week2.docx - Homework Questions week 2 3.18 You have been asked by your audit client Blue Water Ltd to prepare a report that analyses the potential

week2.docx - Homework Questions week 2 3.18 You have been...

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Homework Questions week 2 3.18 You have been asked by your audit client Blue Water Ltd to prepare a report that analyses the potential acquisition of Ocean Pty Ltd. As part of your analysis, you decide to verify the accuracy and completeness of Ocean’s most recent cash flow statement. After reviewing the draft of your preliminary analysis, the chief financial officer (CFO) of Blue Water, Jill Symes, has asked you to focus your attention on Ocean’s sales and profitability and to void the distractions of cash flow reporting. She suggests that the acquisition will provide substantial future financial benefits to Blue Water and that confusing the board with cash flow issues would not be helpful to the acquisition or to the likelihood of your being sked to undertake similar engagements in the future. 您的审计客户蓝水有限公司要求您编写一份报告,分析海洋 私人有限公司的潜在收购。作为分析的一部分,您决定验证 Ocean 最新的现金流量表的准确性和 完整性。在审查了初步分析草案后,蓝水首席财务官( CFO )吉尔 · 西姆斯要求您将注意力集中在 海洋的销售和盈利能力上,并消除现金流报告带来的干扰。她 建议,此次收购将为 Blue Water 提供未来可观的财务收益,而将董事会与现金流问题混为一谈,对收购或您将来可能被迫进行类 似活动的可能性没有帮助。 Required: List two threats that may exist in regards to compliance with the fundamental principles of professional ethics and identify the fundamental principles that are at risk of being breached. 列出在遵守职业道德基本原则方面可能存在的 两个威胁,并确定有被违反风险的基本 原则。 The threats in regard to compliance with the fundamental principles are: 遵守基本原则方面的威胁  intimidation threat, based on having to follow the directive of the CFO or risk harming the working relationship and suffering a penalty of lost work (APES 110.100.12(e) or 200.3(e)) 恐吓威胁,基于必须遵循首席财务官的指示或损 害工 作关系的风险,并遭受失业的处罚( APES 110.100.12 e ) 或 200.3 e ))  self-interest threat, where the potential for future benefits may be reduced (i.e. loss of future work if the relationship breaks down (APES 110.100.12(a) or 200.3(a)).The fundamental principles at risk of being breached are: 自我利益威胁,其中未来利益的可能性可能降低(即,如果 关系破裂,未来工 作的损失( APES 110.100.12 a 200.3 a ))。面临被违反风险的基本原则是: integrity —if you are not honest in your analysis. As part of demonstrating integrity you are required to ensure that reports do not
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omit or obscure information, where such omissions or obscurity would be misleading (APES 110.110.2) 诚信 如果您的分析不诚实。作为展示诚信的一部分,您 需要确保报告不会遗漏或模糊信息,如果此 类遗漏或模糊性具有误导性( APES 110.110.2 objectivity —if you allow the intimidation or self-interest to influence your report (APES 110.120.2). 客观性 如果您允许恐 吓或自身利益影响您的报告( APES 110.120.2 )。 competence and due care —a proper competent analysis of the takeover requires consideration of its impact on cash flows (APES 110.130.2). 能力和 适当谨慎 对收购进行适当的胜任分析需 要考虑其对现金流量的影响( APES 110.130.2 )。 3.21 Your audit client comfort Living Ltd has recently built a block of apartments in a coastal resort area. The block consists of 35 two bedroom apartments, with indoor pool, gym and sauna facilities. Comfort Living attracts investors via a timeshare arrangement whereby investors buy one week timeshare allotments. During the planning stage of the current audit of Comfort Living, Robyn Renaldi, the CFO, approaches you to discuss the financial performance of Comfort Living. Robyn tells you that while Comfort Living has more than 100
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