The director spent as much time staying in office as he （) walking around the plant.

Sunflower Stores Co (Sunflower) operates 25 food supermarkets. The company’s year end is 31 December 2012. The audit manager and partner recently attended a planning meeting with the finance director and have provided you with the planning notes below.

You are the audit senior, and this is your first year on this audit. In order to familiarise yourself with Sunflower, the audit manager has asked you to undertake some research in order to gain an understanding of Sunflower, so that you are able to assist in the planning process. He has then asked that you identify relevant audit risks from the notes below and also consider how the team should respond to these risks.

Sunflower has spent $1·6 million in refurbishing all of its supermarkets; as part of this refurbishment programme their central warehouse has been extended and a smaller warehouse, which was only occasionally used, has been disposed of at a profit. In order to finance this refurbishment, a sum of $1·5 million was borrowed from the bank. This is due to be repaid over five years.

The company will be performing a year-end inventory count at the central warehouse as well as at all 25 supermarkets on 31 December. Inventory is valued at selling price less an average profit margin as the finance director believes that this is a close approximation to cost.

Prior to 2012, each of the supermarkets maintained their own financial records and submitted returns monthly to head office. During 2012 all accounting records have been centralised within head office. Therefore at the beginning of the year, each supermarket’s opening balances were transferred into head office’s accounting records. The increased workload at head office has led to some changes in the finance department and in November 2012 the financial controller left. His replacement will start in late December.

Required:

(a) List FIVE sources of information that would be of use in gaining an understanding of Sunflower Stores Co, and for each source describe what you would expect to obtain. (5 marks)

(b) Using the information provided, describe FIVE audit risks and explain the auditor’s response to each risk in planning the audit of Sunflower Stores Co. (10 marks)

(c) The finance director of Sunflower Stores Co is considering establishing an internal audit department. Required: Describe the factors the finance director should consider before establishing an internal audit department. (5 marks)

existing client, Sycamore Science Co (Sycamore), whose year end was 30 April 2015. Sycamore is a pharmaceutical company, which manufactures and supplies a wide range of medical supplies. The draft financial statements show revenue of $35·6 million and profit before tax of $5·9 million.

Sycamore’s previous finance director left the company in December 2014 after it was discovered that he had been claiming fraudulent expenses from the company for a significant period of time. A new finance director was appointed in January 2015 who was previously a financial controller of a bank, and she has expressed surprise that Maple & Co had not uncovered the fraud during last year’s audit.

During the year Sycamore has spent $1·8 million on developing several new products. These projects are at different stages of development and the draft financial statements show the full amount of $1·8 million within intangible assets. In order to fund this development, $2·0 million was borrowed from the bank and is due for repayment over a ten-year period. The bank has attached minimum profit targets as part of the loan covenants.

The new finance director has informed the audit partner that since the year end there has been an increased number of sales returns and that in the month of May over $0·5 million of goods sold in April were returned.

Maple & Co attended the year-end inventory count at Sycamore’s warehouse. The auditor present raised concerns that during the count there were movements of goods in and out the warehouse and this process did not seem well controlled.

During the year, a review of plant and equipment in the factory was undertaken and surplus plant was sold, resulting in a profit on disposal of $210,000.

Required:

(a) State Maples & Co’s responsibilities in relation to the prevention and detection of fraud and error. (4 marks)

(b) Describe SIX audit risks, and explain the auditor’s response to each risk, in planning the audit of Sycamore Science Co. (12 marks)

(c) Sycamore’s new finance director has read about review engagements and is interested in the possibility of Maple & Co undertaking these in the future. However, she is unsure how these engagements differ from an external audit and how much assurance would be gained from this type of engagement.

Required:

(i) Explain the purpose of review engagements and how these differ from external audits; and (2 marks)

(ii) Describe the level of assurance provided by external audits and review engagements. (2 marks)

2 Ice-Time Ltd (ITL) manufactures a range of sports equipment used in a variety of winter-sports in Snowland.

Development engineers within ITL have recently developed a prototype of a small engine-propelled bobsleigh named

the ‘Snowballer’, which has been designed for use by young children. The directors of ITL recently spent ￡200,000

on market research, the findings of which led them to believe that a market exists for the Snowballer.

The marketing director has suggested that ITL should use the ‘Olympic’ brand in order to market the Snowballer.

The finance director of ITL has gathered relevant information and prepared the following evaluation relating to the

proposed manufacture and sale of the Snowballer.

(1) Sales are expected to be 3,200 units per annum at a selling price of ￡2,500 per unit.

(2) Variable material, labour, and overhead costs are estimated at ￡1,490 per unit.

(3) In addition, a royalty of ￡150 per unit would be payable to Olympic plc, for the use of their brand name.

(4) Fixed overheads are estimated at ￡900,000 per annum. These overheads cannot be avoided until the end of the

year in which the Snowballer is withdrawn from the market.

(5) An initial investment of ￡5 million would be required. A government grant equal to 50% of the initial investment

would be received on the date the investment is made. However, because the Snowballer would be classified as

a luxury good, no tax allowances would be available on this initial investment. The estimated life cycle of the

Snowballer is six years.

(6) Corporation tax at the rate of 30% per annum is payable in the year in which profit occurs.

(7) All cash flows are stated in current prices and, with the exception of the initial investment and the government

grant, will occur at the end of each year.

(8) The nominal cost of capital is 15·44%. Annual inflation during the period is expected to amount to 4%.

Required:

(a) Calculate the net present value (NPV) of the Snowballer proposal and recommend whether it should be

undertaken by the directors of ITL. (4 marks)

, listen to music and snap photos wherever you are…but it also turns you into a workaholic, it seems.

A study suggests that, by giving you access to emails at all times, the all-singing, all-dancing mobilephone adds as much as two hours to your working day. Researchers found that Britons work an additional 460 hours a year on average as they are able to respond to emails on their mobiles.

The study by technology retailer Pixmania reveals the average UK working day is between 9 and 10 hours, but a further two hours is spent responding to or sending work emails, or making work calls. More than 90 percent of office workers have email-enabled phones, with a third accessing them more than 20 times a day. Almost one in ten admits spending up to three hours outside their normal working day checking work emails. Some workers confess they are on call almost 24 hours a day, with nine out of ten saying they make work emails and calls outside their normal working hours. The average time for first checking emails is between 6 am and 7 am, with more than a third checking their first emails in this period, and a quarter checking them between 11 pm and midnight.

Ghadi Hobeika, marketing director of Pixmania, said, “The ability to access literally millions of apps, keep in contact via social networks and take photos and video as well as text and call has made smartphones invaluable for many people. However, there are drawbacks. Many companies expect their employees to be on call 24 hours a day, seven days a week, and smartphones mean that people literally cannot get away from work. The more constantly in contact we become , the more is expected of us in a work capac ity(容量 ). ”

33. What can we conclude from the text？()

A. All that glitters is not gold

B. It never rains but pours

C. Every coins has two sides

D. It’s no good crying over spilt milk

34. The underlined word “accessing” in the third paragraph can be replaced by “________”.

A. calling

B. reaching

C. getting

D. using

35. Which of the following is true according to the text？()

A. The average UK working time is between nine and twelve hours

B. Nine- tenths spent over three hours checking work emails

C. One-fourth check their first mail between 11 pm and midnight.

D. The average time for first checking emails is between 6 am and 8 am.

36. What’s the main idea of the text？()

A. workaholics like smartphones.

B. Smartphones bring about extra work.

C. smartphones make our life easier.

D. Employers don’t like smartphones.

ss of 33 students taking his course in statistics into two groups. The “traditional” group was taught in a classroom every Saturday morning for 14 weeks. The “on-line” group came together only for examinations at the start and end of the course. None of the students in either group knew they were part of an experiment. The online group used electronic mail to cooperate in groups of three, assigned casually. They also took part in weekly discussions held on the Internet and weekly “live” online talk session regulated by Schutte. At the end of the course, the on-line students scored 20 per cent higher in their exam. A subsequent questionnaire indicated that they had spent more time on their coursework, and that they understood the material better. Schutte attributes the virtual students’ success to their eagerness to discuss their work on-line. The traditional students tended to work in isolation. “I would say the cooperation resulted from being afraid of having no face-to-face interaction with a professor,” Schutte says. He does not think that the on-line students became more enthusiastic simply because of the novelty of working with the Internet, “most of that gave way to discouragement due to the technology problems.” “We believe you can’t dispose of the help of a teacher, at least in schools,” says Jeff Morgan, director of communications technologies at the UK National Council for Educational Technology, “though the results are perfectly reasonable for university-age students.”

(1)Schutte’s experiment focuses on the use of on-line education _____

A、as a substitute for conventional teaching

B、in support of conventional teaching

C、as an improvement of conventional teaching

D、as a part of conventional teaching

(2)On-line education is different from the traditional one in that _____

A、it does not need any teachers

B、students work alone

C、there is much cooperation among students

D、exams are taken on-line

(3)The on-line group do better than the traditional group because _____

A、they work together through the Internet

B、they are interested in the Internet

C、they want to do better than the “traditional” group

D、they don’t like the traditional teaching

(4)The result of the study shows that _____

A、students can learn without teachers

B、learning at home is better than attending courses in the classroom

C、working on technology problems creates enthusiasm for students

D、advanced technology can enhance learning

(5)Jeff Morgan’s attitude toward the on-line teaching is _____

A、pessimistic

B、positive

C、neutral

D、critical

The director was critical ______ the way we were doing the work.

A) atB) inC)ofD) with

A.on

B.to

C.with

D.about

A.SELECT * FROM Movie WHERE director LIKE ‘_a_’;

B.SELECT * FROM Movie WHERE director LIKE ‘%a%’;

C.SELECT * FROM Movie WHERE director LIKE ‘%a_’;

D.SELECT * FROM Movie WHERE director LIKE ‘_a%’;