In order to prevent stress from being set up in the metal, expansion joints are fit
A) relieve
B) reconcile
C) reclaim
D) rectify
A) relieve
B) reconcile
C) reclaim
D) rectify
I put the medicine bottle on the high shelf in order to () children () reaching it.
A.forbid ⋯to
B.prevent ⋯from
C.prohibit ⋯to
D.stop ⋯from
A. T3212
B.Cell_Reselect_hysteresis
C.Cell_Reselect_Offset
D.Rexlev_Access_Min
Which of the following is NOT tree according to the passage?
A.Some children start to smoke out of curiosity.
B.Many children start to smoke because they want to appear mature.
C.In order to have fewer children smokers, parents, teachers and health care workers should not smoke.
D.It is not as difficult to prevent children from starting to smoke as to persuade adults from smoking.
(a) In order for auditors to operate effectively and to provide an opinion on an entity’s financial statements, they are given certain rights.
Required:
State THREE rights of an auditor, excluding those related to resignation and removal. (3 marks)
(b) ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment requires auditors to obtain an understanding of control activities relevant to the audit.
Control activities are the policies and procedures that help ensure that management directives are carried out; and which are designed to prevent and detect fraud and error occurring. An example of a control activity is the maintenance of a control account.
Required:
Apart from maintenance of a control account, explain FOUR control activities a company may undertake to prevent and detect fraud and error. (4 marks)
(c) Describe THREE limitations of external audits. (3 marks)
There can be no doubt that the growth in advertisement is one of the most striking features of the western world in this century. Many businesses such as those handling frozen foods, liquor, tobacco and medicines have been built up largely by advertisement.
We might ask whether the cost of advertisement is paid for by the producer or by the customer. Since advertisement forms part of the cost of production, which has to be covered by the selling price, it is clear that it is the customer who pays for advertisement. However, if large scale advertisement leads to in creased demand, production costs are reduced, and the customer pays less.
It is difficult to measure exactly the influence of advertisement on sales. When the market is growing, advertisement helps to increase demand. When the market is shrinking, advertisement may prevent a bigger fall in sales than would occur without its support. What is clear is that businesses would not pay large sums for advertisement if they were not convinced of its value to them.
Advertisement is often used to ______ .
A.deceive customers
B.increase production
C.arouse suspicion
D.push the sale
(79) There can be no doubt that the growth in advertisement is one of the most striking features of the western world in this century. Many businesses such as those handling frozen foods, liquor, tobacco and medicines have been built up largely by advertisement. We might ask whether the cost of advertisement is paid for by the producer or by the customer. Since advertisement forms part of the cost of production, which has to be covered by the selling price, it is clear that it is the customer who pays for the advertisement. How ever, if large—scale advertisement leads to increased demand, production costs are reduced, and the customer pays less.
It is difficult to measure exactly the influence of advertisement on sales. When the market is growing, advertisement helps to in crease demand. When the market is shrinking, advertisement may prevent a bigger fall in sales than would occur without its support. (80) What is clear is that businesses would not pay large sums for advertisement if they were not convinced of its value to them.
Advertisement is often used to ______.
A.deceive customers
B.increase production
C.arouse suspicion
D.push the sale
The sovereign debt crisis in Europe resulted in countries finding it increasingly difficult and expensive to issue government bonds to raise funds. Two main reasons have been put forward to explain why the crisis took place: firstly, a number of countries continued to borrow excessive funds, because their expenditure exceeded taxation revenues; and secondly, a number of countries allocated significant sums of money to support their banks following the ‘credit crunch’ and the banking crisis.
In order to prevent countries defaulting on their debt obligations and being downgraded, the countries in the EU and the International Monetary Fund (IMF) established a fund to provide financial support to member states threatened by the risk of default, credit downgrades and excessive borrowing yields. Strict economic conditions known as austerity measures were imposed on these countries in exchange for receiving financial support.
The austerity measures have affected Strom Co negatively, and the years 2011 and 2012 have been particularly bad, with sales revenue declining by 15% and profits by 25% in 2011, and remaining at 2011 levels in 2012. On investigation, Strom Co noted that clothing retailers selling clothes at low prices and at high prices were not affected as badly as Strom Co or other mid-price retailers. Indeed, the retailers selling low-priced clothes had increased their profits, and retailers selling luxury, expensive clothes had maintained their profits over the last two to three years.
In order to improve profitability, Strom Co’s board of directors expects to cut costs where possible. A significant fixed cost relates to quality control, which includes monitoring the working conditions of employees of Strom Co’s clothing manufacturers, as part of its ethical commitment.
Required:
(a) Explain the role and aims of the International Monetary Fund (IMF) and discuss possible reasons why the austerity measures imposed on European Union (EU) countries might have affected Strom Co negatively. (10 marks)
(b) Suggest, giving reasons, why the austerity measures might not have affected clothing retailers at the high and low price range, as much as the mid-price range retailers like Strom Co. (4 marks)
(c) Discuss the risks to Strom Co of reducing the costs relating to quality control and how the detrimental impact of such reductions in costs could be decreased. (6 marks)
Sales ordering, goods despatched and invoicing
Heraklion Co sells footballs to a range of large and small sports equipment retailers in several countries. Sales are made through a network of sales staff employed by Heraklion Co, but new customer leads are generated through a third party company. Sales staff are responsible for assessing new customers’ creditworthiness and proposing a credit limit which is then authorised by the sales director. The sales staff have monthly sales targets and are able to use their discretion in granting sales discounts up to a maximum of 10%. They then record any discount granted in the customer master data file.
The sales staff visit customer sites personally and orders are completed using a two-part pre-printed order form. One copy is left with the customer and the other copy is retained by the sales person. The sales order number is based on the sales person’s own identification (ID) number.
The company markets itself on being able to despatch all orders within three working days. Once the order is taken, the sales person emails the finance department and warehouse despatch team with the customer ID and the sales order details and from this a pick list is generated. Sequentially numbered goods despatched notes are completed and filed in the warehouse.
Sequentially numbered invoices are generated using the pick lists for quantities and the customer master data file for prices. Standard credit terms for customers are 30 days and on a monthly basis sales invoices which are over 90 days outstanding are notified to the relevant sales person to chase payment directly with the customer.
Payroll fraud
The finance director, Montse Mirabelle, has informed you that a significant fraud took place during the year in the payroll department. A number of fictitious employees were set up on the payroll and wages were paid into one bank account. This bank account belonged to two supervisors, who were married, and were employed by Heraklion Co. One had sole responsibility for setting up new joiners in the payroll system and the other processed and authorised bank transfer requests for wages and supplier payments. These employees no longer work for the company and Montse has asked the audit firm for recommendations on how to improve controls in this area to prevent this type of fraud occurring again. Heraklion Co operates a Human Resources department.
Required:
(a) Describe TWO methods for documenting the sales system, and for each explain ONE advantage and ONE disadvantage of using this method. (6 marks)
(b) Identify and explain SEVEN deficiencies in the sales system of Heraklion Co and provide a recommendation to address each of these deficiencies. Note: Prepare your answer using two columns headed Control deficiency and Control recommendation respectively. (14 marks)
(c) In relation to the payroll fraud, identify and explain THREE controls Heraklion Co should implement to reduce the risk of this type of fraud occurring again and, for each control, describe how it would mitigate the risk. (6 marks)
(d) Describe substantive procedures the auditor should perform. to obtain sufficient and appropriate audit evidence in relation to Heraklion Co’s revenue. (4 marks)
Mahmood is a junior employee of Tzo Company (a large, listed company). Tzo is a processor of food labelled as containing only high quality meat. The company enjoys the trust and confidence of its customers because of its reputation for high quality products. One day, when passing through one area of the plant, Mahmood noticed some inferior meat being mixed with the normal product. He felt this must be unauthorised so he informed his supervisor, the factory manager, who told Mahmood that this was in fact a necessary cost reduction measure because company profits had been declining in recent months. Mahmood later found out that all stages of the production process, from purchasing to final quality control, were adapted in order to make the use of the inferior meat possible.
The factory manager told Mahmood that the inferior meat was safe for humans to eat and its use was not illegal. However, he told Mahmood that if knowledge of the use of this meat was made public, it would mean that customers might stop buying the products. Many jobs could be lost, probably including Mahmood’s own. The factory manager ordered Mahmood to say nothing about the inferior meat and to conduct his job as normal. Mahmood later discovered that the main board of Tzo was aware of the use of the inferior meat and supported its use in seeking to reduce costs and maintain profits. In covering up the use of the inferior meat, the factory produced a fraudulent quality control report to show that the product was purely based on high quality meat when the company knew that this was not so.
When Mahmood heard this, he was very angry and considered telling an external source, such as the local newspaper, about what he had seen and about how the company was being dishonest with its customers.
Required:
(a) Explain how Mahmood might act, in each case, if he were to adopt either conventional or post-conventional ethical assumptions according to Kohlberg’s definitions of these terms. Your answer should include an explanation of these two terms. (8 marks)
(b) Construct an ethical case for Mahmood to take this matter directly to an external source such as a newspaper. (8 marks)
(c) Some jurisdictions have a compulsory regulatory requirement for an auditor-reviewed external report on the operation and effectiveness of internal controls (such as s.404 of Sarbanes Oxley).
Required:
Explain how such a requirement may have helped to prevent the undisclosed use of the inferior meat at Tzo Company. (9 marks)