PRACTICE QUESTIONS – SECTION B
PROFESSIONAL AND ETHICAL CONSIDERATIONS, QUALITY
MANAGEMENT AND PRACTICE MANAGEMENT
59 FORSYTHIA GROUP – S22
Required:
Evaluate the quality management and other professional matters identified during
your review in respect of the planning and performance of the Forsythia Group audit
and recommend appropriate actions to be taken. (20 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation, professional scepticism and judgement, and commercial acumen in
your answer. (5 marks)
(Total: 25 marks)
60 JAMES & CO M21/J21
Required:
In relation to the matters described in Exhibits 1 to 3, 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 management and other professional issues raised in
respect of:
(a) Cameron Co, using Exhibit 1 (8 marks)
(b) Dean Co, using Exhibit 2 (5 marks)
(c) Horner Co, using Exhibit 3 (7 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation, professional scepticism and judgement and commercial acumen in
your answer. (5 marks)
(Total: 25 marks)
61 THOMASSON & CO – DEC 18
Required:
(a) Using the information in Exhibits 1 and 2:
(i) Discuss the policies and procedures which Thomasson & Co should have in place
in relation to an anti‐money laundering program, and (4 marks)
(ii) Evaluate whether there are any indicators of money laundering activities by
either Clean Co or its staff. (6 marks)
(b) Using the information in Exhibit 2, comment on the ethical and professional
issues arising from your review of the audit working papers and recommend any
actions which should now be taken by Thomasson & Co. (10 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation, professional scepticism and judgement and commercial acumen in
your answer. (5 marks)
(Total: 25 marks)
62 WESTON & CO – DEC 14
Required:
(a) Using the information in Exhibit 1:
(i) Explain the specific matters to be included in the audit proposal (tender
document), other than those relating to the audit fee. (8 marks)
(ii) Assuming Weston & Co is appointed to provide the audit service to Jones Co,
discuss the issues to be considered by the audit firm in determining a fee for the audit
including any ethical matters raised. (6 marks)
(b) Using the information in Exhibit 2, explain the ethical threats raised by the long
association of senior audit personnel with an audit client and the relevant safeguards
to be applied, and discuss whether Bobby Wellington can act as engagement quality
reviewer in the future audits of Ordway Co. (6 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation, professional scepticism and judgement and commercial acumen in
your answer. (5 marks)
(Total: 25 marks)
63 DRAGON GROUP - JUN 09
Required:
(a) Recommend and describe the principal matters to be included in your firm’s
tender document to provide the audit service to the Dragon Group. (8 marks)
(b) Using the specific information provided, evaluate the matters that should be
considered before accepting the audit engagement, in the event of your firm being
successful in the tender. (6 marks)
(c) Discuss how transnational audits may differ from other audits of historical
information and how this may contribute to a higher level of audit risk in relation to
the audit of Dragon Group. (6 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation, professional scepticism and judgement and commercial acumen in
your answer. (5 marks)
(Total: 25 marks)
64 SPANIEL – JUN 13
Required:
(a) Using the information in Exhibit 1, explain the matters that should be considered
in determining whether Groom & Co is liable to Spaniel Co in respect of the fraud.
(5 marks)
(b) Using the information in Exhibit 2, discuss why the audit of financial instruments
is particularly challenging, and explain the matters to be considered in planning the
audit of Bulldog Co’s forward exchange contracts. (10 marks)
(c) Using the information in Exhibit 3, discuss why the auditor should presume that
there are risks of fraud in revenue recognition and why ISA 240 requires specific
auditor responses in relation to the risks identified. (5 marks)
Professional marks will be awarded for the demonstration of skill in analysis and
evaluation and professional scepticism and judgement in your answer. (5 marks)
(Total: 25 marks)