ACCA paper f8 auditiing and assurance F8AA(INT)MT1A qs j08

Monitoring Test MT1A Audit and Assurance International F8AA-MT1A-X08-Q Time allowed 1.5 hours All FOUR questions are compulsory and MUST be attempted.. 1 You are an audit partner in

Monitoring Test MT1A

Audit and Assurance

(International)

F8AA-MT1A-X08-Q

Time allowed 1.5 hours

All FOUR questions are compulsory and MUST be attempted

Do NOT open this paper until instructed by the supervisor

1 You are an audit partner in Future & Co, a firm of certified accountants You have recently

been approached by the directors of Clover, a multi-national listed company, who wish to appoint your firm as auditors of the company The existing auditors, Past & Co, are resigning

at the request of the directors

Required:

Describe the ethical and practical matters which you would consider prior to accepting appointment as external auditor of Clover

(9 marks)

2 Your firm has recently been appointed as auditor of Edco, a privately owned hotel, and you

are to be the senior in charge of the audit Your firm is not familiar with the hotel industry The hotel has:

(1) bedrooms, 25 of which are single

(2) conference centre facilities

(3) two restaurants and a bar, which are also open to non-residents

A variety of discounts are offered to customers depending on the type of customer (eg conference, business or private) and the time of week or year The management has sought to increase the room occupancy of the hotel in recent years by offering weekend discounts to tourists

The hotel has recently experienced difficulty in retaining staff and, consequently, both staff turnover and the numbers of part-time staff employed are high

All bookings and accounting transactions are maintained on two microcomputers, one of which is kept in reception and the other in the administration office The bar and restaurants record transactions on electronic tills

Required:

(20 marks)

3 You are the audit client partner for Excelm Plc, a listed company A requirement of the

legislative environment under which the company operates, is that all listed companies must have an operative audit committee of at least three independent members Excelm’s audit committee has been in operation for three years

Required:

(12 marks)

4 “When obtaining audit evidence from substantive procedures, the auditor should consider the

sufficiency and appropriateness of audit evidence from such procedures together with any evidence from tests of control to support financial statement assertions ”

ISA 500 Audit evidence

Required:

Discuss the extent to which each of the following sources of audit evidence is sufficient and appropriate:

into a bank account)

(9 marks)

End of Question Paper