business-reporting-july-2010-exam-paper

Finance income cost 50 comprises bank interest

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Finance income / (cost) 50 Comprises bank interest received on cash balances. Amounts appear reasonable compared to average cash balance and interest rates quoted by the bank. Profit before tax 77 Income tax expense (23) Profit for the period 54 Aducit Reconciled all balances from the consolidation schedules to the audit working papers for the company, noting no exceptions. Bhagat Reconciled all balances from the consolidation schedules to the reporting package ensuring that balances had been translated into £ sterling at appropriate exchange rates in line with group policy and IFRS. Consolidation adjustments A review of the consolidation adjustments is documented on the summarised consolidation schedules (Exhibit 3).
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© The Institute of Chartered Accountants in England and Wales 2010 14 of 16 4. Precision Garage Access plc (PGA) is a listed company which manufactures and installs garage doors for private residences. You are a senior working for PGA’s auditors and are currently supervising the planning and interim audit work for the year ending 30 September 2010. You are also carrying out a review of the interim financial statements for the 9 months to 30 June 2010. As part of the planning process, an audit junior, Claire Chalker, has completed some initial analytical procedures on the management accounts for the nine months ended 30 June 2010. She has provided some background information ( Exhibit 1 ) and set out some basic financial data and notes ( Exhibit 2 ). She does not however have the experience to analyse this data in order to identify audit risks. The engagement manager, Gary Megg, reviewed Claire’s work and sent you the following email: To: A. Senior From: Gary Megg, Engagement Manager Date: 26 July 2010 Subject: PGA audit I have been through the notes prepared by Claire. I think she has highlighted some interesting points, but she has not really analysed the data in any depth or identified key audit issues. There appear to be some financial reporting issues arising from her work which may require adjustment to the management accounts. Prior to our audit planning meeting next week I would like you to: Carry out revised analytical procedures using Claire’s data and other information provided. This work should: o identify any unusual patterns and trends in the data which may require further investigation. Show supporting calculations (where appropriate assume 360 days in a year for the purpose of computing any ratios); and o outline the audit risks that arise from the patterns and trends identified in the analytical procedures and set out the audit procedures you would carry out. Set out the financial reporting issues that arise from the above audit work with respect to the interim financial statements for the 9 months ended 30 June 2010 and are expected to arise for the year ending 30 September 2010. I do not require any detailed disclosure requirements.
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