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Chuks Roberts Plc (CRP) operates as an auto-parts manufacturing company in Nigeria with headquarters in Lagos. CRP plans to manufacture drones for parcel distribution across Africa and has acquired Zaka Roberts Limited (ZRL), a South African company based in Johannesburg, to bring this plan to fruition.
Zaka previously specialized in manufacturing computer-controlled equipment for laboratories and other industries in Africa and the Middle East. The company was owned by five directors/shareholders who accepted CRP’s offer on February 1, 2016, to purchase Zaka’s manufacturing equipment, technology (patent-protected), Cape Town factory, and Johannesburg head office for US$450 million, representing 75% of Zaka’s value.
Effective March 31, 2016, Zaka ceased manufacturing, making most employees redundant except for a select few in marketing, accounts, and administration, with one month’s notice. The restructured entity, now named Chuks Zaka Limited (CZL), will operate as a marketing arm selling CRP’s drones in the South African region, with CRP holding a 55% stake.
Your firm has been CRP’s external auditor and is now engaged to audit CZL.
Required:
a. Analyse and evaluate the business risks that would be assessed by the management of CZL. (6 Marks)
b. Analyse and evaluate the business risks that would be assessed by the directors of CRP.
(6 Marks)
c. Assess and advise on the financial statements’ risks to be considered in planning the audit of CZL for the year ended December 31, 2016.
(8 Marks)
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The world in which businesses operate has become increasingly uncertain. By planning and identifying future risks and opportunities, businesses can act immediately to help create the most favourable future outcome and achieve goals and objectives.
a. State FIVE reasons for planning. (5 Marks)
b. Explain briefly THREE types of planning, considering time horizon. (15 Marks)
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Which of the following is NOT a purpose of budgeting?
A. To coordinate the actions of all the different parts of the organization
B. To communicate the company plans to individuals
C. To motivate managers and employees
D. To ensure that planning is linked to the long-term objectives
E. To convert short-term plans into more detailed long-term plans
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Which of the following is NOT an element involved in decision making, planning and control process?
A. Identifying the objectives that will guide the decision
B. Search for a range of possible courses of action to achieve the objectives
C. Select an appropriate alternative course of action to achieve the objectives
D. Implement the decisions as part of planning and budgeting process
E. Maximise shareholders’ value
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ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300 – Planning an Audit of Financial Statements requires that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.
Required:
i) Distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The Management Accountant plays an important role in the modern business environment, and his/her activities may be categorized as providing information under the key headings of planning, control, and decision making.
You have just been appointed to a new role as Management Accountant in Akwaba Ltd, a large engineering company producing a wide range of parts for the automobile industry. This new role has been created following a majority decision of the Board of Directors based on the advice of the company’s auditors. However, the Managing Director comes from a marketing background and does not understand why the company needs another accountant as there is already a Financial Accountant employed on a full-time basis. She voted against the creation of the new position and considers the cost of your remuneration to be an unwelcome burden which will only serve to reduce the company’s reported profits. According to her, the equation Y = a – bx which management accountants always use is not relevant in the modern-day business environment.
You are aware of the strong opinion of the Managing Director, and as your first task, you decide to attempt to convince her of the importance of Management Accounting in the modern business environment and also suggest some ways that you can ensure your future role in Akwaba Ltd is financially viable.
Required:
Prepare a Memorandum to the Managing Director in which you address her concerns using the following guidelines:
i) Distinguish clearly between Financial Accounting and Management Accounting under any FOUR different headings. (6 marks)
ii) For each of the THREE key headings of planning, control, and decision making, outline one Management Accounting technique and how it would lead to stronger commercial success for the company. (6 marks)
iii) Identify any THREE qualitative (non-financial) issues that you should consider as a Management Accountant when providing information for decision making in Akwaba Ltd. (2 marks)
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a) You are the manager in Dee Kay Company, a firm of Chartered Accountants. You have just attended a monthly meeting of audit partners and managers at which client-related matters were discussed. Information relating to one client which was discussed at the meeting is given below.
Tap Co Tap Co is a clothing manufacturer, which has recently expanded its operations overseas. To manage exposure to cash flows denominated in foreign currencies, the company has set up a treasury management function, which is responsible for entering into hedge transactions such as forward exchange contracts. These transactions are likely to be material to the financial statements. The audit partner is about to commence planning the audit for the year ending 31 July 2014.
Required:
Discuss why the audit of financial instruments is particularly challenging, and explain the matters to be considered in planning the audit of Tap Co’s forward exchange contracts. (10 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Chuks Roberts Plc (CRP) operates as an auto-parts manufacturing company in Nigeria with headquarters in Lagos. CRP plans to manufacture drones for parcel distribution across Africa and has acquired Zaka Roberts Limited (ZRL), a South African company based in Johannesburg, to bring this plan to fruition.
Zaka previously specialized in manufacturing computer-controlled equipment for laboratories and other industries in Africa and the Middle East. The company was owned by five directors/shareholders who accepted CRP’s offer on February 1, 2016, to purchase Zaka’s manufacturing equipment, technology (patent-protected), Cape Town factory, and Johannesburg head office for US$450 million, representing 75% of Zaka’s value.
Effective March 31, 2016, Zaka ceased manufacturing, making most employees redundant except for a select few in marketing, accounts, and administration, with one month’s notice. The restructured entity, now named Chuks Zaka Limited (CZL), will operate as a marketing arm selling CRP’s drones in the South African region, with CRP holding a 55% stake.
Your firm has been CRP’s external auditor and is now engaged to audit CZL.
Required:
a. Analyse and evaluate the business risks that would be assessed by the management of CZL. (6 Marks)
b. Analyse and evaluate the business risks that would be assessed by the directors of CRP.
(6 Marks)
c. Assess and advise on the financial statements’ risks to be considered in planning the audit of CZL for the year ended December 31, 2016.
(8 Marks)
Find Related Questions by Tags, levels, etc.
The world in which businesses operate has become increasingly uncertain. By planning and identifying future risks and opportunities, businesses can act immediately to help create the most favourable future outcome and achieve goals and objectives.
a. State FIVE reasons for planning. (5 Marks)
b. Explain briefly THREE types of planning, considering time horizon. (15 Marks)
Find Related Questions by Tags, levels, etc.
Which of the following is NOT a purpose of budgeting?
A. To coordinate the actions of all the different parts of the organization
B. To communicate the company plans to individuals
C. To motivate managers and employees
D. To ensure that planning is linked to the long-term objectives
E. To convert short-term plans into more detailed long-term plans
Find Related Questions by Tags, levels, etc.
Which of the following is NOT an element involved in decision making, planning and control process?
A. Identifying the objectives that will guide the decision
B. Search for a range of possible courses of action to achieve the objectives
C. Select an appropriate alternative course of action to achieve the objectives
D. Implement the decisions as part of planning and budgeting process
E. Maximise shareholders’ value
Find Related Questions by Tags, levels, etc.
ISA 200: Overall Objectives of Independent Auditor and the Conduct of an Audit and ISA 300 – Planning an Audit of Financial Statements requires that auditors should plan in order to conduct the audit in an effective, efficient, and timely manner. The plan should include an overall audit strategy and a detailed audit plan.
Required:
i) Distinguish between audit strategy and audit plan. (5 marks)
ii) Identify the contents of audit strategy and audit plan. (10 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The Management Accountant plays an important role in the modern business environment, and his/her activities may be categorized as providing information under the key headings of planning, control, and decision making.
You have just been appointed to a new role as Management Accountant in Akwaba Ltd, a large engineering company producing a wide range of parts for the automobile industry. This new role has been created following a majority decision of the Board of Directors based on the advice of the company’s auditors. However, the Managing Director comes from a marketing background and does not understand why the company needs another accountant as there is already a Financial Accountant employed on a full-time basis. She voted against the creation of the new position and considers the cost of your remuneration to be an unwelcome burden which will only serve to reduce the company’s reported profits. According to her, the equation Y = a – bx which management accountants always use is not relevant in the modern-day business environment.
You are aware of the strong opinion of the Managing Director, and as your first task, you decide to attempt to convince her of the importance of Management Accounting in the modern business environment and also suggest some ways that you can ensure your future role in Akwaba Ltd is financially viable.
Required:
Prepare a Memorandum to the Managing Director in which you address her concerns using the following guidelines:
i) Distinguish clearly between Financial Accounting and Management Accounting under any FOUR different headings. (6 marks)
ii) For each of the THREE key headings of planning, control, and decision making, outline one Management Accounting technique and how it would lead to stronger commercial success for the company. (6 marks)
iii) Identify any THREE qualitative (non-financial) issues that you should consider as a Management Accountant when providing information for decision making in Akwaba Ltd. (2 marks)
Find Related Questions by Tags, levels, etc.
a) You are the manager in Dee Kay Company, a firm of Chartered Accountants. You have just attended a monthly meeting of audit partners and managers at which client-related matters were discussed. Information relating to one client which was discussed at the meeting is given below.
Tap Co Tap Co is a clothing manufacturer, which has recently expanded its operations overseas. To manage exposure to cash flows denominated in foreign currencies, the company has set up a treasury management function, which is responsible for entering into hedge transactions such as forward exchange contracts. These transactions are likely to be material to the financial statements. The audit partner is about to commence planning the audit for the year ending 31 July 2014.
Required:
Discuss why the audit of financial instruments is particularly challenging, and explain the matters to be considered in planning the audit of Tap Co’s forward exchange contracts. (10 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
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