(ii) the factors that should be considered in the design of a reward scheme for BGL; (7 marks)

题目

(ii) the factors that should be considered in the design of a reward scheme for BGL; (7 marks)

相似考题

1.Formal authority is often referred to as legitimate power. Which two other forms of power are also considered to be legitimate power?A . Reward and penaltyB . Reward and referentC . Referent and expertD . Expert and rewardE . Penalty and referent

2.(b) (i) Discuss the main factors that should be taken into account when determining how to treat gains andlosses arising on tangible non-current assets in a single statement of financial performance. (8 marks)

3.(ii) Discuss whether gains and losses that have been reported initially in one section of the performancestatement should be ‘recycled’ in a later period in another section and whether only ‘realised’ gains andlosses should be included in such a statement. (9 marks)

4.(ii) the recent financial performance of Merton plc from a shareholder perspective. Clearly identify anyissues that you consider should be brought to the attention of the ordinary shareholders. (15 marks)

参考答案和解析
正确答案：
(ii) The factors that should be considered in the design of a reward scheme for BGL.
– Whether performance targets should be set with regard to results or effort. It is more difficult to set targets for
administrative and support staff since in many instances the results of their efforts are not easily quantifiable. For
example, sales administrators will improve levels of customer satisfaction but quantifying this is extremely difficult.
– Whether rewards should be monetary or non-monetary. Money means different things to different people. In many
instances people will prefer increased job security which results from improved organisational performance and
adopt a longer term-perspective. Thus the attractiveness of employee share option schemes will appeal to such
individuals. Well designed schemes will correlate the prosperity of the organisation with that of the individuals it
employs.
– Whether the reward promise should be implicit or explicit. Explicit reward promises are easy to understand but in
many respects management will have their hands tied. Implicit reward promises such as the ‘promise’ of promotion
for good performance is also problematic since not all organisations are large enough to offer a structured career
progression. Thus in situations where not everyone can be promoted there needs to be a range of alternative reward
systems in place to acknowledge good performance and encourage commitment from the workforce.
– The size and time span of the reward. This can be difficult to determine especially in businesses such as BGL
which are subject to seasonal variations. i.e. summerhouses will invariably be purchased prior to the summer
season! Hence activity levels may vary and there remains the potential problem of assessing performance when
an organisation operates with surplus capacity.
– Whether the reward should be individual or group based. This is potentially problematic for BGL since the assembly
operatives comprise some individuals who are responsible for their own output and others who work in groups.
Similarly with regard to the sales force then the setting of individual performance targets is problematic since sales
territories will vary in terms of geographical spread and customer concentration.
– Whether the reward scheme should involve equity participation? Such schemes invariably appeal to directors and
senior managers but should arguably be open to all individuals if ‘perceptions of inequity’ are to be avoided.
– Tax considerations need to be taken into account when designing a reward scheme.
更多“(ii) the factors that should be considered in the design of a reward scheme for BGL; (7 marks)”相关问题

  • 第1题：

    (ii) Explain the organisational factors that determine the need for internal audit in public listed companies.

    (5 marks)


    正确答案：
    (ii) Factors affecting the need for internal audit and controls
    (Based partly on Turnbull guidance)
    The nature of operations within the organisation arising from its sector, strategic positioning and main activities.
    The scale and size of operations including factors such as the number of employees. It is generally assumed that larger
    and more complex organisations have a greater need for internal controls and audit than smaller ones owing to the
    number of activities occurring that give rise to potential problems.
    Cost/benefit considerations. Management must weigh the benefits of instituting internal control and audit systems
    against the costs of doing so. This is likely to be an issue for medium-sized companies or companies experiencing
    growth.
    Internal or external changes affecting activities, structures or risks. Changes arising from new products or internal
    activities can change the need for internal audit and so can external changes such as PESTEL factors.
    Problems with existing systems, products and/or procedures including any increase in unexplained events. Repeated or
    persistent problems can signify the need for internal control and audit.
    The need to comply with external requirements from relevant stock market regulations or laws. This appears to be a
    relevant factor at Gluck & Goodman.

  • 第2题：

    (ii) Briefly discuss FOUR non-financial factors which might influence the above decision. (4 marks)


    正确答案：
    (ii) Four factors that could be considered are as follows:
    (i) The quality of the service provided by NSC as evidenced by, for example, the comfort of the ferries, on-board
    facilities, friendliness and responsiveness of staff.
    (ii) The health and safety track record of NSC – passenger safety is a ‘must’ in such operations.
    (iii) The reliability, timeliness and dependability of NSC as a service provider.
    (iv) The potential loss of image due to redundancies within Wonderland plc.

  • 第3题：

    (b) Advise the management of SCC Ltd of THREE strategies that should be considered in order to improve the

    future performance of SCC Ltd. (6 marks)


    正确答案：
    (b) The four quadrants of the Boston-growth share matrix summarise expected profits and resultant cash flows and recommends
    an outline strategy to follow which rather simplistically may be summarised as invest in stars, scrutinise the problem children,
    milk the cows and divest the dogs.
    Value Chain Analysis
    It is vital that the management of SCC Ltd undertake a value chain analysis of each of its divisions in order to identify and
    eliminate all non-value added activities, thereby improving profitability and cash flow without necessarily increasing turnover
    or market share.
    Divestment of the Footwear division
    Serious consideration should be given to the divestment of the Footwear division. This will enable resources to be redirected
    to divisions categorised as problem children i.e. the Industrial and Children’s divisions.
    Support the Stars
    As far as the Fashion division is concerned, it is obviously in a growth market and currently performing well. It is vital, given
    the forecast performance of the other subsidiaries that the management of SCC Ltd do not concentrate on the poor performers
    to the detriment of its only star.

  • 第4题：

    (b) Using the information contained in Appendix 1.1, discuss the financial performance of HLP and MAS,

    incorporating details of the following in your discussion:

    (i) Overall client fees (total and per consultation)

    (ii) Advisory protection scheme consultation ‘utilisation levels’ for both property and commercial clients

    (iii) Cost/expense levels. (10 marks)


    正确答案：

    (ii) As far as annual agreements relating to property work are concerned, HLP had a take up rate of 82·5% whereas MAS
    had a take up rate of only 50%. Therefore, HLP has ‘lost out’ to competitor MAS in relative financial terms as regards
    the ‘take-up’ of consultations relating to property work. This is because both HLP and MAS received an annual fee from
    each property client irrespective of the number of consultations given. MAS should therefore have had a better profit
    margin from this area of business than HLP. However, the extent to which HLP has ‘lost out’ cannot be quantified since
    we would need to know the variable costs per consultation and this detail is not available. What we do know is that
    HLP earned actual revenue per effective consultation amounting to ￡90·90 whereas the budgeted revenue per
    consultation amounted to ￡100. MAS earned ￡120 per effective consultation.
    The same picture emerges from annual agreements relating to commercial work. HLP had a budgeted take up rate of
    50%, however the actual take up rate during the period was 90%. MAS had an actual take up rate of 50%. The actual
    revenue per effective consultation earned by HLP amounted to ￡167 whereas the budgeted revenue per consultation
    amounted to ￡300. MAS earned ￡250 per effective consultation.
    There could possibly be an upside to this situation for HLP in that it might be the case that the uptake of 90% of
    consultations without further charge by clients holding annual agreements in respect of commercial work might be
    indicative of a high level of customer satisfaction. It could on the other hand be indicative of a mindset which says ‘I
    have already paid for these consultations therefore I am going to request them’.
    (iii) Budgeted and actual salaries in HLP were ￡50,000 per annum, per advisor. Two additional advisors were employed
    during the year in order to provide consultations in respect of commercial work. MAS paid a salary of ￡60,000 to each
    advisor which is 20% higher than the salary of ￡50,000 paid to each advisor by HLP. Perhaps this is indicative that
    the advisors employed by MAS are more experienced and/or better qualified than those employed by HLP.
    HLP paid indemnity insurance of ￡250,000 which is ￡150,000 (150%) more than the amount of ￡100,000 paid by
    MAS. This excess cost may well have arisen as a consequence of successful claims against HLP for negligence in
    undertaking commercial work. It would be interesting to know whether HLP had been the subject of any successful
    claims for negligent work during recent years as premiums invariably reflect the claims history of a business. Rather
    worrying is the fact that HLP was subject to three such claims during the year ended 31 May 2007.
    Significant subcontract costs were incurred by HLP during the year probably in an attempt to satisfy demand and retain
    the goodwill of its clients. HLP incurred subcontract costs in respect of commercial properties which totalled ￡144,000.
    These consultations earned revenue amounting to (320 x ￡150) = ￡48,000, hence a loss of ￡96,000 was incurred
    in this area of the business.
    HLP also paid ￡300,000 for 600 subcontract consultations in respect of litigation work. These consultations earned
    revenue amounting to (600 x ￡250) = ￡150,000, hence a loss of ￡150,000 was incurred in this area of the business.
    In contrast, MAS paid ￡7,000 for 20 subcontract consultations in respect of commercial work and an identical amount
    for 20 subcontract consultations in respect of litigation work. These consultations earned revenue amounting to
    20 x (￡150 + ￡200) =￡7,000. Therefore, a loss of only ￡7,000 was incurred in respect of subcontract consultations
    by MAS.
    Other operating expenses were budgeted at 53·0% of sales revenue. The actual level incurred was 40·7% of sales
    revenue. The fixed/variable split of such costs is not given but it may well be the case that the fall in this percentage is
    due to good cost control by HLP. However, it might simply be the case that the original budget was flawed. Competitor
    MAS would appear to have a slightly superior cost structure to that of HLP since its other operating expenses amounted
    to 38·4% of sales revenue. Further information is required in order to draw firmer conclusions regarding cost control
    within both businesses.

  • 第5题：

    (d) Comment on THREE factors other than NPV that the directors of ITL should consider when deciding whether

    to manufacture the Snowballer. (3 marks)


    正确答案：
    (d) Factors that should be considered by the directors of ITL include:
    (i) The cash flows are estimated. How accurate they are requires detailed consideration.
    (ii) The cost of capital used by the finance director might be inappropriate. For example if the Snowballer proposal is less
    risky than other projects undertaken by ITL then a lower cost of capital should be used.
    (iii) The rate of inflation may vary from the anticipated rate of 4% per annum.
    (iv) How strong is the Olympic brand name? The directors are proposing to pay royalties equivalent to 6% of sales revenue
    during the six years of the anticipated life of the project. Should they market the Snowballer themselves?
    (v) Would competitors enter the market and what would be the likely effect on sales volumes and selling prices?
    N.B: Only three factors were required.

  • 第6题：

    (b) Identify the most appropriate approved share option scheme for Happy Home Ltd. Outline the scheme

    requirements and the tax benefits of using it compared to the current unapproved scheme. (6 marks)


    正确答案：
    (b) Share option scheme
    The scheme that is best suited to Happy Home Limited is the enterprise management incentive (EMI) scheme. This share
    option scheme is aimed at small fast growing companies, and because the potential risks are considered to be higher, the
    available rewards are greater.
    To qualify, the company must be a trading company, carrying out a qualifying trade in the United Kingdom, with gross assets
    no more than ￡30m. The company must not be under the control of another company.
    A qualifying company can grant each employee unexercised options over shares worth up to ￡100,000 per employee subject
    to a total overall limit of unexercised options of ￡3 million. The options must be granted for commercial reasons to recruit and
    retain the employee(s).
    A qualifying employee is one who works on average 25 hours per week or 75% of their working time and who does not
    (together with his/her associates) have a material interest in the company.
    No income tax or national insurance is charged on either the grant or the exercise of the option provided that the option is
    exercised not more than 10 years from the date of the grant and the amount paid is not less than the market value of the
    shares at the time the option was granted.
    On the sale of the shares, capital gains tax will apply, but business asset taper relief is available. Also in this case, the taper
    relief starts from the date the option is granted and not from the date of exercise, as is the case with other option schemes.

  • 第7题：

    (ii) The shares held in Date Inc and the dividend income received from that company. (7 marks)


    正确答案：
    (ii) Shares held in Date Inc and the related dividend income
    Degrouping charge
    There will be a degrouping charge in Nikau Ltd in the year ending 31 March 2008 in respect of the shares in Date Inc.
    This is because Nikau Ltd has left the Facet Group within six years of the no gain, no loss transfer of the shares whilst
    still owning them.
    Nikau Ltd is treated as if it has sold the shares in Date Inc for their market value as at the time of the no gain, no loss
    transfer. This will give rise to a gain, ignoring indexation allowance, of ￡201,000 (￡338,000 – ￡137,000).
    This gain will give rise to additional corporation tax of ￡60,300 (￡201,000 x 30%).
    Controlled foreign company
    Date Inc is a controlled foreign company. The profits of such a company are normally attributed to its UK resident
    shareholders such that they are subject to UK corporation tax.
    However, none of the profits of Date Inc will be attributed to Nikau Ltd because Date Inc distributes more than 90%
    (￡115,000/￡120,000 = 95·8%) of its chargeable profits to its shareholders.
    Dividend income
    Nikau Ltd is a UK resident company and is therefore subject to corporation tax on its worldwide income.
    The dividend income will be grossed up in respect of the withholding tax giving rise to taxable income of ￡39,792
    (￡38,200 x 100/96). There is no underlying tax as there are no taxes on income or capital profits in Palladia.
    The corporation tax of ￡11,938 (￡39,792 x 30%) will be reduced by unilateral double tax relief equal to the withholding
    tax suffered of ￡1,592 (￡39,792 x 4%) resulting in corporation tax due of ￡10,346 (￡11,938 – ￡1,592).

  • 第8题：

    (b) On 1 April 2004 Volcan introduced a ‘reward scheme’ for its customers. The main elements of the reward

    scheme include the awarding of a ‘store point’ to customers’ loyalty cards for every $1 spent, with extra points

    being given for the purchase of each week’s special offers. Customers who hold a loyalty card can convert their

    points into cash discounts against future purchases on the basis of $1 per 100 points. (6 marks)

    Required:

    For each of the above issues:

    (i) comment on the matters that you should consider; and

    (ii) state the audit evidence that you should expect to find,

    in undertaking your review of the audit working papers and financial statements of Volcan for the year ended

    31 March 2005.

    NOTE: The mark allocation is shown against each of the three issues.


    正确答案：
    (b) Reward scheme
    (i) Matters
    ■ If the entire year’s revenue ($303m) attracted store points then the cost of the reward scheme in the year is at
    most $3·03m. This represents 1% of revenue, which is material to the income statement and very material
    (31·9%) to profit before tax (PBT).
    ■ The proportion of customers who register for loyalty cards and the percentage of revenue (and profit) which they
    represent (which may vary from store to store depending on customer profile).
    ■ In accordance with the assumption of accruals, which underlies the preparation and presentation of financial
    statements (The Framework/IAS 1 ‘Presentation of Financial Statements’), the expense and liability should be
    recognised as revenue is earned. (It is of the nature of a discount.)
    ■ Any restrictions on the terms for converting points (e.g. whether they expire if not used within a specified time).
    ■ To the extent that points have been awarded but not redeemed at 31 March 2005, Volcan will have a liability at
    the balance sheet date.
    ■ Agree the total balance due to customers at the year end under the reward scheme to the sum of the points on
    individual customer reward cards.
    ■ The proportion of reward points awarded which are not expected to be claimed (e.g. the ‘take up’ of points awarded
    may be only 80%, say).
    ■ Whether reward points are valued at selling price or cost. For example, if the average gross profit margin is 20%,
    one point is equivalent to 0·8 cents of goods at cost.
    (ii) Audit evidence
    ■ New/updated systems documentation explaining how:
    – loyalty cards (and numbers) are issued to customers;
    – points earned are recorded at the point of sale; and
    – points are later redeemed on subsequent purchases.
    ■ Walk-through tests (e.g. on registering customer applications and issuing loyalty cards, awarding of points on
    special offer items).
    ■ Tests of controls supporting the extent to which audit reliance is placed on the accounting and internal control
    system. In particular, how points are extracted from the electronic tills (cash registers) and summarised into the
    weekly/monthly financial data for each store which underlies the financial statements.
    ■ Analytical procedures on the value of points awarded by store per month with explanations of variations (‘variation
    analysis’). For example, similar proportions (not exceeding 1% of revenue) of points in each month might be
    expected by store – possibly increasing following any promotion of the ‘loyalty’ scheme.
    Tutorial note: Within a close community, for example, a high proportion of customers might be expected to sign
    up for the reward scheme. However, in big cities, where a large proportion of the customers might be transitory
    (e.g. tourists or other visitors) the proportion may be much lower.
    ■ Tests of detail on a sample of transactions with customers undertaken at store visits. For example, for a sample of
    copy till receipts:
    – check the arithmetic accuracy of points awarded (1 per $1 spent + special offers);
    – agree points awarded for special offers to that week’s special offers;
    – for cash discounts taken confirm the conversion of points is against the opening balance of points awarded
    (not against purchases just made).

  • 第9题：

    (ii) Recommend further audit procedures that should be carried out. (4 marks)


    正确答案：
    (ii) Further audit procedures:
    Request from Peter Sheffield a written representation detailing:
    – the exact nature of his control over Jarvis Co, i.e. if he is a shareholder then state his percentage shareholding, if
    he is a member of senior management then state his exact position within the entity,
    – a comment on whether in his opinion the balance is recoverable,
    – a specific date by which the amount should be expected to be repaid, and
    – a confirmation that there are no further balances outstanding from Jarvis Co, or any further transactions between
    Jarvis Co and Pulp Co.
    Tutorial note: Reference to the Exposure Draft ISA 550 Related Parties (Revised and Redrafted) requirement for both
    general and specific management representations will be awarded credit.
    Review the terms of any written confirmation of the amount, such as a signed agreement or invoice, checking whether
    any interest is due to Pulp Co. The terms should be reviewed for details of any security offered, and the nature of the
    consideration to be provided in settlement.
    From discussion with Peter Sheffield, develop an understanding of the business purpose of the transaction, particularly
    to understand whether the balance is a trade receivable or an investment.
    Review the board minutes for evidence of any discussion of the transaction and the recoverability of the balance
    outstanding.
    Obtain the most recent audited financial statements of Jarvis Co and:
    – ascertain whether Peter Sheffield is disclosed as the ultimate controlling party or disclosed as a member of key
    management personnel,
    – scrutinise the disclosure notes to find any disclosure of the transaction, where it should be described as a related
    party liability, and
    – perform. a liquidity analysis to establish whether the amount can be repaid from liquid assets.

  • 第10题：

    Refer to the exhibit. A network technician is asked to design a small network with redundancy. The exhibit represents this design, with all hosts configured in the same VLAN. What conclusions can be made about this design?（）

    A.The design will function as intended

    B.Spanning-tree will need to be used.

    C.The router will not accept the addressing scheme.

    D.The connection between switches should be a trunk.

    E.The router interfaces must be encapsulated with the 802.1Q protocol.


    参考答案：C

  • 第11题：

    单选题
    Refer to the exhibit. A network technician is asked to design a small network with redundancy. The exhibit represents this design, with all hosts configured in the same VLAN. What conclusions can be made about this design?（）
    A

    The design will function as intended

    B

    Spanning-tree will need to be used.

    C

    The router will not accept the addressing scheme.

    D

    The connection between switches should be a trunk.

    E

    The router interfaces must be encapsulated with the 802.1Q protocol.


    正确答案： C
    解析： 暂无解析

  • 第12题：

    多选题
    You need to design the VLAN scheme for the Company network. Which two statements are true  about best practices in VLAN design？（）
    A

    Routing should occur at the access layer ifvoice VLANs are utilized. Otherwise， routing should occur at the distribution layer.

    B

    Routing should always be performed at the distribution layer.

    C

    VLANs should be localized to a switch.

    D

    VLANs should be localized to a single switch unlessvoice VLANs are being utilized.

    E

    Routing should not be performed between VLANs located on separate switches.


    正确答案： D,E
    解析： 暂无解析

  • 第13题：

    (ii) Determine whether your decision in (b)(i) would change if you were to use the Maximin and Minimax

    regret decision criteria. Your answer should be supported by relevant workings. (6 marks)


    正确答案：

  • 第14题：

    (ii) Briefly discuss TWO factors which could reduce the rate of return earned by the investment as per the

    results in part (a). (4 marks)


    正确答案：
    (ii) Two factors which might reduce the return earned by the investment are as follows:
    (i) Poor product quality
    The very nature of the product requires that it is of the highest quality i.e. the cakes are made for human
    consumption. Bad publicity via a ‘product recall’ could potentially have a catastrophic effect on the total sales to
    Superstores plc over the eighteen month period.
    (ii) The popularity of the Mighty Ben character
    There is always the risk that the popularity of the character upon which the product is based will diminish with a
    resultant impact on sales volumes achieved. In this regard it would be advisable to attempt to negotiate with
    Superstores plc in order to minimise potential future losses.

  • 第15题：

    (ii) Recommend which of the refrigeration systems should be purchased. You should state your reasons

    which must be supported by relevant calculations. (3 marks)


    正确答案：

  • 第16题：

    (ii) Service quality; and (7 marks)


    正确答案：
    (ii) Quality of service is the totality of features and characteristics of the service package that bear upon its ability to satisfy
    client needs. To some extent the number of complaints and the need to provide non-chargeable consultations associated
    with the remedying of those complaints is indicative of a service quality problem that must be addressed. Hence this
    problem needs to be investigated at the earliest opportunity. Assuming consultants could have otherwise undertaken
    chargeable work, the revenue foregone as a consequence of the remedial consultations relating to commercial work
    amounted to (180 x ￡1500) = ￡27,000. Client complaints received by HLP during the year amounted to 1·24% of
    consultations undertaken by commercial advisors whereas none were budgeted. In contrast, competitor MAS received
    135 complaints which coincided with the number of non-chargeable consultations undertaken by them. This may
    indicate that MAS operate a policy of a remedial consultation in respect of all complaints received from clients.
    With regard to the number of on-time consultations, HLP only achieved an on-time consultation percentage of 94·4%
    which is far inferior to that of 99% achieved by competitor MAS. Also, HLP re-scheduled the appointment times of
    1,620 (3%) of its total consultations whereas competitor MAS only re-scheduled 0·5% of its consultation times. The
    percentage number of successful consultations provided by HLP and MAS was 85% and 95% respectively which
    indicates that competitor MAS possesses a superior skills-base to that of HLP.
    The most alarming statistic lies in the fact that HLP was subject to three successful legal actions for negligence. This
    may not only account for the 150% increase in the cost of professional indemnity insurance premiums but may also
    result in a loss of client confidence and precipitate a considerable fall in future levels of business should the claims
    become much publicised.

  • 第17题：

    3 The Global Hotel Group (GHG) operates hotels in most of the developed countries throughout the world. The directors

    of GHG are committed to a policy of achieving ‘growth’ in terms of geographical coverage and are now considering

    building and operating another hotel in Tomorrowland. Tomorrowland is a developing country which is situated 3,000

    kilometres from the country in which GHG’s nearest hotel is located.

    The managing director of GHG recently attended a seminar on ‘the use of strategic and economic information in

    planning organisational performance’.

    He has called a board meeting to discuss the strategic and economic factors which should be considered before a

    decision is made to build the hotel in Tomorrowland.

    Required:

    (a) Discuss the strategic and economic factors which should be considered before a decision is made to build

    the hotel. (14 marks)


    正确答案：
    (a) Of vital importance is the need for reliable information on which to base the decision regarding the potential investment within
    Tomorrowland, since the lack of such information will only serve to increase the risk profile of GHG.
    The strategic factors that ought to be considered prior to a decision being made to build and operate a hotel in Tomorrowland
    are as follows:
    The competition
    The key notion here is that of the position of GHG relative to its competitors who may have a presence or intend to have a
    presence in Tomorrowland. The strategic management accounting system should be capable of coping with changes that can
    and will inevitably occur in a dynamic business environment. Hence it is crucial that changes such as, the emergence of a
    new competitor, are detected and reflected within strategic plans at the earliest opportunity.
    The government
    The attitude of the government of Tomorrowland towards foreign organisations requires careful consideration as inevitably the
    government will be the country’s largest supplier, employer, customer and investor. The directors need to recognise that the
    political environment of Tomorrowland could change dramatically with a change in the national government.
    Planning and control of operations within Tomorrowland
    Planning and control of operations within Tomorrowland will inevitably be more difficult as GHG might not possess sufficient
    knowledge of the business environment within Tomorrowland. Indeed their nearest hotel is at least 3,000 kilometres away.
    It is vital the GHG gain such knowledge prior to commencing operations within Tomorrowland in order to avoid undue risks.
    The sociological–cultural constraints
    While it is generally recognised that there is a growing acceptability of international brands this might not be the case with
    regard to Tomorrowland. The attitude towards work, managers (especially foreign nationals) and capitalist organisations could
    severely impact on the degree of success achieved within Tomorrowland. In this respect it is vital that consideration is given
    to recognition of the relationships in economic life including demand, price, wages, training, and rates of labour turnover and
    absenteeism.
    Resource utilisation
    A primary consideration relates to whether or not to use local labour in the construction of the hotel. The perceived
    ‘remoteness’ of Tomorrowland might make it an unattractive proposition for current employees of GHG, thereby presenting the
    directors of GHG with a significant problem.
    Communication
    Consideration needs to be given to the communication problems that arise between different countries and in this respect
    Tomorrowland is probably no exception. Language barriers will inevitably exist and this needs to be addressed at the earliest
    opportunity to minimise any risks to GHG.
    The economic factors that ought to be considered prior to a decision being made to build and operate a hotel in Tomorrowland
    are as follows:
    Resource availability
    The hotel should be designed having given due consideration to the prevailing climatic conditions within Tomorrowland which
    might necessitate the use of specific types of building materials. It might well be the case that such building materials are not
    available locally, or are in such scarce supply in which case local supply would prove to be uneconomic.
    Another consideration relates to local labour being available and reliable in terms of its quality.
    Currency stability/restrictions
    The stability of the currency within Tomorrowland assumes critical significance because profit repatriation is problematic in
    situations where those profits are made in an unstable currency or one that is likely to depreciate against the home currency,
    thereby precipitating sizeable losses on exchange. Any currency restrictions need to be given careful consideration. For
    example, it might be the case that hotel guests would be prohibited from paying accommodation bills in a foreign currency
    which would be problematic if the local currency was weak.
    Legislation
    All local and International legislation should be given careful consideration. It might be the case that local legislation via
    various licences or legal requirements favour local hotels.
    Demand
    The potential demand within Tomorrowland will be linked to the local economy. It is a developing economy and this may
    bode well for GHG. However, again the need for reliable information about the size of the market, the extent of competition,
    likely future trends etc is of fundamental importance.
    Financing
    An important decision lies in the availability and associated costs of financing in Tomorrowland which might not have mature
    enough capital markets due to its developmental state. Hence GHG might need to finance using alternative currencies.
    Note: Other relevant comments would be acceptable.

  • 第18题：

    (ii) The sales director has suggested to Damian, that to encourage the salesmen to accept the new arrangement,

    the company should increase the value of the accessories of their own choice that can be fitted to the low

    emission cars.

    State, giving reasons, whether or not Damian should implement the sales director’s suggestion.

    (2 marks)


    正确答案：
    (ii) Damian should not agree to the sales director’s suggestion. The salesmen will each make a significant annual income
    tax saving under the proposal, whereas the company will also be offset (at least partly) by the reduction in the dealer’s
    bulk discount. Further, 100% first year allowance tax incentive for low emission cars is not guaranteed beyond 31 March
    2008, and it is unlikely that any change in policy with regards to the provision of additional accessories will, once
    implemented, be easily reversible.

  • 第19题：

    (ii) The answers to any questions that the potential investors may raise in connection with the maximum

    possible investment, borrowing to finance the subscription and the implications of selling the shares.

    (7 marks)

    Note: you should assume that Vostok Ltd and its trade qualify for the purposes of the enterprise investment

    scheme and you are not required to list the conditions that need to be satisfied by the company, its

    shares or its business activities.


    正确答案：
    (ii) Answers to questions from potential investors
    Maximum investment
    – For the relief to be available, a shareholder (together with spouse and children) cannot own more than 30% of the
    company. Accordingly, the maximum investment by a single subscriber will be ￡315,000 (15,000 x ￡21).
    Borrowing to finance the purchase
    – There would normally be tax relief for the interest paid on a loan taken out to acquire shares in a close company
    such as Vostok Ltd. However, this relief is not available when the shares qualify for relief under the enterprise
    investment scheme.
    Implications of a subscriber selling the shares in Vostok Ltd
    – The income tax relief will be withdrawn if the shares in Vostok Ltd are sold within three years of subscription.
    – Any profit arising on the sale of the shares in Vostok Ltd on which income tax relief has been given will be exempt
    from capital gains tax provided the shares have been held for three years.
    – Any capital loss arising on the sale of the shares will be allowable regardless of how long the shares have been
    held. However, the loss will be reduced by the amount of income tax relief obtained in respect of the investment.
    The loss may be used to reduce the investor’s taxable income, and hence his income tax liability, for the tax year
    of loss and/or the preceding tax year.
    – Any gain deferred at the time of subscription will become chargeable in the year in which the shares in Vostok Ltd
    are sold.

  • 第20题：

    (b) Explain the matters that should be considered when planning the nature and scope of the examination of

    Cusiter Co’s forecast balance sheet and income statement as prepared for the bank. (7 marks)


    正确答案：
    (b) Matters to be considered
    Tutorial note: Candidates at this level must appreciate that the matters to be considered when planning the nature and
    scope of the examination are not the same matters to be considered when deciding whether or not to accept an
    engagement. The scenario clearly indicates that the assignment is being undertaken by the current auditor rendering any
    ‘pre-engagement’/‘professional etiquette’ considerations irrelevant to answering this question.
    This PFI has been prepared to show an external user, the bank, the financial consequences of Cusiter’s plans to help the bank
    in making an investment decision. If Cusiter is successful in its loan application the PFI provides a management tool against
    which the results of investing in the plant and equipment can be measured.
    The PFI is unpublished rather than published. That is, it is prepared at the specific request of a third party, the bank. It will
    not be published to users of financial information in general.
    The auditor’s report on the PFI will provide only negative assurance as to whether the assumptions provide a reasonable basis
    for the PFI and an opinion whether the PFI is:
    ■ properly prepared on the basis of the assumptions; and
    ■ presented in accordance with the relevant financial reporting framework.
    The nature of the engagement is an examination to obtain evidence concerning:
    ■ the reasonableness and consistency of assumptions made;
    ■ proper preparation (on the basis of stated assumptions); and
    ■ consistent presentation (with historical financial statements, using appropriate accounting principles).
    Such an examination is likely to take the form. of inquiry, analytical procedures and corroboration.
    The period of time covered by the prospective financial information is two years. The assumptions for 2008 are likely to be
    more speculative than for 2007, particularly in relation to the impact on earnings, etc of the investment in new plant and
    equipment.
    The forecast for the year to 31 December 2007 includes an element of historical financial information (because only part of
    this period is in the future) hence actual evidence should be available to verify the first three months of the forecast (possibly
    more since another three-month period will expire at the end of the month).
    Cusiter management’s previous experience in preparing PFI will be relevant. For example, in making accounting estimates
    (e.g. for provisions, impairment losses, etc) or preparing cash flow forecasts (e.g. in support of the going concern assertion).
    The basis of preparation of the forecast. For example, the extent to which it comprises:
    ■ proforma financial information (i.e. historical financial information adjusted for the effects of the planned loan and capital
    expenditure transaction);
    ■ new information and assumptions about future performance (e.g. the operating capacity of the new equipment, sales
    generated, etc).
    The nature and scope of any standards/guidelines under which the PFI has been prepared is likely to assist the auditor in
    discharging their responsibilities to report on it. Also, ISAE 3400 The Examination of Prospective Financial Information,
    establishes standards and provides guidance on engagements to examine and report on PFI including examination
    procedures.
    The planned nature and scope of the examination is likely to take into account the time and fee budgets for the assignments
    as adjusted for any ‘overlap’ with audit work. For example, the examination of the PFI is likely to draw on the auditor’s
    knowledge of the business obtained in auditing the financial statements to 31 December 2006. Analytical procedures carried
    out in respect of the PFI may provide evidence relevant to the 31 December 2007 audit.

  • 第21题：

    (ii) From the information provided above, recommend the matters which should be included as ‘findings

    from the audit’ in your report to those charged with governance, and explain the reason for their

    inclusion. (7 marks)


    正确答案：
    (ii) Control weakness
    ISA 260 contains guidance on the type of issues that should be communicated. One of the matters identified is a control
    weakness in the capital expenditure transaction cycle. The assets for which no authorisation was obtained amount to
    0·3% of total assets (225,000/78 million x 100%), which is clearly immaterial. However, regardless of materiality, the
    auditor should ensure that the weakness is brought to the attention of the management, with a clear indication of the
    implication of the weakness, and recommendations as to how the control weakness should be eliminated.
    The auditor is providing information to help those charged with governance improve the internal systems and controls
    and ultimately reduce business risk. In this case there is a high risk of fraud, as the lack of authorisation for purchase
    of office equipment could allow expenditure on assets not used for bona fide business purposes.
    Disagreement with accounting treatment of brand
    Audit procedures have revealed a breach of IAS 38 Intangible Assets, in which internally generated brand names are
    specifically prohibited from being recognised. Blod Co has recognised an internally generated brand name which is
    material to the statement of financial position (balance sheet) as it represents 12·8% of total assets (10/78 x 100%).
    The statement of financial position (balance sheet) therefore contains a material misstatement.
    The report to those charged with governance should clearly explain the rules on recognition of internally generated brand
    names, to ensure that the management has all relevant technical facts available. In the report the auditors should
    request that the financial statements be corrected, and clarify that if the brand is not derecognised, then the audit opinion
    will be qualified on the grounds of a material disagreement – an ‘except for’ opinion would be provided. Once the breach
    of IAS 38 is made clear to the management in the report, they then have the opportunity to discuss the matter and
    decide whether to amend the financial statements, thereby avoiding a qualified audit opinion.
    Audit inefficiencies
    Documentation relating to inventories was not always made readily available to the auditors. This seems to be due to
    poor administration by the client rather than a deliberate attempt to conceal information. The report should contain a
    brief description of the problems encountered by the audit team. The management should be made aware that
    significant delay to the receipt of necessary paperwork can cause inefficiencies in the audit process. This may seem a
    relatively trivial issue, but it could lead to an increase in audit fee. Management should react to these comments by
    ensuring as far as possible that all requested documentation is made available to the auditors in a timely fashion.

  • 第22题：

    You need to design the VLAN scheme for the Company network. Which two statements are true  about best practices in VLAN design？（）

    • A、Routing should occur at the access layer ifvoice VLANs are utilized. Otherwise， routing should occur at the distribution layer.
    • B、Routing should always be performed at the distribution layer.
    • C、VLANs should be localized to a switch.
    • D、VLANs should be localized to a single switch unlessvoice VLANs are being utilized.
    • E、Routing should not be performed between VLANs located on separate switches.

    正确答案:B,C

  • 第23题：

    问答题
    Practice 3　　You should spend about 40 minutes on this task.　　Write about the following topic:　　Happiness is considered very important in life. Why is it difficult to define? What factors are important in achieving happiness?　　You should write at least 250 words.

    正确答案： 【参考范文】
    Throughout the history of human being, people are always pursuing happiness while nobody can give a definition nor can a consensus be achieved. Generally, happiness consists of two levels: material level and spiritual level. As far as I am concerned, spiritual happiness can bring people with greater satisfaction.
    To begin with, being happy is not a mood under certain circumstances, but a person with a certain set of attitudes. It is difficult for anyone to get what he wants without a great deal of effort. After making great and arduous effort, even if the target is achieved as expectation, there is nothing left but suffering and pain, because he amplifies the efforts rather than emphasizes the harvests. To reach the happiness they seek, however, the only thing people should do is to change their attitude toward happiness, and the way they look at the world around them.
    Moreover, happiness is not what people are born with but what people take action to get. Many people seek their unique happiness through imagination and daydreams. Obviously, everyone fantasies sometimes. But, without actions, no one can come close to finding the happiness he seeks. Happiness and bliss cannot be found merely through unrealistic envision, but must be sought through actions, through doing.
    To sum up, although we say that happiness is rooted in optimistic attitudes, it can never be achieved without any effort. It arises spontaneously from within as small goals are reached.
    解析： 暂无解析

相关内容