a free voucher worth $30 which could be redeemed at the venue during the
party. The audit senior, Paula Metcalfe, who has worked on the audit for the last three years has
informed you that the audit team has always been encouraged to attend the party in order to develop
good client relations.
Required:
(a) (i) Discuss the policies and procedures which Thomasson & Co should have in place in relation to an
anti-money laundering programme; and
(4 marks)
201 / 210
(ii) Evaluate whether there are any indicators of money laundering activities by either Clean Co or its
staff.
(6 marks)
Solution:
i)
 Thomasson & Co should perform customer due diligence, i.e. procedures designed to acquire
knowledge about the firm’s clients; (1 分)
 Thomasson & Co should create channels for internal reporting such as appointing of a money
laundering reporting officer (MLRO) to receive the money laundering reports; (1 分)
 Thomasson & Co should keep records for all clients, including details of customer due diligence and
supporting evidence for business relationships(Records must be held for 5 years) (1 分)
 Thomasson & Co should train all relevant staff in ML processes and in how to spot suspicious
transactions (1 分)
ii)
Cash-intensive business
Clean Co has a high level of cash-based sales (75%) and a high volume of individual sales reports.
The nature of its business therefore creates a significant risk that illicit cash funds are being passed off
as legitimate sales. (2 分)
Mr Blackers’ sale to a business associate for $33,000 may be an example of the placement of illegal
funds in order to legitimise them as genuine sales. (2 分)
International property transactions

High volume of transactions and off-shore bank accounts in Mr Blackers’ name may be indicative of
layering of transactions in attempt to make original source of funds difficult to trace (2 分)
202 / 210
② 2022 Mar/Jun Q1 d）【录屏】
It is 1 July 20X5. You are a manager in Pascal & Co, a firm of Chartered Certified Accountants, and you
are responsible for the audit of The Infinite Co, a new audit client with a financial year ending 30
September 20X5. The Infinite Co is an owner managed family business. The company owns and
operates a theme park.
As you are probably aware, the theme park industry has recently experienced some bad publicity
relating to another one of our new audit clients, Meadow Co, whereby newspapers alleged the
company was under investigation for money laundering. Meadow Co operates a similar business to The
Infinite Co. As a result of this, in your briefing notes you should also:
(d) Using Exhibit 5, conduct a review of the information contained in the Meadow Co client
acceptance assessment to evaluate weaknesses in Pascal & Co’s acceptance procedures and
recommend improvements which should be implemented. (8 marks)
Exhibit 5 Meadow Co
Details of the audit acceptance assessment performed on Meadow Co prior to audit acceptance is
detailed below:
Pascal & Co
Client acceptance checklist
Company name: Meadow Co
Financial documents obtained: Financial statements for last four years
References: To be obtained
Previous auditor: Doomsday & Co
Professional clearance obtained and reviewed: Verbal – no issues
Intended users of financial statements: Owner managers only
High/unusual risks – do any of the following apply?
– Public held shares None
– High risk industry
– Developing business
– Significant recent changes in management
– Poor financial condition
– Other
Firm independence confirmed? Yes
Firm competence confirmed? Yes
Firm resources confirmed? Yes
Fees agreed? Yes
Money laundering procedures:
– Client identity confirmed Passport of owner and his wife
– Company identity confirmed Certificate of incorporation obtained
– Politically exposed persons at company None
– Money laundering risk assessment Low risk
Proposed partner: To be confirmed
Signature of partner and date:
No other paperwork appears to be filed with this document.
203 / 210
Solution
No references have been received prior to acceptance of the client which means that the firm’s client
due diligence procedures have not been properly adhered to.【此处的 references 可能指其他各方相
关内容，比如律师的反馈，网址信息等，该内容真题答案没有详细说明，故此处未展开】（1 分）
The professional clearance from the predecessor auditor should be received in writing prior to
acceptance and this should be reviewed for potential issues and filed with the form on the
permanent file.【前任的沟通内容需要纸质的而不是口头的】（1 分）
Client risk assessment states that the company has no high/unusual risk. Since Meadow Co is being
investigated with respect to money laundering, this may indicate the risk of M Meadow Co is high so
investigation should be done and documented other than comments as “none.”【公司洗钱尚在调查
中可能说明公司的风险偏高，故应及时调查而不是直接写“没有事项需要关注”】（1 分）
No matter what type of the acceptance, assessment of client integrity should be included, but this
does not appear in the form.【需要对客户的诚信度进行评估，但表格里未包含此项】（1 分）
Audit firm should consider whether it is competent to perform the engagement and has the
capabilities, including time and resources, to do so and whether it can comply with relevant ethical
requirements. None of these issues appear to have been considered.【需要对事务所的能力，时间，
资源等问题进行评估，但表格里未包含此项】（1 分）
The money laundering risk assessment is too brief. This should identify whether there are any
potential areas of high risk for money laundering. Such things include: unusual or unexplained
transactions, a cash intensive business, and unusual or complicated corporate structures, but this
issues are not included in the form.【关于洗钱的评估流程过于简单没有专门评估异常交易，现金交
易等事项】（1 分）
For confirming the company identity, a certificate of incorporation and Passport of owner and his
wife alone are not sufficient to confirm current directors and major shareholders.【仅公司的营业执
照及所有人及他老婆的护照不足以识别主要股东】（1 分）
There should be references to the beneficial owners and the control structure of the company. The
auditor should seek to prove the identity of the company and key individuals who have significant
influence to the company. 【对上点进行进一步阐述，需要重点识别对公司有重大影响的人或企业】
（1 分）
Overall, the acceptance document appears too brief and there is a lack of information to support the
conclusions within the document. Where a conclusion is given in the acceptance form, the evidence
to support that conclusion should be filed with it. 【给出结论】（1 分）
*结论不是必须给的，就是在你凑不够分或者有时间的时候，书写总结可以让观点更加清晰。
204 / 210
Chapter 15 Due Diligence
1. What is due diligence

Due diligence is a "fact finding exercise" and is usually conducted to reduce the risk of poor merge
& acquisition decisions.
The main purpose of due diligence is information gathering: gathering of financial, operational,
commercial and market information to ensure the acquirer has full knowledge of the target
company.
2. Purpose of due diligence

 Decrease management time spent assessing the acquisition decision 降低并购决策时间
 Identification of operational issues and risk assessment of the target company 识别并购风险
 Liabilities evaluated and identified 负债识别及评估
 Identify assets not capitalized 识别没有被资本化的资产（eg:内部形成的商标）
 Enhance the credibility of the investment decision 提高投资决策的可信度（尽调由第三方执行
更加独立）
 Planning the acquisition 规划并购
 Evaluation of possible post-acquisition synergies and economies of scale and potential further
costs 评估并购后的整合
205 / 210
历年真题
① 2022 Mar/Jun Q2
It is 1 July 20X5. You are a manager in Marr & Co, a firm of Chartered Certified Accountants and you
are currently carrying out work for Morrissey Co.
Marr & Co is a relatively small firm, with annual practice income of $15 million, of which approximately
half is generated from providing tax, corporate finance and accounting services to its clients.
Marr & Co has been appointed by Morrissey Co, a textile manufacturer and not currently an audit client
of Marr & Co, to carry out a due diligence assignment. Marr & Co conducted all necessary client
acceptance procedures prior to agreeing to perform the due diligence assignment, which you will assist
the partner in planning.
From a discussion with the finance director of Morrissey Co, you have the following information about
the intangible assets of the target company, Brodie Co:
Brodie Co imports some of the dyes used in its manufacturing process, for which an import licence is
necessary. The three-year import licence costs $1·5 million and is recognised as an intangible asset in
the financial statements, amortised over three years.
The company’s textiles are manufactured using the unique ‘PureFab’ manufacturing process, which was
developed to increase the durability of its organic textiles. The ‘PureFab’ manufacturing process is
protected by a patent, which was secured seven years ago and which prevents other manufacturers
from using the same process or describing products as ‘PureFab’ textiles. The cost of the patent was $1
million and this is recognised as an intangible asset in the company’s financial statements, amortised
over 10 years, which is the life of the patent.
You have also gathered the following information about Brodie Co’s current financing arrangements:
Source of finance $’000 Further comments

Equity shares 6,800 This is the value of the company’s issued equity shares
Bank loan 2,400 Secured on the company’s property, plant and
equipment
Venture capital 3,600 Loaned to the company three years ago, to fund
construction of manufacturing plant
Required:
(a) (ii) Recommend, with reasons, the principal additional information which should be made
available by Brodie Co’s management in relation to the company’s financing
arrangements.
(5 marks)
206 / 210
Solution:
(ii)
 In relation to the equity shares, the number of equity shares in issue, the value per share, and the
voting rights attached to each share. This is essential information for Morrissey Co to consider
how many shares to acquire in order to gain control of Brodie Co.通过被投资公司的股数可以推
断出如果想达到控制，Morrissey Co 需购买多少股票。(1 分)
 The rate of interest payable on the bank loan and venture capitalist funds, whether interest is
fixed or variable rate. This is essential for Morrissey Co to consider relevant cash outflow related
to liability. 考虑银行借款及风投借款的利息，以及利率是固定的还是变动的，从而推断 Morrissey
Co 在并购过程中对负债的现金流。(1 分)
 Whether any loan covenants exist, in particular in relation to the bank loan and venture capitalist
funds. This is essential for Morrissey Co to consider relevant cash outflow related to liability.考虑
是否有违约条款，从而推断 Morrissey C 在并购过程中对负债的现金流。(1 分)
 The terms of the finance provided by the venture capitalists, whether some or all of the debt
could be converted to equity shares. The existence of convertible debt would mean a potential
future dilution of control in relation to Morrissey Co’s shareholding in Brodie Co. 考虑风投的借
款是否有可能转化为股票，该条款有可能稀释 Morrissey Co 对被投资公司的股权。(1 分)
 Details of any other sources of finance used by the company, for example, lease arrangements,
directors’ loans to the company. This is to ensure that all sources of finance have been identified
and that Morrissey Co has complete understanding of Brodie Co’s financing arrangements. 考虑公
司是否还有其他来源的的借款，比如租赁，来自于董事的借款，该条款有助于 Morrissey Co 对负
债有全方位的了解。(1 分)
207 / 210
Chapter 16 Social and environment information
1. Environment
1.1. Discuss how climate-related risks should be considered by the audit team
 了解公司以便获得关键相关的信息
During the planning stage, we must obtain an understanding of the entity and the industry
and the level of exposure the client has to environment.
 考虑对财报具体的 RoMM 风险
Risks of material misstatement related to CRR should be considered, such as the
impairment of hotels, treatment of repair costs, provisions and contingencies and going
concern.
 考虑 CRR 对审计程序的影响
The results of our risk assessment will influence the design of our audit procedures, such
as impairment of assets, provisions and contingencies, disclosures, etc.
 考虑政府对 CRR 披露的要求同时考虑合规性

Some governments have brought in requirements for disclosures relating to CRR and
therefore we will need to ensure compliance with thess requirements.
 考虑是否需要专家
Expert may need to be used to provide audit evidence, for example, the fair value of hotel
properties after hurricanes or bush fires should revaluated by expert.
2. Social responsibility
 财报（科目影响+going concern）
 Other information (read not audit)
 Ethics (又审计又复核被审计单位社会责任的话有可能有 Self-review 问题)
 Competence
208 / 210
历年真题
① Pre-Sep 2022 Mock
Bransfield Co operates a chain of 95 luxury hotels. Revenue is generated from the letting of hotel
rooms, conference and meeting rooms. A 20% deposit is taken when a booking is made.
This year’s results show a return to profitability for the company, following several years of losses. Hotel
trade journals show that on average, revenue in the industry has increased by around 20% this year.
Despite improved profitability, Bransfield Co has poor liquidity, and is currently trying to secure further
long-term finance from the bank.
In June 20X5, three hotels situated near a major river were severely damaged by a flood. All of the
hotels, which were constructed by Bransfield Co only two years ago, need extensive repairs and
refurbishment at an estimated cost of $15 million, which has been provided in full and recognised
within operating expenses. All of the buildings are insured for damage caused by flooding. The repair
work is expected to commence in August 20X5 and be completed in December 20X5. The hotels are
currently closed whilst the repairs are undertaken and it is expected that they will reopen in January
20X6. Management have not performed an impairment review of these properties as they are due to
be repaired within the next six months.
Exhibit 4 Notes from engagement partner
The International Auditing and Assurance Standards Board (IAASB) has issued an audit practice alert
relating to the auditor’s consideration of climate-related risks. We will need to make sure we follow this
guidance as Bransfield Co is becoming more exposed to climate-related risks such as flooding affecting
hotels as mentioned in Exhibit 2. Other clients within the hospitality industry are also seeing evidence of
climate-related risks where they have hotels located in areas affected by hurricanes and bush fires
which are occurring with greater frequency. We will need to adapt our audit approach accordingly for
key audit areas that are impacted by such events.
Using the information provided in Exhibit 4, discuss how climate-related risks should be considered by
the audit team during the audit of Bransfield Co. You are not required to consider the impact of
such matters on the auditor’s report, just the planning and performance of the audit.
(8 marks)
209 / 210
Solution：
了解公司以便获得 CRR 相关的信息
During the planning stage, we must obtain an understanding of the entity and the industry and the
level of exposure the client has to climate-related risks (CRR). (1 分)
酒店是有可能受到飓风，火灾等自然灾害的影响
For hotel chains such as Bransfield Co, there is evidence of CRR in relation to the flood damaged hotels.
It is possible that further risks could arise in future if hotels are damaged by events such as
hurricanes, bush fires or other natural disasters caused by climate change. (1 分)
考虑被审计单位的风险评估流程及内控的有效性
The auditors should consider the client’s own risk assessment procedures when considering the
effectiveness of the client’s system of internal control. (1 分)
考虑对财报具体的 RoMM 风险
Risks of material misstatement related to CRR should be considered, such as the impairment of
hotels, treatment of repair costs, provisions and contingencies and going concern. (1 分)
考虑政府对 CRR 披露的要求同时考虑合规性

Some governments have brought in requirements for disclosures relating to CRR and therefore we
will need to ensure compliance with thess requirements. (1 分)
考虑 CRR 对审计程序的影响
The results of our risk assessment will influence the design of our audit procedures, such as
impairment of assets, provisions and contingencies, disclosures, etc. (1 分)
考虑是否需要专家
Expert may need to be used to provide audit evidence, for example, the fair value of hotel properties
after hurricanes or bush fires should revaluated by expert. (1 分)
考虑对 going concern 的影响（该点在 RoMM 已提及，但重点强调，更加细致的说明有可能得到更

多分值）
Extreme weather may affect the continuing sales of hotel, the uncertainty of going concern and the
adequacy of disclosures related to going concern should pay more attention by auditors. (1 分)
210 / 210

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米粒儿宝典

Chapter 2 Business risk ........................................................................................................................................ 74

IAS 19 Employee benefits ......................................................................................................................................... 124

5. Customer due diligence ................................................................................................................................... 202

Overall review of AAA

1. 考试时间：3 小时 15 分钟 (答题时间)+10 分钟 (读考试指南时间)

Matters to consider （10 分）

Chapter 1 Audit risk

IFRS 15 Revenue from Contracts with Customers-FA, FR, SBR

2. Sales with return basis 附有退货条款的销售

4. Principal vs agent【主要责任人 vs 代理人】-2023 年 3 月考到

11. Sales with discount

 Grants related to assets

 Grants related to cost

审计关键点-2021 Mar/Jun Q1 b)√, 2019 Sep/Dec Q1 a)√, 2018 Dec Q1 b)

Total assets - $550 million (20X4 - $545 million)

2. 有减值迹象时（产品滞销，存货天数/水平上升）-2021 Marjun Q1 b)√

 Revaluation model-Fair value less accumulated depreciation

1.3. Impairment【有迹象时进行减值测试 Eg：火灾，检查时发现无法正常使用】

3. 固定资产的更新及翻修-refurbishment（Maintenance & repairs）-2020 Sep/Dec Q1√

 Fair value mode (不再折旧)

假设购入价值 1000 万，年末评估价值 1200 万

3. 从 PPE（cost model）转入 investment property（fair value model）：

*PPE 及 Investment property 都使用 Asset register（资产登记簿） 来进行初始价值，折旧，价格变

 Indefinite useful life (无限使用年限)

Goodwill-产生与并购过程中（内部形成的 goodwill 不能确认），列式在母公司合并报表中

Goodwill 的计算 (Initial measurement of acquisition)- 2018 Sep Q1 a) √

Initial measurement of goodwill arising on acquisition of Lynx Co(goodwill 的具体计算)

1. 什么时候需要做 impairment test

Goodwill 减值时是放在 Cash generating unit【资产组 CGU】，这个资产组其实就是并购的子

1.2. PPE/ Intangible asset (finite life)

2. 如何确认 impairment loss

Fair value less

Impairment loss=Carrying value($10m)-Recoverable amount (higher of $9m&$8m)=1m

【The fair value less costs to sell 是根据销售损坏机器可能产生的销售收入估算的。Value in use 是根

1. 什么情况下分类至 held for sale (HFS)-属于 Current assets

Dr Held for sale-(PPE/IA/Goodwill)

Dr Impairment loss (P&L)

1. Discontinued operation (DO)确认条件：

不能确认为 provision 的情况

3. Contingent asset (可能收到的保险赔款)

 如果非常非常肯定(virtually certain)-正式确认书（formal confirmation）

Impairment of flood damaged hotels

Insurance claim for repair costs

Exhibit 5 – Potential new subsidiary

Related party transaction (RPT)

Eg：公司一共 10 人，每人给 100 股，授予日股票市价为$15，3 年后行权。

Grant date: 授权日【就是送股票的那一天】

记录利息【Lease liability】 记录折旧【Right of use assets】-cost model

记录利息【Lease liability】 记录折旧【Right of use assets】-cost model

记录利息 PPE 不从账面上移除，后续正常记录折旧

审计关键点：-2019 Sep/Dec Q2 a) i)√

Subsidiary 子公司- control (50%以上)- Consolidation – IFRS 10

类别 Subsidiary Joint venture Associate

IFRS 3 Business combination-SBR

Elimination of the inter-group transaction

Foreign currency transaction【外币折算】

Foreign financial statement translation【外币财报折算】-AAA 答案不提及

Related party transaction

Elimination of the inter-group transaction

IAS 33 Earnings per Share

Use of expert —change in fair value due to recent storms

Projected Actual % change

*PPE 及 Investment property 都使用 Asset register（资产登记簿）来进行初始价值，折旧，价格变

记录利息【Lease liability】记录折旧【Right of use assets】-cost model

记录利息【Lease liability】记录折旧【Right of use assets】-cost model

2) 对于高管不让调查要考虑 management integrity

陈述排序理由会增加专业分-写在题目最后即可【不用都说挑 1-2 个说一下就行了】：

⑤ Trend 或其他计算额外增加 0.5 分 (每次计算 0.5 分，一般最多 2-3 分)

User entity(client)-被审计单位对财报 User auditor-事务所

Purchase from Lakewell Co【金额最大可以排第一】

Competition and marketing expenses(写标题会方便考官判分也会增加逻辑分)