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ACCA_F4_Revision_Course_Mock_J10_-_QUESTIONS[1]

ACCAPape r F4 (ENG)Corporat e an d Busines s La wRevisio n Cours e Moc k Examinatio n Jun e 2010 Questio n Pape rAL L question s ar e compulsor y an d MUS T b e attempte dTim e Allowe d 15 minute s Readin g an d plannin g 3 hour s Writin gD O NO T OPE N THI S PAPE R UNTI L YO U AR E READ Y T O STAR T UNDE REXAMINATIO N CONDITION S©Debbi e Crossman, Apri l 2010 Al l right s reserved. N o par t o f thi s publicatio n ma y b e reproduced, store d i n aretrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording or otherwise, without the prior writtenpermissio n o f Debbi e Crossman.AL L TE N question s ar e compulsor y an d MUS T b e attempte d1 (a) Explai n th e jurisdictio n o f th e Count y Cour t and th e Hig h Cour t i n th e syste m o fcivi l justice. (8 marks)(b) Briefl y explai n wher e appeal s fro m th e decision s o f th e Count y Cour t an d th e Hig hCour t ar e heard. (2 marks)(10 marks)2 (a) Distinguis h betwee n a condition, a warrant y an d a n innominat e term. (5 marks)(b) Explai n th e practica limportanc e o f th e distinction. (5marks) (10 marks)3 I n relatio n t o th e dismissa l o f a n employee, explain:(a) th e ground s o n whic h dismissa l ma y b e fair; (5 marks)(b) th e ground s o n whic h dismissa l wil l b e automaticall y unfair.(5 marks)(10 marks)4 Explai n th e concep t o f ‘dut y o f care’i n th e contex t o f professiona l negligence.(10 marks)5 Explai n th e following i n relatio n t o compan y law:(a) promoter; (5 marks)(b) th e trading certificate. (5 marks) (10 marks)6 I n th e contex t o f corporat e governanc e explai n th e rol e o f th e compan y secretar y o f apubli c company, paying particula r attentio n to:(a) hi s appointment; (4 marks)(b) hi s duties; (2 marks)(c) hi s powe r t o bin d th e compan y i n contract. (4 marks) (10 marks)7 I n relatio n t o compan y la w and, wher e relevant, th e Combined Cod e o n Corporat eGovernanc e explain:(a) th e meaning o f director; (2 marks)(b) th e meaning o f shado w director; (3 marks)(c) th e rol e o f nonexecutiv e director; (3 marks)(d) th e rol e o f executiv e director. (2 marks) (10 marks)8 Angi e advertise d a photocopie r i n a trad e journa l fo r £15,000. Bett y wrot e t o Angi eofferin g t o bu y i t fo r £10,000. Angi e replie d b y retur n o f pos t sayin g sh e woul d accep t £13,000. Whe n sh e hear d nothin g furthe r fro m Betty, Angi e wrot e agai n sayin g sh e woul d accep t £10,000. Bett y say s sh e n o longe r want s t o bu y th e photocopier.Angi e wrot e t o Caro l offerin g fo r sal e a lapto p fo r £500. Th e mornin g tha t sh e receive d th e lette r Caro l wrot e t o Angi e agreein g t o bu y a t th e askin g price. Afte r sh e ha d poste d th e letter, bu t befor e i t wa s delivered, Caro l change d he r min d an d sen t Angi e a fa x askin g he r t o ignor e th e lette r whe n i t arrived.Required:Advis e Angi e a s t o whethe r bindin g contract s exis t betwee n hersel f and:(a) Betty; (6 marks)(b) Carol. (4 marks) (10 marks)9 I n 1998 Ed, Fahi m an d Gig i se t u p busines s i n partnership. The y ar e no w considerin gincorporatin g thei r busines s a s a privat e limite d compan y i n whic h the y wil l b e th e onl y shareholder s an d directors.Required:(a) Advis e the m wha t advantage s wil l accru e fro m incorporatio n a s a privat e limite d company. (8 marks)(b) Woul d ther e b e an y furthe r advantage s i f the y wer e instead t o for m alimited liabilit y partnership? (2 marks)(10 marks)10 Hop e own s 10,000 ordinar y £1 share s i n Indee p Ltd, whic h sh e purchase d i n 2000. A t th e tim e sh e wa sallotte d th e share s sh e wa s onl y calle d upo n t o pa y 75p pe r share. N o furthe r call s hav e ye t bee n made.I n 2004 Hop e mad e a loa n o f £10,000 t o th e compan y t o financ e furthe r expansio n o f th e business. Th edebentur e wa s secure d b y wa y o f a fixe d charg e o n th e company’s freehol d warehous e premises. Th e followin g year, 2005, sh e als o mad e a furthe r loa n o f £2,000 an d thi s tim e th e debentur e wa s secure d b y wa y o f floatin g charg e ove r th e company’s stoc k i n trade. B y a n oversight, thi s charg e wa s no t registere da t Companie s House.I n 2009 th e compan y realise d tha t i t neede d furthe r funds. S o i n orde r t o persuad e Hop e t o provid e th eneede d mone y i t tol d he r tha t i t woul d issu e he r 10,000 mor e £1 shares, full y paid, bu t sh e nee d onl y pa y50 penc e pe r share. Hop e agree d t o thi s an d too k th e shares.Unfortunatel y th e injectio n o f cas h di d no t sav e Indee p Lt d an d i t recentl y wen t int o insolven t liquidation.Required:Advis e Hop e a s t o he r right s and liabilitie s i n respec t o f he r share san d he r debentures. (10 marks)。

ACCA p3_2010_12月_问题que

Professional Level – Essentials Module The Association of Chartered Certiﬁ ed Accountants Business AnalysisWednesday 15 December 2010Time allowedReading and planning: 15 minutesWriting: 3 hoursThis paper is divided into two sections:Section A – This ONE question is compulsory and MUST be attemptedSection B – TWO questions ONLY to be attemptedDo NOT open this paper until instructed by the supervisor.During reading and planning time only the question paper maybe annotated. You must NOT write in your answer booklet untilinstructed by the supervisor.This question paper must not be removed from the examination hall.P a p e r P 3This is a blank page.The question paper begins on page 3.2Section A – This ONE question is compulsory and MUST be attemptedThe following information should be used when attempting question 11IntroductionShoal plc is a well-known corporate organisation in the ﬁ sh industry. It owns 14 companies concerned with ﬁ shing and related industries.This scenario focuses on three of these companies:ShoalFish Ltd – a ﬁ shing ﬂ eet operating in the western oceansShoalPro Ltd – a company concerned with processing and canning ﬁ shShoalFarm Ltd – a company with saltwater ﬁ sh farms.Shoal plc is also ﬁ nalising the purchase of the Captain Haddock chain of ﬁ sh restaurants.ShoalFishShoal plc formed ShoalFish in 2002 when it bought three small ﬁ shing ﬂ eets and consolidated them into one ﬂ eet.The primary objective of the acquisition was to secure supplies for ShoalPro. 40% of the ﬁsh caught by ShoalFish are currently processed in the ShoalPro factories. The rest are sold in wholesale ﬁ sh markets. ShoalFish has recorded modest proﬁts sinc e its formation but it is operating in a c hallenging market-plac e. The western oc eans where it operates have suffered from many years of over-ﬁshing and the government has rec ently introduc ed quotas in an attempt to conserve ﬁ sh stocks.ShoalFish has 35 boats and this makes it the sixth largest ﬂ eet in the western oceans. Almost half of the total number of boats operating in the western oceans are individually owned and independently operated by the boat’s captain.Recent information for ShoalFish is given in Figure 1.ShoalProShoalPro was acquired in 1992 when Shoal plc bought the assets of the T revarez Canning and Processing Company.Just after the ac quisition of the c ompany, the government dec lared the area around T revarez a ‘zone of industrial assistance’. Grants were made available to develop industry in an attempt to address the economic decline and high unemployment of the area. ShoalPro beneﬁted from these grants, developing a major ﬁsh processing and canning capability in the area. However, despite this initiative and investment, unemployment in the area still remains above the average for the country as a whole.ShoalPro’s modern fac ilities and relatively low c osts have made it attrac tive to many ﬁshing c ompanies. The ﬁsh received from ShoalFish now accounts for a declining percentage of the total amount of ﬁ sh processed and canned in its factories in the T revarez area. Recent information for ShoalPro is given in Figure 1.ShoalFarmShoalFarm was acquired in 2004 as a response by Shoal plc to the declining ﬁ sh stocks in the western oceans. It owns and operates saltwater ﬁsh farms. These are in areas of the ocean close to land where ﬁsh are protected from both ﬁ shermen and natural prey, such as sea birds. Fish stocks can be built up quickly and then harvested by the ﬁ sh farm owner. Shoal plc originally saw this acquisition as a way of maintaining supply to ShoalPro.Operating costs at ShoalFarm have been higher than expected and securing areas for new ﬁ sh farms has been difﬁ cult and has required greater investment than expected. Recent information for ShoalFarm is given in Figure 1.3[P.T.O.All ﬁ gures in $mShoalFish 2007 2008 2009T urnover of market sector 200·00 198·50 190·00T urnover of ShoalFish 24·00 23·50 21·50proﬁt 1·20 1·10 1·05GrossShoalPro 2007 2008 2009T urnover of market sector 40·00 40·10 40·80T urnover of ShoalPro 16·00 16·20 16·50Grossproﬁt 1·60 1·65 1·75ShoalFarm 2007 2008 2009T urnover of market sector 10·00 11·00 12·00T urnover of ShoalFarm 1·00 1·10 1·12proﬁt 0·14 0·14 0·15GrossFigure 1: Financial data on individual companies 2007–2009Captain HaddockThe Captain Haddock chain of restaurants was founded in 1992 by John Dory. It currently operates one hundred and thirty restaurants in the country serving high quality ﬁ sh meals. Much of Captain Haddock’s success has been built on the quality of its food and service. Captain Haddock has a tradition of recruiting staff directly from schools and universities and providing them with excellent training in the Captain Haddock academy. The academy ensures that employees are aware of the ‘Captain Haddock way’ and is dedicated to the continuation of the quality service and practices developed by John Dory when he launched the ﬁ rst restaurant. All management posts are ﬁ lled by recruiting from within the company, and all members of the Captain Haddock board originally joined the company as trainees. In 1999 the Prime Minister of the country identiﬁ ed Captain Haddock academy as an example of high quality in-service training. In 2000, Captain Haddock became one of the thirty best regarded brands in the country.In the past few years, the ﬁ nancial performance of Captain Haddock has declined signiﬁ cantly (see Figure 2) and the company has had difﬁculty in meeting its bank covenants. This decline is partly due to economic recession in the country and partly due to a disastrous diversiﬁ cation into commercial real estate and currency dealing. The chairman and managing director of the company both resigned nine months ago as a result of concern over the breaking of banking covenants and shareholder criticism of the diversiﬁcation policy. Some of the real estate bought during this period is still owned by the company. In the last nine months the company has been run by an interim management team, whilst looking for prospective buyers. At restaurant level, employee performance still remains relatively good and the public still highly rate the brand. However, at a recent meeting one of the employee representatives called for a management that can ‘effectively lead employees who are increasingly demoralised by the decline of the company’. Shoal plc is currently ﬁ nalising their takeover of the Captain Haddock business. The company is being bought for a notional $1 on the understanding that $15 million is invested into the company to meet short-term cash ﬂ ow problems and to improve liquidity. Shoal plc’s assessment is that there is nothing fundamentally wrong with the company and that the current ﬁ nancial situation is caused by the failed diversiﬁ cation policy and the cost of ﬁ nancing this. The gross proﬁ t margin in the sector averages 10%.Captain Haddock currently buys its ﬁ sh and ﬁ sh products from wholesalers. It is the intention of Shoal plc to look at sourcing most of the dishes and ingredients from its own companies; speciﬁ cally ShoalFish, ShoalPro and ShoalFarm. Once the takeover is complete (and this should be within the next month), Shoal plc intends to implement signiﬁ cant strategic change at Captain Haddock so that it can return to proﬁ tability as soon as possible. Shoal plc has implemented strategic change at a number of its acquisitions. The company explicitly recognises that there is no ‘one right way’ to manage change. It believes that the success of any planned change programme depends on an understanding of the context in which the change is taking place.Captain Haddock (all ﬁ gures in $m)2007 2008 2009T urnover 115·00 114·50 114·00)Gross proﬁ t (loss) 0·20 (5·10 ) (6·20Figure 2: Financial information for Captain Haddock 2007–20094Required:(a) In the context of Shoal plc’s corporate-level strategy, assess the contribution and performance of ShoalFish,ShoalPro and ShoalFarm. Your assessment should include an analysis of the position of each company in the Shoal plc portfolio. (15 marks)(b) Shoal plc explicitly recognises that there is no ‘one right way’ to manage change. It believes that the success ofany planned change programme will depend on a clear understanding of the context within which change will take place.(i) Identify and analyse, using an appropriate model, the contextual factors that will inﬂ uence how strategicchange should be managed at Captain Haddock. (13 marks)Professional marks will be awarded in part (b)(i) for the identiﬁ cation and justiﬁ cation of an appropriatemodel.(2 marks)(ii) Once the acquisition is complete, Shoal plc wish to quickly turnaround Captain Haddock and return it to proﬁ tability.Identify and analyse the main elements of strategic change required to achieve this goal. (8 marks)Professional marks will be awarded in part (b)(ii) for the cogency of the analysis and for the overallrelevance of the answer to the case study scenario.(2 marks)(c) Portfolio managers, synergy managers and parental developers are three corporate rationales for adding value.Explain each of these separate rationales for adding value and their relevance to understanding the overall corporate rationale of Shoal plc. (10 marks)(50 marks)5[P.T.O.Section B – TWO questions ONLY to be attempted2IntroductionTMP (The Management Press) is a specialist business publisher; commissioning, printing and distributing books on ﬁ nancial and business management. It is based in a small town in Arcadia, a high-cost economy, where their printing works were established ﬁ fty years ago. 60% of the company’s sales are made through bookshops in Arcadia. In these bookshops TMP’s books are displayed in a custom-built display case speciﬁcally designed for TMP. 30% of TMP’s sales are through mail order generated by full-page display advertisements in magazines and journals. Most of these sales are to customers based outside Arcadia. The ﬁ nal 10% of sales are made through a newly established website which offers a restricted range of books. These books are typically very specialised and are rarely featured in display advertising or stocked by general bookshops. The books available on the website are selected to avoid conﬂict with established supply channels. Most of the online sales are to customers based in Arcadia. High selling prices and high distribution costs makes TMP’s books expensive to buy outside Arcadia.Business changesIn the last decade costs have increased as the raw materials (particularly timber) used in book production have become dearer. Paper is extremely expensive in Arcadia and the trees used to produce it are becoming scarcer. Online book sellers have also emerged who are able to discount prices by exploiting economies of scale and eliminating bookshop costs. In Arcadia, it is estimated that three bookshops go out of business every week. Furthermore, the inﬂ uential journal ‘Management Focus’, one of the journals where TMP advertised their books, also recently ceased production. TMP itself has suffered three years of declining sales and proﬁ ts. Expenditure on marketing has been reduced signiﬁ cantly in this period and further reductions in the marketing budget are likely because of the weak ﬁ nancial position of the company.Overall, there is increasing pressure on the company to increase proﬁ t margins and sales.Despite the poor ﬁ nancial results, the directors of TMP are keen to maintain the established supply channels. One of them, the son of the founder of the company, has stated that ‘bookshops need all the help they can get and management journals are the heart of our industry’.However, the marketing director is keen for the company to re-visit its business model. He increasingly believes that TMP’s conventional approach to book production, distribution and marketing is not sustainable. He wishes to re-examine certain elements of the marketing mix in the context of the opportunities offered by e-business.A young marketing graduate has been appointed by the marketing director to develop and maintain the website.However, further development of the website has not been sanctioned by the Board. Other directors have given two main reasons for blocking further development of this site. Firstly, they believe that the company does not have sufﬁ cient expertise to continue developing and maintaining its own website. It is solely dependent on the marketing graduate. Secondly, they feel that the website will compete with the established supply channels which they are keen to preserve.However, the marketing director is convinced that investing in e-business is essential for the survival of TMP. ‘We need to consider what unique opportunities it offers for pricing the product, promoting the product, placing the product and providing physical evidence of the quality of the product. Finally, we might even re-deﬁ ne the product itself’. He feels if the company fails to grasp these opportunities, then one of its competitors will, and ‘that will be the end of us’.Required:(a) Determine the main drivers for the adoption of e-business at TMP and identify potential barriers to itsadoption. (5 marks)(b) Evaluate how e-business might help TMP exploit each of the ﬁve elements of the marketing mix (price,product, promotion, place and physical evidence) identiﬁ ed by the marketing director. (20 marks)(25 marks)6Frigate Limited is based in the country of Egdon. It imports electrical components from other countries and distributes them throughout the domestic market. The company was formed twenty years ago by Ron Frew, who now owns 80% of the shares. A further 10% of the company is owned by his wife and 5% each by his two daughters.Although he has never been in the navy, Ron is obsessed by ships, sailing and naval history. He is known to everyone as ‘The Commander’ and this is how he expects his employees to address him. He increasingly spends time on his own boat, an expensive motor cruiser, which is moored in the local harbour twenty minutes drive away. When he is not on holiday, Ron is always at work at 8.00 am in the morning to make sure that employees arrive on time and he is also there at 5.30 pm to ensure that they do not leave early. However, he spends large parts of the working day on his boat, although he can be contacted by mobile telephone. Employees who arrive late for work have to immediately explain the circumstances to Ron. If he feels that the explanation is unacceptable then he makes an appropriate deduction from their wages. Wages, like all costs in the company, are closely monitored by Ron.Employees, customers and suppliersFrigate currently has 25 employees primarily undertaking sales, warehousing, accounts and administration. Although employees are nominally allocated to one role, they are required to work anywhere in the company as required by Ron.They are also expected to help Ron in personal tasks, such as booking holidays for his family, ﬁ lling in his personal tax returns and organising social events.Egdon has laws concerning minimum wages and holidays. All employees at Frigate Ltd are only given the minimum holiday allocation. They have to use this allocation not only for holidays but also for events such as visiting the doctor, attending funerals and dealing with domestic problems and emergencies. Ron is particularly inﬂ exible about holidays and work hours. He has even turned down requests for unpaid leave. In contrast, Ron is often away from work for long periods, sailing in various parts of the world.Ron is increasingly critical of suppliers (‘trying to sell me inferior quality goods for higher prices’), customers (‘moaning about prices and paying later and later’) and society in general (‘a period working in the navy would do everyone good’). He has also been in dispute with the tax authority who he accused of squandering his ‘hard-earned’ money.An investigation by the tax authority led to him being ﬁ ned for not disclosing the fact that signiﬁ cant family expenditure (such as a holiday for his daughters overseas) had been declared as company expenditure.Company accountantIt was this action by the tax authority that prompted Ron to appoint Ann Li as company accountant. Ann had previously worked as an accountant in a number of public sector organisations, culminating in a role as a compliance ofﬁ cer in the tax authority itself. Ron felt that ‘recruiting someone like Ann should help keep the tax authorities happy. After all, she is one of them’.Ann was used to working in organisations which had formal organisational hierarchies, specialised roles and formal controls and systems. She tried to install such formal arrangements within Frigate. As she said to Ron ‘we cannot have everyone working as if they were just your personal assistants. We need structure, standardised processes and accountability’. Ron resisted her plans, at ﬁ rst through delaying tactics and then through explicit opposition, tearing up her proposed organisational chart and budget in front of other employees. ‘I regret the day I ever made that appointment’, he said. After six months he terminated her contract. Ann returned to the tax authority as a tax inspector.Required:The cultural web allows the business analyst to explore ‘the way things are done around here’.(a) Analyse Frigate Ltd using the cultural web or any other appropriate framework for understanding organisationalculture. (15 marks)(b) U sing appropriate organisation conﬁguration stereotypes identiﬁed by Henry Mintzberg, explain how anunderstanding of organisation conﬁguration could have helped predict the failure of Ann Li’s proposed formalisation of structure, controls and processes at Frigate Ltd. (10 marks)(25 marks)7[P.T.O.The Institute of Administrative Accountants (IAA) has a professional scheme of examinations leading to certiﬁ cation.The scheme consists of six examinations (three foundation and three advanced) all of which are currently assessed using conventional paper-based, written examinations. The majority of the candidates are at the foundation level and they currently account for 70% of the IAA’s venue and invigilation costs.There are two examination sittings per year and these sittings are held in 320 centres all over the world. Each centre is administered by a paid invigilation team who give out the examination paper, monitor the conduct of the examination and take in completed scripts at the end. Invigilators are also responsible for validating the identity of candidates who must bring along appropriate identiﬁ cation documents. At over half of the centres there are usually less than ten candidates taking the foundation level examination and no candidates at all at the advanced level. However, the IAA strives to be a world-wide examination body and so continues to run examinations at these centres, even though they make a ﬁ nancial loss at these centres by doing so.Recent increases in invigilation costs have made the situation even worse. However, the principles of equality and access are important to the IAA and the IAA would like to increase the availability of their examinations, not reduce it. Furthermore, the IAA is under increased ﬁ nancial pressure. The twice-yearly examination schedule creates peaks and troughs in cash ﬂ ow which the Institute ﬁ nds increasingly hard to manage. The Institute uses its $5m loan and overdraft facility for at least four months every year and incurred bank charges of $350,000 in the last ﬁ nancial year.ExaminationsAll examinations are set in English by contracted examiners who are paid for each examination they write. All examinations are three-hour, closed-book examinations marked by contracted markers at $10 per script. Invigilators send completed scripts directly to markers by courier. Once scripts have been marked they are sent (again by courier) to a centralised IAA checking team who check the arithmetic accuracy of the marking. Any marking errors are resolved by the examiner. Once all marks have been veriﬁed, the examination results are released. This usually takes place16 weeks after the examination date and candidates are critical of this long delay. The arithmetic checking of scriptsand the production of examination results places signiﬁ cant demands on IAA full-time administrative staff, with many being asked to work unpaid overtime. The IAA also employs a signiﬁ cant number of temporary staff during the results processing period.E-assessmentThe new head of education at the IAA has suggested e-assessment initiatives at both the foundation and advanced levels.He has suggested that all foundation level examinations should be assessed by multiple-choice examinations delivered over the Internet. They can be sat anytime, anyday, anywhere. ‘Candidates can sit these examinations at home or at college. Anywhere where there is a personal computer and a reliable broadband connection.’Advanced-level examinations will continue to be held twice-yearly at designated examination centres. However, candidates will be provided with personal computers which they will use to type in their answers. These answers will then be electronically sent to markers who will use online marking software to mark these answers on the screen.The software also has arithmetic checking facilities that mean that marks are automatically totalled for each question.‘100% arithmetic accuracy of marking is guaranteed.’He has also suggested that there is no need to make a formal business case for the adoption of the new technology.‘Its justiﬁ cation is so self-evident that deﬁ ning a business case, managing beneﬁ ts and undertaking beneﬁ ts realisation would just be a pointless exercise. It would slow us down at a time when we need to speed up.’Required:(a) Evaluate the perceived beneﬁ ts and costs of adopting e-assessment at the IAA. (15 marks)(b) Explain why establishing a business case, managing beneﬁ ts and undertaking beneﬁ ts realisation are essentialrequirements despite the claimed ‘self-evident’ justiﬁ cation of adopting e-assessment at the IAA.(10 marks)(25 marks)End of Question Paper8。

ACCA P3真题 2010 June Q3 答案解析

ACCA P32010June Q3(a)Evaluate the potential benefi ts to the city authority and its IT employees,of outsourcing IT to ProTech-Public.The scenario suggests a number of reasons why outsourcing should be benefi cial to the city authority.本题中提高一系列为什么外包对于城市治理有好处。

Firstly,over the last decade there have been fl uctuations in demand for IT staff.The authority has recruited to meet short-term demand but,because of the problems of shedding labour,the IT department has not proportionally contracted once that demand has passed.The implication is that,as a result,IT staff costs are higher than they should be.The outsourcing model provides a way of matching supply to demand.Employees are only brought in when there is a specifi c project for them to work on.首先，在过去十年，对IT员工的需求一直在波动。

管理局因为短期需求聘用了人员，但是因为裁员问题，IT部门不能在需求之后解雇员工。

ACCA P3 2011年6月答案

Professional Level – Essentials Module, Paper P3Business Analysis June 2011 Answers 1(a)An external environmental analysis considers political, economic, socio-cultural, technological, legal and environmental (ecological) forces that affect EcoCar.Although it was external environmental factors that prompted Professor Jacques to develop the original EcoCar, it is primarily socio-cultural forces that are determining its current sales. There have to be customers prepared to pay a premium price for environmentally friendly cars, whose conventional rivals are $2,000 cheaper, and are faster with better acceleration. These customers are prepared to pay this premium because they are concerned about the conventional car’s use of non-renewable resources (oil) and the effect of its carbon emissions on climate change. They are essentially ‘green’ consumers. It is easier to be such a consumer in a developed, growing economy where there is sufficient disposable income to be able to make such choices. Thus the economic health and disposable income of the country are important to EcoCar and should be monitored.Underpinning the green consumer market is the belief that environmental damage is caused by CO2emissions and thatpreserving natural resources for future generations is important. Any scientific evidence to the contrary could cause problemsfor the EcoCar, for example, if scientists discover that excess CO2is actually necessary for the planet’s survival. Similarly, ifpeople become increasingly pessimistic, less concerned about their children’s future or resigned to the belief that there is nothing they can do to avert catastrophe then their buying behaviour may become more self-centred and hedonistic, spending discretionary expenditure on more immediate personal, sensory pleasures. EcoCar need to monitor such trends. Individual people do really need to believe that they can make a difference to the world in which they, and their descendents, live in. T echnological innovation is at the heart of EcoCar and the company needs to monitor technological trends for at least two reasons. Firstly, for potential alternatives to lithium-ion batteries that could seriously affect the viability of their whole product. Alternatives do exist (hydrogen for example) and so EcoCar is aware that the potential application of alternative technologies must be monitored. Secondly, the company has to be on the look-out for improvements in lithium-ion batteries that could make them cheaper, lighter or more powerful.EcoCar has been the beneficiary of government policy which has been aimed at nurturing green technology by giving taxincentives, grants and interest-free loans. It has also placed heavy taxes on cars with high CO2emissions. Very importantly,it has also funded the development of 130 charging centres throughout the country where the EcoCar can be re-charged. The company needs to monitor the government’s continued commitment to energy saving and the policies of any political opposition within the country.Finally, the government has enacted a number of general laws on car safety that have to be complied with by EcoCar. Further legislation is expected, so the company must monitor this.Thus there are a number of threats that EcoCar has to consider, using its risk management approach discussed in part (c) of this question. There are also risks associated with the potential decline of the green consumer and the emergence of alternative technologies.The external industry analysis could use elements of Porter’s five forces framework. Deciding the appropriate scope of the industry to be considered is important. This helps determine the competition facing EcoCar, either from the car industry as a whole, the sector concerned with reduced emissions or perhaps transport as a whole.The technological environment is driving the threat of substitute products. This threat is relatively high in an industry (car manufacturing) where there is no clear successor to conventional petrol and diesel fuelled cars. A number of alternatives and hybrids are either available or under development. Furthermore, there may be a popular movement to ‘do without it’. Cheap, frequent, reliable, safe public transport could lead to lower demand for private cars and indeed may be a better choice for the green consumer. Cycling could also pose a threat, combining a non-polluting alternative with exercise addressing problems of obesity and associated health issues.In theory, the switching costs of the consumer are relatively low if the industry is perceived as the car industry as a whole. The consumer just purchases a different car. However, the EcoCar appeals to a segment of buyers who are prepared to pay a premium price for the ‘cleaner’ product. Although the cost of the product is relatively high, the buyer does not actively seek out cheaper alternatives. They know that these alternatives exist but they do not purchase them because of their green ideals. In a sense, the consumers do not wish to bargain for this product.There is an ever-present threat of new entrants into this market. However, there are considerable capital investment costs which EcoCar have overcome with the help of grants, and interest-free loans. These incentives are unlikely to be available in all countries, or even all regions of Erewhon, given that they are linked to tackling areas of high unemployment. Furthermore, the absence of local car-building expertise, together with the processes patented by Professor Jacques should deter entrants into the market. It is interesting to note that Universal Motors (the second largest car manufacturer in the world) has decided to enter this sector of car production through acquisition, rather than developing its own product. It has brought further capital investment, which may not be available to potential competitors.The bargaining power of suppliers in the industry is unclear from the case study. Certainly, it is normally difficult to switch suppliers in such an industry because of the nature of the product and the tightly linked supply chains of this industry. This is not a problem for the large car companies who are powerful and much larger than their supplier companies but it could be a problem for a small manufacturer such as EcoCar, which has little bargaining power. However, the ownership of Universal Motors might alter this. They should be able to negotiate favourable contracts with suppliers, reflecting a reduction in the bargaining power of these suppliers. If labour is seen as a supplier, the problem of skilled labour has meant that labourrates have had to be increased and it is this increase (together with the shortage of skilled labour) that has prompted Universal Motors to consider outsourcing the production of the EcoLite model.In the car industry as a whole there are many competing firms and buyers can switch easily from one to another. The industry has high fixed costs and the cost of leaving the industry is high. Thus competitive rivalry in the car industry is high. However, in EcoCar’s sector there are not as many competing firms and they tend to be fairly well differentiated. Thus competitive rivalry appears to be less in this sector than in the car marketplace as a whole. Whichever perspective is adopted, risks will be identified that need to be dealt with by the company’s risk management process.(b)In support of outsourcingThe economic argument for outsourcing the manufacture of the EcoLite is best made if the manufacturing of this model is viewed in isolation. The proposed outsourcing supplier has quoted a cost for manufacture of $3,500. This is $1,000 less than the variable cost of manufacturing the current car at Lags Lane. It is still $750 per car cheaper even when transport costs are taken into consideration. Supporting information is given in Figure 1.EcoLiteSelling price per car ($)6,999Variable cost per car ($)4,500Weekly demand (cars)6Production time per car (machine hrs)8Contribution2,499Contribution/machine hour312Production time (hours)48Figure 1: Information relevant to the outsourcing issueOne of the reasons for the high variable cost of the car is the high cost of labour and inbound logistics. All evidence suggests that these costs will continue to increase to reflect the shortage of skilled labour in the region (as more people retire) and the high cost of moving goods in the congested roads of Midshire. The high cost of the car means that the most profitable combination of products (see below) produces a relatively small margin. This must be of concern to Universal Motors.Overall, the Lags Lane site is unable to meet the weekly demand for EcoCar’s products. The weekly demand for the three-car range is currently 152 hours (see Figure 2) and so the company (with 112 hours of production capacity) cannot meet product demand. Outsourcing will allow EcoCar to meet the demand for their products as well as increasing overall profitability.The EcoLite has fewer parts in common with the two other cars. The EcoPlus is essentially a slightly more sophisticated car than the Eco and the delay when switching production from Eco to EcoPlus is probably relatively small. I n contrast, the EcoLite has only 70% of parts in common with the two other cars which suggests that it is the obvious candidate to switch to a different plant. Overhead costs at Lags Lane should be reduced as there is no need to build and stock sub-assemblies and parts which are only used in the EcoLite. It has been suggested that there will be a $1,250 reduction in weekly overhead costs at Lags Lane if the production of the EcoLite model is outsourced.Against outsourcingThe economic argument for outsourcing is weakened if the complete product range is considered.Eco EcoPlus EcoLiteSelling price per car ($)9,99912,9996,999Variable cost per car ($)7,00010,0004,500Weekly demand (cars)656Production time per car (machine hrs)9108Contribution2,9992,9992,499Contribution/machine hour333300312Production time (hours)545048Figure 2: Further information relevant to the outsourcing issueAt present the following production combination represents the best product mix with the limited resources. See Figure 2 for supporting information.Six Ecos consuming 54 hours of production contributing $17,994 (6 x $2,999)Six EcoLites consuming 48 hours of production contributing $14,994 (6 x $2,499)One EcoPlus consuming 10 hours of production contributing $2,999 (1 x $2,999)This total contribution of $35,987 per week exceeds the estimated $35,000 per week overhead cost.However, if the EcoLite model is made elsewhere, then the following combination of cars will be made at Lags Lane Six Ecos consuming 54 hours of production contributing $17,994 (6 x $2,999)Five EcoPlus consuming 50 hours of production contributing $14,995 (5 x $2,999)This total contribution of $32,989 is less than the forecast $33,750 per week overhead cost.There are also eight unused production hours. It is possible that the future of the Lags Lane production facility could be in doubt if the EcoLite model is outsourced.The issue of the capacity of Lags Lane could be addressed by becoming a seven-day week three-shift operation (pushing capacity up to 168 hours per week) which would also allow 16 hours for maintenance, given that total demand currently comes to 152 hours. Whether this maintenance time would be sufficient would have to be investigated. There still remains, however, the problem of finding skilled labour in the Midshire area.Universal Motors might expect political opposition to the proposed outsourcing of the car even if they maintained production of the remaining two cars. Regional and national grants have been given to the company to help develop and produce the car. It has meant that part of a skilled workforce has been kept on in an area of high unemployment, reducing social costs to the community. The feeling that it is the region’s car is reflected in its image and sales. Outsourcing might have a detrimental effect on sales. People who were buying it because it was, in part, some reflection of regional pride may now buy elsewhere.The motivation of the buyers really has to be considered in more depth. It is acknowledged that people pay a premium for this car because they wish to make a social statement. The car uses less energy, has lower emissions and provides employment in the country where it makes most of its sales. T aking away employment may mean that the car may no longer fit the social buying criteria of some of its customers. However, the realisation that non-renewable energy is being used to transport these cars back to Erewhon where 95% of all sales are made may be even more problematic. Buyers may no longer feel that it represents an ethical choice. Building the car in a country where labour costs are low and then transporting it long distances in ships and environmentally unfriendly car transporters may completely undermine the brand.(c)Answers to the three internal weaknesses are given below. However, other responses could be just as valid and appropriatecredit will be given.Lack of control and co-ordinationThe company needs to implement a comprehensive budgeting system. A rudimentary budgeting system appears to exist, focused on planning rather than co-ordination or monitoring.The scenario shows a lack of co-ordination between production, procurement, inventory and finance. Recently, car production was halted by lack of an important sub-assembly. This led to the emergency purchase of components and overtime working to minimise the delay in re-starting car production. This raised the cost of production and would have reduced the profit margin on finished vehicles. Furthermore, there is evidence that purchases of bought-in finished inventory items (superior quality seats) have been made at times when there was insufficient demand for them or the money available to pay for them.This led to short-term financing requirements at a premium interest rate to resolve a public row with a supplier. There is alsoa cost associated with storing unwanted inventory.What the company needs is a plan which co-ordinates all these activities. This is known as a budget. Budgets would be prepared for production, for raw materials and for bought-in finished goods. The latter two budgets would be linked to the trade payables budget, which in turn is linked to the cash budget. Budgets facilitate planned co-ordination between the departments and activities of the organisation. Because they require planning, budgets also promote forward thinking and should help identify any forthcoming problems. These problems can be tackled in a planned way, for example, putting finance in place, before being prompted to do so by potential legal action from a supplier. A longer planning timeframe should have also helped the company arrange such finance at a better rate.Finally, budgets facilitate control. Deviations from the plan can be spotted early and appropriate action taken. Ordering excessive components would have been identified as a major deviation from plan and senior management action could have been taken. There is evidence of a lack of proper control at EcoCar (for example, training costs) and budgets would have helped address this.Research and Development succession and learningThe company needs to consider the principles of Human Resource Development (HRD).Research and Development has been central to the success of EcoCar. However, Universal Motors have recognised that the senior managers are getting older and that there is no succession planning or development in this area of expertise.Furthermore, they have also identified that although the senior managers may be technically competent, their people management skills are limited, losing key graduates that they failed to motivate or recognise. There is a concern that new technological opportunities are not being recognised or exploited because of an inappropriate culture within R & D.EcoCar needs to completely re-think its approach to Human Resource Development (HRD) if it is to retain an intellectual lead in the industry. HRD is concerned with investing in the learning of people who work for the company, replacing concern about short-term training costs (as expressed about the graduate training scheme) with the vision of long-term training investment.As well as providing an internal pool of capable employees, proponents of this approach also argue that it engenders loyalty and commitment to the organisation, reducing staff turnover and all the costs associated with it. Consequently, it is a key approach to planning for staff succession from within.The strategic implications of such an approach should also not be overlooked. EcoCar is working in a challenging leading edge environment. Central to the concept of the learning organisation is the belief that adopting such a concept is one of the best ways of challenging and moving away from the current culture of the organisation. This is necessary at EcoCar. Overall,human resource development has the ‘prospect of unleashing the potential that lies within all people, allowing employees to contribute to and indeed transform strategy’ (Jeff Gold).The understanding of riskEcoCar needs to establish a risk management process that identifies and documents risks and put into place policies for eliminating, reducing or coping with them if they occur. In general, Universal Motors believe that EcoCar often recognise risks but do little about them except discuss them. Overall, it is concerned with the amount of risk that senior managers appear to take. Although individually the senior managers are risk averse, as a group they seem to seem to take increasingly riskier decisions as a way of overcoming their individual fears.In a risk management system risks would be identified and documented, usually on a risk register. Once they have been documented, risks need to be assessed, both for the probability of the risk occurring and for the impact it has if it does occur.Risk is also related to corporate governance. There is strong evidence to suggest that there is risk-related motivation for monitoring and improving corporate governance. EcoCar needs to consider the establishment of a main board risk committee.Revised corporate guidance, building on the T urnbull Report (FRC, 2005), states that companies ‘should, as a minimum, disclose that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the company and that it is regularly reviewed by the board’.In general, there are four strategies for dealing with risk. Risk avoidance is concerned with removing the factors that give rise to the risk. In the context of EcoCar, the risk of adverse publicity due to poor performance in a rally could be avoided by not running a car in the rally. Risk transference is achieved by passing the risk on to someone else. There is a certain element of this in the outsourcing approach being considered by Universal Motors for the manufacturing of EcoLite. Risks associated with employing and fully utilising staff are passed on to the outsourcer. Risk reduction is concerned with reducing the chance of the risk occurring and is usually associated with a mitigation response which details what the organisation should do if the relevant event actually takes place. For example, the risk of employees passing on technical information about the company’s products could be reduced by strict contractual terms with deterrent penalties, reducing the chance of them actually passing on this information. The risk would be mitigated by immediate legal action against the employees and an action plan put in place with company’s lawyers. Finally, certain risks are just recognised and absorbed. The potential risk is recognised and accepted as part of doing business in that sector, but the risk is continually monitored.Risks are linked to the external factors identified in the first part of this question. For example, the risk of consumers losing interest in green issues affects the attractiveness of the industry to potential competitors.2(a)In the scenario, Barry Blunt commented on simple payback (and its supposed advantage over discounted cash flow), the selection of the discount rate, the role of the IRR, the importance of intangible benefits and the realisation of benefits. Each of these five themes is elaborated on below:Simple Payback calculation (time to payback)Job One All figures in $000C/F0–110–60–45–5Year0Year1Year2Year3Year4T otal costs11010101010T otal savings060255070Cumulative –110–60–45–555Job Two All figures in $000C/F0–90–50–35–5Year0Year1Year2Year3Year4T otal costs9020201010T otal savings060354035Cumulative–90–50–35–520Figure 1: Payback calculations for 8-HatsThe calculations (Figure 1) show that Barry Blunt’s assertion is not true, both jobs payback early in year 4. If payback (time to payback) had been used, Job One would probably still have been selected because it pays back more in Year 4 than Job 2.Barry also seems to misunderstand the limitations of payback. It ignores all cash flows beyond the payback period, which in longer projects can be very significant. In this example, payback ignores the fact that Job 1 has a significantly higher net cash flow inflow on year 4 than Job 2.The discount rateInflation is taken into account in setting the discount rate. However, interest forgone, the cost of capital (if money is being borrowed to fund the investment) and risk will also have an influence. Interest forgone is concerned with the opportunity cost of investing the money in a bank deposit account and earning interest. The cost of capital is concerned with the cost of borrowing money to fund investment. A risk premium would reflect the perceived risk associated with these two internal projects. The discount rate used will incorporate an allowance for risk which will determine the required rate of return or ‘hurdle rate’ that a project must exceed for it to be viable. Information about risk-free interest rates during the period, the riskprofile of the company and the company’s cost of capital (using the Capital Asset Pricing Model) would also have been of relevance.Even if there was an economic logic to changing the discount rate to 3% or 4% this would have no overall effect on the selection of the projects. In fact it is likely to have made Job 1 even more attractive than Job 2, as the cash flows in year 3 and 4 would have been discounted less. In fact, if a discount rate of 4% is used (and this calculation is not expected of the candidate) then the gap in NPV between Jobs 1 and 2 increases.The Internal Rate of return (IRR)The IRR is basically the discount rate that produces an NPV of zero for net project cash flows. If the selection is between two projects with the same scale of investment (which is the case here), then it has no effect on which project is selected. The project with the greatest NPV will usually produce the higher IRR. However, the IRR does become important when any project selected has to achieve a pre-specified company rate, or where projects with different scales of investment are being compared. This is not the case at 8-Hats.Tangible and intangible benefitsThe fundamental problem with investment appraisal generally is the reliability of cash flow estimates made for future cash inflows and outflows. For both jobs there seems to be an inclusion of specific monetary values for what appear to be intangible benefits – better information and improved staff morale. As Barry Blunt says, these are important, but it is very unlikely that either of these could be predicted with any certainty, particularly at the start of the project. Estimating for later time periods in the project is also very difficult and it is significant that these benefits increase as the project progresses. These intangible benefits amount to $110,000 for Job One and $50,000 for Job T wo. I f these intangible benefits are deducted from the analysis then, in fact, Job T wo has a higher NPV than Job One. However, both are negative, suggesting that neither project should be attempted.Benefits realisationFinally, Barry has a fundamental misunderstanding of benefits realisation. The feasibility study is concerned with establishing the business case of a project and it should identify the project’s benefits and costs. Benefits realisation is concerned with establishing whether the predicted benefits in the business case have been realised once the product or service delivered by the project has been in place for some time. It compares actual costs and benefits with those predicted in the business case.It cannot take place after the feasibility study of the project because at that point the project has not been completed and so any predicted benefits could not, at that stage, have been realised.(b)8-Hats Promotions are currently structured in functional departments, with each function representing activities of thecompany that have either been acquired (for example travel) or organically developed. Each job is passed between functions, with each function focusing on optimising its part of the transaction. Thus the sales department concentrates on winning the job by fiercely reducing prices because the sales managers are rewarded on turnover, not profit. The events department focuses on providing the most rewarding client experience and the travel department on selling travel options with the best profit margin. The focus of the travel department can cause conflict with the sales and marketing department and the operations department has the problem of trying to profitably deliver an event at a price agreed by sales and marketing department but with the functionality promised by the events department. The finance department has responsibility for managing the cash flow of the job and the payment of invoices and collection of money owing. There have been occasions where a job has been jeopardised by the failure of the company to pay key suppliers on time.The problems described above are typical of a functional structure and the ‘silo effect’ caused by departments sub-optimising based on their own objectives and interests. The job, which is effectively being passed across the silos, suffers due to lack of co-ordination. Conflicts between two silos can often only be dealt with by managers who are above the silos. There is an example in the scenario where Barry Blunt has to intervene to arrange extra funding to pay supplier invoices when those suppliers threaten to boycott a folk music festival.The matrix structure is an attempt to manage key elements of the company across the functional departments. This might bea product, project or a clearly defined client sector. In the context of 8-Hats it is jobs, which are effectively projects, andpotentially, key accounts (such as Kuizan) that need to be managed across the functional silos.Each job has the characteristics of a project. It has an established start, it runs for a few months, and then has a specified finish which is often the event itself (such as the folk festival or a Kuizan customer experience event). A multi-disciplinary project team drawn from all of the functional sections would allow continuity and focus on delivering a successful and profitable project. Because much of the company is project-based, a set of profitable projects should lead to a profitable company. Decisions within the project will, to some extent, reflect a consensus view of all concerned. The sales manager responsible for agreeing the deal would still be involved at event realisation and would also contribute to the management of cash flow through the complete project. This commitment to the project goal should lead to a more rewarding client experience. The need to keep clients satisfied is another potential element to the matrix, with account managers being appointed to key accounts with the responsibility of managing clients across both silos and projects.The need for project teams to reflect a consensus view often means that decisions may take longer in a matrix structure and tension within the multi-disciplinary team may lead to a large amount of conflict. This conflict is more likely when cost and profit responsibilities are either unclear or counter-productive. At 8-Hats, the practice of rewarding sales managers on a turnover basis will have to be reviewed, otherwise there will be significant tension between the line (function) and the project.It has also been claimed that job and task responsibilities are unclear in a matrix structure and so the company will have to。

P7_Revision_Mock_June_13_Questions

ACCAPaper P7 (International) Advanced Audit & Assurance Revision Mock ExaminationJune 2013Question PaperTime Allowed 15 minutes Reading and planning3 hours WritingThis paper is divided into two sections:Section A – BOTH questions are compulsory and MUST be attempted Section B – TWO questions ONLY to be attemptedDo NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor.© Interactive World Wide Ltd, April 2013All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Interactive World Wide Ltd.This is a blank page.The question paper begins on page 4.Section A – BOTH questions are compulsory and MUST be attempted 1Lacroix Hotels is a small hotel group that owns and manages 18 hotels in the country where it is based. It is owner-managed by the 4 people who set the company up 8 years ago, and has recently reported its first profit after several years of losses. The company borrowed heavily in its first few years and the main reason it has taken so long to record a profit is the high level of interest payments it is making. The first capital repayment of the loan is due to take place on 14 August 2013.You are taking over as the audit manager on the team this year having had no previous involvement with this client. The partner, Mike Ross, has been involved with this client for the last 2 years, and he is keen for you to have plenty of client contact to help build up your client understanding, and to ensure a smooth audit process. The final audit of the financial statements for the year ending 31 May 2013 is due to begin towards the end of June.Last week you met with the Finance Director, Leroy Galliant. You made the following notes at the meeting:“The company is expecting to make a small profit for the y/e 31 May 2013, although there are a few issues to resolve before draft financial statements can be issued. The year-end inventory count did not go well, with around $175,000 of inventory recorded on the system not being found anywhere in the various storage areas. Apparently a surprise inventory count halfway through the accounting year had the same problem, although Leroy seems to have no idea what the problem is. He wants to meet with Mike to discuss how we might help with this issue – he is not clear what “forensic auditing”involves but is keen to understand it better before taking the matter any further. He is also interested to hear Mike’s views on what the problem might be, and how we might go about trying to resolve it.With the first big loan repayment coming up in a few weeks, the hotels have stopped any big capital projects in order to preserve cashflow – for example, the gym equipment in most of the hotels was due for renewal in April 2013, but they have put this back by at least 12 months and seem willing to put it back another 12 months if necessary. Leroy also mentioned some investigation by the health and safety authorities – something to do with a lack of supervision of guests using gym equipment – that has resulted in a couple of serious injuries to guests around 6 weeks ago. It is too soon to know for sure what will happen, but apparently they may have to close the gyms whilst the investigation continues. Leroy is worried, because he knows another hotel group was forced to close their gyms for over 6 months last year after a similar incident.”Mike Ross is going to meet with Leroy Galliant in a few days’ time. He has asked you to put some briefing notes together to help with the meeting and also wants to chat with you in person about how your client meeting went with Leroy. Mike has not spoken with Leroy for a few weeks, and has his concerns about the company. A number of competitors have been expanding in recent months and have been marketing themselves aggressively to win business. Several of the competitors are investing in new environmentally friendly systems that reduce water and electricity usage, and Lacroix Hotels have yet to follow this trend – and there is concern that they are losing somebusiness, especially corporate clients who use the company for conferences, as a result.Required:(a) Using the information provided, identify and explain the businessrisks facing Lacroix Hotels. (13 marks) (b) Identify and explain the risks of material misstatement that mayarise from the health and safety breach and the decision not to renew the gym equipment in the hotels. (8 marks) (c) Prepare briefing notes for the meeting between Mike Ross andLeroy Galliant covering:(i) the definition of forensic auditing, and (2 marks)(ii) suggesting potential reasons why the inventory counts are showing problems, and the procedures that could help toestablish which of the reasons is actually to blame.(12 marks) Note – 2 professional marks each are included in the mark allocation of parts (a) and (c).Note. Assume it is 11 June 2013.(35 marks)2Plaza, a limited liability company, is a major food retailer. Further to the success of its national supermarkets in the late 1990s and 2000s it has extended its operations throughout Europe and most recently to Asia, where it is expanding rapidly.You are a manager in Andando, a firm of Chartered Certified Accountants.You have been approached by Duncan Seymour, the chief finance officer of Plaza, to advise on a bid that Plaza is proposing to make for the purchase of MCM. You have ascertained the following from a briefing note received from Duncan.MCM provides training in management, communications and marketing to a wide range of corporate clients, including multi-nationals. The ‘MCM’ name is well regarded in its areas of expertise. MCM is currently wholly-owned by Frontiers, an international publisher of textbooks, whose shares are quoted ona recognised stock exchange. MCM has a National and an Internationalbusiness.The National business comprises 11 training centres. The audited financial statements show revenue of $12.5 million and profit before taxation of $1.3 million for this geographic segment for the year to 30 June 2011. Most of the National business’s premises are owned or held on long leases. Trainers in the National business are mainly full-time employees.The International business has five training centres in Europe and Asia. For these segments, revenue amounted to $6.3 million and profit before tax $2.4 million for the year to 30 June 2011. Most of the International business’s premises are held on operating leases. International trade receivables at 30 June 2011 amounted to $3.7 million. Although the International centres employ some full-time trainers, the majority of trainers provide their services as freelance consultants.Required:(a) Define ‘due diligence’ and describe the nature and purpose of adue diligence review. (3 marks)(b) Write a memorandum to the audit junior Pawar Rashadexplaining the matters you should consider before accepting anengagement to conduct a due diligence review of MCM. (12 marks)(c) Illustrate how:(i) Enquiry (4 marks)(ii) Analytical procedures (6 marks)might appropriately be used in the due diligence review of MCM.(25 marks)This is a blank page. Section B begins on page 8.Section B – TWO questions ONLY to be attempted3You are an audit manager in Bartolome, a firm of Chartered Certified Accountants. You have specific responsibility for undertaking annual reviews of existing clients and advising whether an engagement can be properly continued. The following matters have arisen in connection with recent assignments:(a)Leon Dormido is the senior in charge of the audit of the financialstatements of Moreno, a limited liability company, for the year ending 30June 2013. Moreno’s Chief Executive Officer, James Bay, has just sentyou an e-mail to advise you that Leon has been short-listed for theposition of Finance Director. You were not previously aware that Leonhad applied for the position. (5 marks)(b)Chatam, a limited liability company, is a long-standing client. One of itssubsidiaries, Ayora, has made losses for several years. At your firm’srequest, Chatam’s management has made a written representation thatgoodwill arising on the acquisition of Ayora is not impaired. Your firm’sauditors’ report on the consolidated financial statements of Chatam forthe year ended 31 March 2013 is unqualified. Your firm’s auditors’report on the financial statements of Ayora is similarly unqualified.Chatam’s Chief Executive, Charles Barrington, is due to retire in 2013when his share options mature. (6 marks)(c)Pinzon, a limited liability company and audit client, is threatening to sueyour firm in respect of audit fees charged for the year ended 31December 2011. Pinzon is alleging that Bartolome billed the full rate onair fares for audit staff when substantial discounts had been obtained byBartolome. (4 marks)(d)Hewitt, a limited liability company and audit client, has seen its profitscollapse in recent years. The company has decided it needs a majorrestructuring if it is to survive, and has asked your firm for advice inproducing a business plan to take to its bank in order to achieve newfinance. (5 marks) Required:Comment on the ethical and other professional issues raised by each of the above matters and their implications, if any, for the continuation of each assignment.(20 marks)Note. The mark allocation is shown against each of the three issues.Note. Assume today’s date is 11 June 2013.4You are the manager responsible for the audit of Seymour Co. The company offers information, proprietary foods and medical innovations designed to improve the quality of life. (Proprietary foods are marketed under and protected by registered names.) The draft consolidated financial statements for the year ended 31 March 2013 show revenue of $74·4 million (2012 – $69·2 million), profit before taxation of $13·2 million (2012 – $15·8 million) and total assets of $53·3 million (2012 – $40·5 million). The following issues arising during the final audit have been noted on a schedule of points for your attention:(a)In 2006, Seymour had been awarded a 20-year patent on a new drug,Tournose, that was also approved for food use. The drug had beendeveloped at a cost of $4 million which is being amortised over the lifeof the patent. The patent cost $11,600. In March 2013 a competitorannounced the successful completion of preliminary trials on analternative drug with the same beneficial properties as Tournose. Thealternative drug is expected to be readily available in two years’ time.(7 marks)(b) Seymour offers health-related information services through a wholly-owned subsidiary, Aragon Co. Goodwill of $1·8 million recognised onthe purchase of Aragon in April 2010 is not amortised but included atcost in the consolidated statement of financial position. At 31 March2013 Seymour’s investment in Aragon is shown at cost, $4·5 million, inits separate financial statements.Aragon’s draft financial statements for the year ended 31 March 2013show a loss before taxation of $0·6 million (2011 – $0·5 million loss)and total assets of $4·9 million (2012 – $5·7 million). The notes toAragon’s financial statements disclose that they have been prepared ona going concern basis that assumes that Seymour will continue toprovide financial support. (7 marks)(c) In May 2013 Seymour announced the recall and discontinuation of arange of petcare products. The product recall was prompted by the highlevel of customer returns due to claims of poor quality. For the year to31 March 2013, the product range represented $8·9 million ofconsolidated revenue (2012 – $9·6 million) and $1·3 million loss beforetax (2012 – $0·4 million profit before tax). The results of the ‘petcare’operations are disclosed separately on the face of the income statement.(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 andfinancial statements of Seymour Co for the year ended 31 March2013.(20 marks)Notes. Assume today’s date is 11 June 2013. The mark allocation is shown against each of the three issues.5(a) Explain the external auditor’s responsibility in respect of a client’s going concern status, and describe the potential effectson the audit report should there be going concern threats at aclient. (8 marks)(b)You are an audit manager in Fine & Young, a firm of Chartered CertifiedAccountants. One of your audit clients, Icehouse, is a textbookpublisher. Icehouse is planning to expand through the acquisition of anumber of small publishers of other media such as DVD and CDs. Thefinance director of Icehouse has been reviewing the financial statementsof potential targets. He has come across an auditors’ report dated 19January 2013, on financial statements for the year ended 30 September2012, which does not have the standard wording of an unqualifiedreport. The finance director has now approached you for an explanationof its meaning. The auditor’s responsibility and opinion paragraphs areas follows:‘Auditor’s responsibilityOur responsibility is to express an opinion on these financial statementsbased on our audit. We conducted our audit in accordance withInternational Standards on Auditing. Those standards require that wecomply with ethical requirements and plan and perform the audit toobtain reasonable assurance whether the financial statements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control.However, the evidence available to us identified certain transactionswhich had not been included in the previous year’s records and as aresult had been omitted from the financial statements for the yearended 30 September 2011.Adjustments have been made and are disclosed in Note 22. An auditalso includes evaluating the appropriateness of accounting policies usedand the reasonableness of accounting estimates made by management,as well as evaluating the overall presentation of the financialstatements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion’.Opinion‘In our opinion the financial statements give a true and fair view of thestate of the company’s affairs as at 30 September 2011 and its financialperformance and its cash flows for the year then ended in accordancewith International Financial Reporting Standards.‘The company’s liabilities exceed its assets at 30 September 2011creating an adverse situation which the directors believe is reversibleover the coming twelve months. The directors further believe that thecompany is capable of continuing to trade for twelve months from thedate of this report.‘19 January 2013’Required:Identify and explain the weaknesses of this report. (12 marks)(20 marks)Note. Assume today’s date is 11 June 2013. 11。

超实用：ACCA全国第一P3学习攻略

超实用：ACCA全国第一P3学习攻略7月18号收到成绩时着实惊讶了很久。

大三这半年我的重心并没有完全在ACCA上，留给备考的时间不到一个月。

进P阶段以后我从没想过要冲第一，但我发自内心的喜欢这一门科目。

P3是一门很傲娇的paper，它是ACCA整个课程体系里的霸道总裁，站在金字塔的顶端运筹帷幄，做着关乎企业生存发展的strategy，而学到此时我们被赋予的身份是企业的CEO或者咨询顾问，有机会感受一个在毕业之后短时间内都无法达到的高度和视野，这是多酷的事情。

从5月份开始进入复习状态，我的复习过程相信和大多数人类似，分为三步，第一步知识点巩固，第二步真题练习，第三步回顾总结。

P3的知识点并不难，但在复习知识点这一步最重要的是要把零碎的知识点串成一个完整的体系。

P3的整本书是有一个很清晰的整体逻辑的，举个例子：一般来说case study从外部战略环境分析开始，所以一开篇我们接触到的就是和外部战略环境相关的模型，PESTLE给了我们一个全面分析external environment的方向，五力模型将视角缩小一个具体行业的吸引力，Diamond研究一个企业的成功可否在另外一个新的环境里复制。

若外部环境有利，接下来则把视野转向公司内部。

而对内部的分析最重要是能不能拥有competitive advantages. 这就涉及到对value chain的分析，和对于competitivestrategy的选择。

往后走，当企业发展到一定阶段，必然面临着本地市场趋于饱和，产品进入衰退期的状况，这时Ansoff和TOWS模型给我们指引了一个继续扩张的方向。

而扩张之后，企业从单一的company变成了有多个业务组合和公司单元的corporate，业务越来越复杂，如何更好地分配资源，进行项目管理？BCG matrix和Ashridge porfolio就是很好的评估工具等等。

这里要特别感谢一下教我们P3的Rainbow老师，在讲解知识点的时候，从一开始就给了我们一个很清晰的宏观视野。

2010年ACCAP1-P3真题

2010年ACCA P1-P3真题Section A – This ONE question is compulsory and MUST be attempted1.In the 2009 results presentation to analysts, the chief executive of ZPT, a global internet communications company, announced an excellent set of results to the waiting audience. Chief executive Clive Xu announced that, compared to 2008, sales had increased by 50%, proﬁts by 100% and total assets by 80%. The dividend was to be doubled from the previous year. He also announced that based on their outstanding performance, the executive directors would be paid large bonuses in line with their contracts. His own bonus as chief executive would be $20 million. When one of the analysts asked if the bonus was excessive, Mr Xu reminded the audience that the share price had risen 45% over the course of the year because of his efforts in skilfully guiding the company. He said that he expected the share price to rise further on the results announcement, which it duly did. Because the results exceeded market expectation, the share price rose another 25% to $52.Three months later, Clive Xu called a press conference to announce a restatement of the 2009 results. This was necessary, he said, because of some ‘regrettable accounting errors’. This followed a meeting between ZPT and the legal authorities who were investigating a possible fraud at ZPT. He disclosed that in fact the ﬁgures for 2009 were increases of 10% for sales, 20% for proﬁts and 15% for total assets which were all signiﬁcantly below market expectations. The proposed dividend would now only be a modest 10% more than last year. He said that he expected a market reaction to the restatement but hoped that it would only be a short-term effect.The ﬁrst questioner from the audience asked why the auditors had not spotted and corrected the fundamental accounting errors and the second questioner asked whether such a disparity between initial and restated results was due to fraud rather than ‘accounting errors’. When a journalist asked Clive Xu if he intended to pay back the $20 million bonus that had been based on the previous results, Mr Xu said he did not. The share price fell dramatically upon the restatement announcement and, because ZPT was such a large company, it made headlines in the business pages in many countries. Later that month, the company announced that following an internal investigation, there would be further restatements, all dramatically downwards, for the years 2006 and 2007. This caused another mass selling of ZPT shares resulting in a ﬁnal share value the following day of $1. This represented a loss of shareholder value of $12 billion from the peak share price. Clive Xu resigned and the government regulator for business ordered an investigation into what had happened at ZPT. The shares were suspended by the stock exchange. A month later, having failed to gain protection from its creditors in the courts, ZPT was declared bankrupt. Nothing was paid out to shareholderswhilst suppliers received a fraction of the amounts due to them. Some non-current assets were acquired by competitors but all of ZPT’s 54,000 employees lost their jobs, mostly with little or no termination payment. Because the ZPT employees’ pension fund was not protected from creditors, the value of that was also severely reduced to pay debts which meant that employees with many years of service would have a greatly reduced pension to rely on in old age.The government investigation found that ZPT had been maintaining false accounting records for several years. This was done by developing an overly-complicated company structure that contained a network of international branches and a business model that was difﬁcult to understand. Whereas ZPT had begun as a simple telecommunications company, Clive Xu had increased the complexity of the company so that he could ‘hide’ losses and mis-report proﬁts. In the company’s reporting, he also substantially overestimated the value of future customer supply contracts. The investigation also found a number of signiﬁcant internal control deﬁciencies including no effective management oversight of the external reporting process and a disregard of the relevant accounting standards. In addition to Mr Xu, several other directors were complicit in the activities although Shazia Lo, a senior qualiﬁed accountant working for the ﬁnancial director, had been unhappy about the situation for some time. She had approached the ﬁnance director with her concerns but having failed to get the answers she felt she needed, had threatened to tell the press that future customer supply contract values had been intentionally and materially overstated (the change in fair value would have had a proﬁt impact). When her threat came to the attention of the board, she was intimidated in the hope that she would keep quiet. She ﬁnally accepted a large personal bonus in exchange for her silence in late 2008.The investigation later found that Shazia Lo had been continually instructed, against her judgement, to report ﬁgures she knew to be grossly optimistic. When she was offered the large personal bonus in exchange for her silence, she accepted it because she needed the money to meet several expenses related to her mother who was suffering a long-term illness and for whom no state health care was available. The money was used to pay for a lifesaving operation for her mother and also to rehouse her in a more healthy environment. Shazia Lo made no personal ﬁnancial gain from the bonus at all (the money was all used to help her mother) but her behaviour was widely reported and criticised in the press after the collapse of the company.The investigation found that the auditor, JJC partnership (one of the largest in the country), had had its independence compromised by a large audit fee but also through receiving consultancy income from ZPT worth several times the audit fee. Because ZPT was such an important client for JJC, it had many resources and jobs entirely committed to the ZPT account. JJC had, it was found, knowingly signed off inaccurate accounts in order to protect the management of ZPT and their ownsenior partners engaged with the ZPT account. After the investigation, JJC’s other clients gradually changed auditor, not wanting to be seen to have any connection with JJC. Accordingly, JJC’s audit business has since closed down. This caused signiﬁcant disturbance and upheaval in the audit industry.Because ZPT was regarded for many years as a high performing company in a growing market, many institutional investors had increased the number of ZPT shares in their investment portfolios. When the share price lost its value, it meant that the overall value of their funds was reduced and some individual shareholders demanded to know why the institutional investors had not intervened sooner to either ﬁnd out what was really going on in ZPT or divest ZPT shares. Some were especially angry that even after the ﬁrst restatement was announced, the institutional investors did not make any attempt to intervene. One small investor said he wanted to see more ‘shareholder activism’, especially among the large institutional investors.Some time later, Mr Xu argued that one of the reasons for the development of the complex ZPT business model was that it was thought to be necessary to manage the many risks that ZPT faced in its complex and turbulent business environment. He said that a multiplicity of overseas ofﬁces was necessary to address exchange rate risks, a belief challenged by some observers who said it was just to enable the ZPT board to make their internal controls and risk management less transparent.(a) Because of their large shareholdings, institutional investors are sometimes able to intervene directly in the companies they hold shares in.Required:(i) Explain the factors that might lead institutional investors to attempt to intervene directly in the management of a company; (6 marks)(ii) Construct the case for institutional investors attempting to intervene in ZPT after the ﬁrst results restatement was announced. (6 marks)(b) Distinguish between absolutist and relativist approaches to ethics and critically evaluate the behaviour of Shazia Lo (the accountant who accepted a bonus for her silence) using both of these ethical perspectives. (10 marks)(c) The ZPT case came to the attention of Robert Nie, a senior national legislator in the country where ZPT had its head ofﬁce. The country did not have any statutory corporate governance legislation and Mr Nie was furious at the ZPT situation because many of his voters had been badly ﬁnancially affected by it. He believed that legislation was needed to ensure that a similar situation could not happen again. Mr Nie intends to make a brief speech in the national legislative assembly outlining the case for his proposed legislation and some of its proposed provisions.Required:Draft sections of the speech to cover the following areas:(i) Explain the importance of sound corporate governance by assessing the consequences of the corporate governance failures at ZPT; (10 marks)(ii) Construct the case for the mandatory external reporting of internal ﬁnancial controls and risks; (8 marks)(iii) Explain the broad areas that the proposed external report on internal controls should include, drawing on the case content as appropriate. (6 marks)Professional marks will be awarded in part (c) for the structure, ﬂow, persuasiveness and tone of the answer. (4 marks) (50 marks)Section A – This ONE question is compulsory and MUST be attemptedSection B – TWO questions ONLY to be attempted2、The following draft group financial statements relate to Jocatt, a public limited company: Jocatt Group: Statement of financial position as at 30 NovemberAssets Non-current assets Property, plant and equipment Investment property Goodwill Intangible assets Investment in associate Available-for-sale financial assetsCurrent assets Inventories Trade receivables Cash and cash equivalentsTotal assetsEquity and Liabilities Equity attributable to the owners of the parent: Share capital Retained earnings Other components of equityNon-controlling interestTotal equityNon-current liabilities: Long-term borrowings Deferred tax Long-term provisions-pension liability Total non-current liabilitiesCurrent liabilities: Trade payables Current tax payableTotal current liabilitiesTotal liabilitiesTotal equity and liabilities2010 2009 $m $m327 25486 48 68 85 72 54 – 94 90–––––– ––– 616 490 –––––– –––––105 128 62 113 232 143–––––– –––399 384 –––––– –––––1,015 874 –––––– –––––290 275 351 324 15 20–––––– 656 619 –––––– 55 36 –––––––––––– 711 655 –––––––––––– 67 71 35 41 25 22 ––––––––––– 127 134 –––––– –––––––––– 177 85 –––––– ––––––––––– ––––– 1,015 874 –––––– –––––Jocatt Group: Statement of comprehensive income for the year ended 30 Nember 10$m Revenue 432 Cost of sales (317)––––––– G ross profit 115 Other income 25 Distribution costs (55•5) Administrative expenses (36) Finance costs paid (6) Gains on property 10•5 Share of profit of associate 6––––––– Profit before tax 59 Income tax expense (11)––––––– Profit for the year 48 –––––––Other comprehensive income after tax: Gain on available for sale financial assets (AFS) 2 Losses on property revaluation (7) Actuarial losses on defined benefit plan (6)––––––– Other comprehensive income for the year, net of tax (11) ––––––– Total comprehensive income for the year 37 ––––––––––––––Profit attributable to:Owners of the parent 38Non-controlling interest 10––––––– 48 –––––––Total comprehensive income attributable to:$mOwners of the parent 27Non-controlling interest 10––––––– 37 –––––––Jocatt Group: Statement of changes in equity for the year ended 30 November 2010Share Retained AFS Revaluation Total Non-Total Capital Earnings financial Surplus controlling equity assets (PPE) Interest $m$m $m $m$m $m$mBalance at 1 December 2009 275 324 4 16 619 36 655 Share capital issued 15 15 15 Dividends (5) (5) (13) (18) Rights issue 2 2 Acquisitions 20 20 Total comprehensive income for the year 32 2 (7) 27 10 37Balance at 30 November 2010 290 351 6 9 656 55 711––– ––––The following information relates to the financial statements of Jocatt:(i) On 1 December 2008, Jocatt acquired 8% of the ordinary shares of Tigret. Jocatt had treated this investment as available-for-sale in the financial statements to 30 November 2009. On 1 December 2009, Jocatt acquired a further 52% of the ordinary shares of Tigret and gained control of the company. The consideration for the acquisitions was as follows:Holding Consideration $m1 December 2008 8% 41 December 2009 52% 30––––– –––– 60% 34 ––––– ––––At 1 December 2009, the fair value of the 8% holding in Tigret held by Jocatt at the time of the business combination was $5 million and the fair value of the non-controlling interest in Tigret was $20 million. No gain or loss on the 8% holding in Tigret had been reported in the financial statements at 1 December 2009. The purchase consideration at 1 December 2009 comprised cash of $15 million and shares of $15 million.The fair value of the identifiable net assets of Tigret, excluding deferred tax assets and liabilities, at the date of acquisition comprised the following:$mProperty, plant and equipment 15 Intangible assets 18 Trade receivables 5 Cash 7The tax base of the identifiable net assets of Tigret was $40 million at 1 December 2009. The tax rate of Tigret is 30%.(ii) On 30 November 2010,Tigret made a rights issue on a 1 for 4 basis. The issue was fully subscribed and raised $5 million in cash.(iii) Jocatt purchased a research project from a third party including certain patents on 1 December 2009 for $8 million and recognised it as an intangible asset. During the year, Jocatt incurred further costs, which included $2 million on completing the research phase, $4 million in developing the product for sale and $1 million for the initial marketing costs. There were no other additions to intangible assets in the period other than those on the acquisition of Tigret.(iv) Jocatt operates a defined benefit scheme. The current service costs for the year ended 30 November 2010 are $10 million. Jocatt enhanced the benefits on 1 December 2009 however, these do not vest until 30 November 2012. The total cost of the enhancement is $6 million. The expected return on plan assets was $8 million for the year and Jocatt recognises actuarial gains and losses within other comprehensive income as they arise.(v) Jocatt owns an investment property. During the year, part of the heating system of the property,which had a carrying value of $0•5 million, was replaced by a new system, which cost $1 mil lion. Jocatt uses the fair value model for measuring investment property.(vi) Jocatt had exchanged surplus land with a carrying value of $10 million for cash of $15 million and plant valued at $4 million. The transaction has commercial substance. Depreciation for the period for property, plant and equipment was $27 million.(vii) Goodwill relating to all subsidiaries had been impairment tested in the year to 30 November 2010 and any impairment accounted for. The goodwill impairment related to those subsidiaries which were 100% owned.(viii) Deferred tax of $1 million arose on the gains on available-for-sale investments in the year.(ix) The associate did not pay any dividends in the year.Required:(a) Prepare a consolidated statement of cash flows for the Jocatt Group using the indirect method under IAS 7 ‘Statement of Cash Flows’.Note: Ignore deferred taxation other than where it is mentioned in the question. (35 marks) (b) Jocatt operates in the energy industry and undertakes complex natural gas trading arrangements, which involve exchanges in resources with other companies in the industry. Jocatt is entering into a long-term contract for the supply of gas and is raising a loan on the strength of this contract. The proceeds of the loan are to be received over the year to 30 November 2011 and are to be repaid over four years to 30 November 2015. Jocatt wishes to report the proceeds as operating cash flow because it is related to a long-term purchase contract. The directors of Jocatt receive extra income if the operating cash flow exceeds a predetermined target for the year and feel that the indirect method is more useful and informative to users of financial statements than the direct method.(i) Comment on the directors’ view that the indirect method of preparing statements of cash flow is more useful and informative to users than the direct method. (7 marks)(ii) Discuss the reasons why the directors may wish to report the loan proceeds as an operating cash flow rather than a financing cash flow and whether there are any ethical implications of adopting this3.Section A – This ONE question is compulsory and MUST be attemptedThe following information should be used when attempting question 1IntroductionShoal plc is a well-known corporate organisation in the ﬁsh industry. It owns 14 companies concerned with ﬁshing and related industries.This scenario focuses on three of these companies:ShoalFish Ltd – a ﬁshing ﬂeet operating in the western oceans ShoalPro Ltd – a company concerned with processing and canning ﬁsh ShoalFarm Ltd – a company with saltwater ﬁsh farms.Shoal plc is also ﬁnalising the purchase of the Captain Haddock chain of ﬁsh restaurants. ShoalFishShoal plc formed ShoalFish in 2002 when it bought three small ﬁshing ﬂeets and consolidated them into one ﬂeet. The primary objective of the acquisition was to secure supplies for ShoalPro. 40% of the ﬁsh caught by ShoalFish are currently processed in the ShoalPro factories. The rest are sold in wholesale ﬁsh markets. ShoalFish has recorded modest proﬁts since its formation but it is operating in a challenging market-place. The western oceans where it operates have suffered from many years of over-ﬁshing and the government has recently introduced quotas in an attempt to conserve ﬁsh stocks.ShoalFish has 35 boats and this makes it the sixth largest ﬂeet in the western oceans. Almost half of the total number of boats operating in the western oceans are individually owned and independently operated by the boat’s captain. Recent information for ShoalFish is given in Figure ShoalProShoalPro was acquired in 1992 when Shoal plc bought the assets of the Trevarez Canning and Processing Company. Just after the acquisition of the company, the government declared the area around Trevarez a ‘zone of industrial assistance’. Grants were made available to develop industry in an attempt to address the economic decline and high unemployment of the area. ShoalPro beneﬁted from these grants, developing a major ﬁsh processing and canning capability in the area. However, despite this initiative and investment, unemployment in the area still remains above the average for the country as a whole.ShoalPro’s modern facilities and relatively low costs have made it attractive to many ﬁshing companies. The ﬁsh received from ShoalFish now accounts for a declining percentage of the total amount of ﬁsh processed and canned in its factories in the Trevarez area. Recent information for ShoalPro is given in Figure 1.ShoalFarmShoalFarm was acquired in 2004 as a response by Shoal plc to the declining ﬁsh stocks in the western oceans. It owns and operates saltwater ﬁsh farms. These are in areas of the ocean close to land where ﬁsh are protected from both ﬁshermen and natural prey, such as sea birds. Fish stocks can be built up quickly and then harvested by the ﬁsh farm owner. Shoal plc originally saw this acquisition as a way of maintaining supply to ShoalPro.Operating costs at ShoalFarm have been higher than expected and securing areas for new ﬁsh farmshas been difﬁcult and has required greater investment than expected. Recent information for ShoalFarm is given in Figure 1.Figure 1: Financial data on individual companies 2007–2009Captain HaddockThe Captain Haddock chain of restaurants was founded in 1992 by John Dory. It currently operates one hundred and thirty restaurants in the country serving high quality ﬁsh meals. Much of Captain Haddock’s success has been built on the quality of its food and service. Captain Haddock has a tradition of recruiting staff directly from schools and universities and providing them with excellent training in the Captain Haddock academy. The academy ensures that employees are aware of the ‘Captain Haddock way’ and is dedicated to the continuation of the quality service and practices developed by John Dory when he launched the ﬁrst restaurant. All management posts are ﬁlled by recruiting from within the company, and all members of the Captain Haddock board originally joined the company as trainees. In 1999 the Prime Minister of the country identiﬁed Captain Haddock academy as an example of high quality in-service training. In 2000, Captain Haddock became one of the thirty best regarded brands in the country.In the past few years, the ﬁnancial performance of Captain Haddock has declined signiﬁcantly (see Figure 2) and the company has had difﬁculty in meeting its bank covenants. This decline is partly due to economic recession in the country and partly due to a disastrous diversiﬁcation into commercial real estate and currency dealing. The chairman and managing director of the company both resigned nine months ago as a result of concern over the breaking of banking covenants and shareholder criticism of the diversiﬁcation policy. Some of the real estate bought during this period is still owned by the company. In the last nine months the company has been run by an interim management team, whilst looking for prospective buyers. At restaurant level, employee performance still remains relatively good and the public still highly rate the brand. However, at a recent meeting one of the employee representatives called for a management that can ‘effectively lead employees who are increasingly demoralised by the decline of the company’.Shoal plc is currently ﬁnalising their takeover of the Captain Haddock business. The company is being bought for a notional $1 on the understanding that $15 million is invested into the company to meet short-term cash ﬂow problems and to improve liquidity. Shoal plc’s assessment is that there is nothing fundamentally wrong with the company and that the current ﬁnancial situation is caused by the failed diversiﬁcation policy and the cost of ﬁnancing this. The gross proﬁt margin in the sector averages 10%.Captain Haddock currently buys its ﬁsh and ﬁsh products from wholesalers. It is the intention of Shoal plc to look at sourcing most of the dishes and ingredients from its own companies; speciﬁcally ShoalFish, ShoalPro and ShoalFarm. Once the takeover is complete (and this should be within the next month), Shoal plc intends to implement signiﬁcant strategic change at Captain Haddock so that it can return to proﬁ tability as soon as possible. Shoal plc has implemented strategic change at a number of its acquisitions. The company explicitly recognises that there is no ‘one right way’ to manage change. It believes that the success of any planned change programme depends on an understanding of the context in which the change is taking place.Captain Haddock (all ﬁgures in $m) 2007 2008 2009 Turnover 115•00 114•50 114•00 Gross proﬁ (loss) 0•20 (5•10 ) (6•20 )Figure 2: Financial information for Captain Haddock 2007–2009Required:(a) In the context of Shoal plc’s corporate-level strategy, assess the contribution and performance of ShoalFish, ShoalPro and ShoalFarm. Your assessment should include an analysis of the position of each company in the Shoal plc portfolio. (15 marks)(b) Shoal plc explicitly recognises that there is no ‘one right way’ to manage change. It believes that the success of any planned change programme will depend on a clear understanding of the context within which change will take place.(i) Identify and analyse, using an appropriate model, the contextual factors that will inﬂence how strategic change should be managed at Captain Haddock. (13 marks)Professional marks will be awarded in part (b)(i) for the identiﬁation and justiﬁation of an appropriate model. (2 marks)(ii) Once the acquisition is complete, Shoal plc wish to quickly turnaround Captain Haddock and return it to proﬁtability.Identify and analyse the main elements of strategic change required to achieve this goal. (8 marks)Professional marks will be awarded in part (b)(ii) for the cogency of the analysis and for the overall relevance of the answer to the case study scenario. (2 marks)(c) Portfolio managers, synergy managers and parental developers are three corporate rationales for adding value.Explain each of these separate rationales for adding value and their relevance to understanding the overall corporate rationale of Shoal plc. (10 marks) (50 marks)Section B – TWO questions ONLY to be attempted参与ACCA考试的考生可按照复习计划有效进行，另外高顿网校官网ACCA考试辅导高清课程已经开通，财经网络教育领导品牌_________________________________________________________________ 还可索取ACCA考试通关宝典，针对性地讲解、训练、答疑、模考，对学习过程进行全程跟踪、分析、指导，可以帮助考生全面提升复习备考效果。

ACCA F6 mock exam answer (for 2010年6月、12月 )

ACCA Fundamentals Level Paper F6 (FA 2009) Taxation (UK)Question Day Final Mock ExaminationGuidance, Marking scheme and Suggested solutionsGuidance on improving your exam performanceWhich questions to do first?It is important for you to decide which order to attempt the questions. Each question will carry different marks so you may prefer to attempt the question with the most marks first or, instead, you may prefer to attempt the topic you are more confident about first. This means you will build up marks early on giving you a solid base to tackle the harder questions later.Whichever you choose, do not spend too long on the questions you are confident about as you need to spend an appropriate amount of time on them all. You can work out how much time you should spend on each by looking at the mark allocation and multiplying by 1.8 (as you have 1.8 minute per mark, not including reading time). For instance, you must not spend more than 18 minutes on a 10-mark question. Remember, you cannot pass the exam answering two or three questions well and the rest poorly.An alternative strategy is to answer all questions in strict order. You could use the time saved choosing the order by starting to plan your answers. You may prefer to use this method if you find yourself spending too long on your favourite questions as it forces you to spend an appropriate amount of time on each before moving on. StrategyMake sure your answers are easy to follow. The focus of the exam is computations, so make sure you use the correct proformas and show your workings, referenced in clearly.If there is a written element to a question do write full sentences, even if you are using bullet points.Time managementUse the reading time to make sure that you get as many of the marks as possible. This is your opportunity to brainstorm areas that you are less confident with and even to make a brief outline of the proformas you are going to use in your answers.Whatever notes/plans you make, use them when writing up your answer when the writing time begins. Tick off each item as you complete it. If you do not use your planning notes it was a waste of time doing them in the first place.Never overrun on any question; once the time is up move on to the next one.1 William WiseMarking schemeMarks(a)Net profit½Depreciation1Private use of light/heat1Private motor expenses1Legal fees1Personal tax1Private rent/rates1Repairs/renewals1Food hampers1Donation1Daughter’s salary1Goods for own use1Capital allowances2½14(b)Taxable income2Income tax2Class 4 NICs15(c)Salary½Bonus1Car1Fuel½Mobile – exempt½Use of private jet½Computer1Healthcare 1625 Suggested solutionChapter references. The income tax computation is in Chapter 2. Employment income is in Chapter 3 and taxable benefits are in Chapter 4. Trading income is dealt with in Chapter 7 with capital allowances covered in Chapter 8. National insurance is in Chapter 12.Top tips. In our answer we have made notes on why various adjustments were made. This is done for tutorial purposes. You did not need to give the explanations in the exam as they were not asked for.Always read the question.Easy marks. The calculation of the tax liability should provide a good opportunity to obtain easy marks – the bands are given to you in the tax rates and allowances tables.(a)£ £ Net profit30,200Add: Depreciation4,760Private light and heat (40%)610Private motor expenses (75%)3,540Legalfees1,200Personaltax250Private rent and rates (40%)1,560Repairsandrenewals1,050Foodhampers640Donation100Daughter’s salary (excessive amount)4,500Goods for own use 65018,860 Less: Capital allowances (W1)(25,245) Taxable trading profit 23,815Notes1 The legal fees incurred in connection with the clothing shop are not allowable since theyrelate to a capital item.2 Personal or private expenses are not allowable.3 The £2,200 spent on repairs in June 2009 is allowable because the shop was in a fit stateto use on purchase.4 Giftsoffood are not allowable. However, the gifts of pens are allowable because the pens carry a conspicuous advertisement for the business and cost less than £50 each.5 A donation to a national charity is not allowable. The donation to the local charity can beallowed as it carried an advertisement for the business and could be said to be made forthe purposes of the trade.6 Goods taken for own use must be brought into the profit and loss account at selling price.7 The excessive part of William's wife's salary is not allowable.Workings1 Capital allowancesPrivate useAIA General pool Car (25%)Allowances£ £ £ £ Additions 24,620 20,000AIA (100%) AIA (10/12 x 50K) (24,620)–24,620WDA x 10/12 (2,500) x 25% 62517,500 25,245(b)Non- savings Dividendincome income££Taxable trading profit (1.6.09 – 31.3.10) 23,815Dividends (× 100/90)7,500Net Income23,8157,500Less: personal allowance(6,475)Taxable Income 17,3307,500£24,830 Tax on non-savings income £ £17,330 × 20%3,466 Tax on dividend income£7,500 × 10% 7504,216 Class 4 NICs:(£23,815 – £5,715) × 8%£1,448 Note: You were not told that a Gift Aid declaration had been made in respect of the gift to the national charity.Mary’s total taxable employment income for the year is as follows:£ Salary80,000 Bonus – receipts basis20,000 Use of company car: 25% × £19,200 (W)4,800 Private fuel: 25% × £16,900 (W)4,225 Use of private jet: 20% × £750,000 ×1/1212,500 Computer: £3,000× 20%600 Private healthcare: (marginal cost to employer) 250 Total employment income122,375 WorkingCar and fuel benefit percentage5135187−= 10% + 15%25% Note: The provision of one mobile phone is an exempt benefit2 Eagle LtdMarking schemeMarks(a)IBAsQualifying expenditure1Offices not qualifying12% allowance1Land not qualifying1CAs:Expensive car120% WDA1FYA 1AIA1Adjusted trading profitPatent royalties 19(b)Trading income1Property income: warehouse 1222 warehouseChargeable gain: 1Gift aid donation1Franked investment income1Divide CT limits1Marginal relief company2CT liability1Due date113(c)Associates 1Group relief group 1Gains group 2Current year in Wing Ltd 1Set against income before charges 1Loss of period since joined group1Effect on gift aid donations 1830 Suggested solutionChapter references. Calculating PCTCT and the corporation tax liability is dealt with in Chapters 18 and19. Groups are in Chapter 22 and losses in Chapter 21. Capital allowances are covered in Chapter 8.Top tips. Try and keep your calculations in separate workings then make sure you reference them into your main answer clearly.(a) Easy marks. If you had learnt your capital allowances proforma you should have been able topick up some easy marks simply by filling in the figures given to you in the question)Tax adjusted trading profit£Trading profit per accounts229,900Less: Patent royalties payable(20,000) Industrial buildings allowances (W1)(3,800)(W2) (48,940)allowancesCapitalcomputation – y/e 31.3.10(b) CT£ Trading income 157,160 Property income (W3) 49,950 Chargeable gain (W4) 22,932230,042 Less: gift aid donation (3,000) PCTCT 227,042 FII (£27,000 × 100/90) 30,000 ‘profits’ 257,042 Tax @ 28% (W5)63,571 Less: marginal relief227,042(7,619) 7/400× (£750,000 – 257,042) ×257,042CT due by 1 January 2011 55,952 (c) Group relationships between Eagle Ltd and Wing Ltd(i) Associates – as Eagle Ltd controls Wing Ltd (ie owns > 50%) the two companies areassociated for corporation tax purposes. Consequently the CT limits are divided by 2.(ii) Group relief group – as Eagle Ltd has at least a 75% shareholding the two companies can surrender trading (and certain other) losses of the current period between each othei)Gains group – as Eagle Ltd has at least a 75% shareholding the two companies are in agains group. This means that assets can be transferred between them at no gain/no lossfor chargeable gains purposes, that they form one ‘unit’ for rollover relief purposes, andthat where an asset is sold to a third party an election may be made to treat the gain/lossas transferred to the other company in the group.Use of Wing Ltd’s lossWing Ltd has a small amount of interest income in the year. This is partly covered by the gift aid donation, and the balance will be taxable at the small companies’ rate of 21%. If it uses its loss in the current year this will be set off before charges and would only save tax at 21% and waste the gift aid donation.As it is in a group relief group with Eagle Ltd, it could surrender its trading loss to that company where this would save tax at 29.75%.However, as Wing Ltd did not join the group until 1 September 2009, only the loss thatcorresponds to the period that it has been in the group may be surrendered. As both companies prepare accounts to 31 March there is no need to further consider corresponding periods.The maximum group relief that could be surrendered to Eagle Ltd would be £30,392 (W6).It is probable that Wing Ltd would not make the current year claim but instead carry forward the remainder of the loss automatically to set against future trade profits.Working1 Industrial buildings allowances£ Factory141,000Canteen32,000Site preparation12,000Archit’ct's fees 5,000190,000 Note. The cost of the general offices does not qualify as it exceeds 25% of the total cost(72,500/262,500 = 27.6%). Always exclude the cost of land.Therefore IBAS @ 2% = £3,82Capital allowancesExpensiveAIA FYA General pool Motor car Allowances£££££TWDV b/f64,70014,700Disposals(12,400)Addition11,300FYA 10% (11,300)2,30011,300WDA @ 20%–(12,940)12,940Balancing allowance(2,300)2,300Addition22,400AIA (100%)(22,400)22,40051,76048,940 -3 Property income£ Warehouse 1Premium (£50,000 – (2% × £50,000 × 7))43,000Rent (£12,600 × 9/12)9,450Warehouse 2Rent (£8,400 × 9/12)6,300Bad debt (8,400 x 3/12) (2,100)Repairs to roof (6,700)49,9504 Capital gain£Proceeds156,000Less: cost(112,800)43,200 Less: indexation(20,268)22,932 Note. Companies are entitled to indexation until the date of disposal of an asset.5 CT limitsAs Wing Ltd becomes an associate part way through the period, the CT limits must be divided by two.££1,500,000 ÷ 2 750,000£300,000 ÷ 2150,000Eagle Ltd’s ‘profits’ are between these limits so marginal relief applies.6 Available trading loss£Loss of y/e 31.3.1052,100Period since joined group: 1.9.09 – 31.3.10 = 7 months ie 7/12 × £52,10030,3923 Yvonne, Sally, Joanne and BelindaMarking schemeMarks(a)Match with shares bought in next 30 days1Gain1Match with Share pool shares1Bonus issues issue 1Gain1Total gain 16(b)Gain on building sold 1Calculation of taxable now1Rolled over amount1Base cost of new asset 14(c)Calculation of gain1Entrepreneurs relief1Annual exemption 1 Taxgain 1on4(d)LandPart disposal calculation 2VaseChattels rule to restrict loss 2Offset loss against gain 1Annual exemption 1620 Suggested solutionChapter references. The basics of calculating chargeable gains are in Chapters 13 . Chattels arecovered in Chapter 14 with shares and securities in Chapter 16. Business reliefs are covered in Chapter15.Top tips. Work through each asset separately, making sure you start with the easier disposals.Easy marks. Part disposal calculations and disposals of chattels have always been common topics in the exam. They are relatively straightforward topics so make sure you know how to deal with them.(a) The sale of Yvonne's shares is initially matched with the shares bought in the next 30 days.£ Proceeds (1,000/5,000 × £23,000)4,600Less: cost (28.3.10)(4,400)Chargeable gain 200Then the shares are matched with the Share pool.£ Disposal proceeds (4,000/5,000)18,400Less: cost (w1)(5,867)12,533 Yvonne's total gain before the annual exemption is £12,733.(W1)No. Cost £ 18.8.97 Purchase 3,000 6,000 19.9.06 Purchase 2,000 5,0005,000 11,000Bonus issue 1:2 2,5007,500 11,000 Disposal (4,000) (5,867) 3,500 5,133(b)Office £ Proceeds 442,800 Less: Cost (187,200)Gain 255,600 Taxable in 09/10 (£442,800 - £400,000) (2,800) Gain rolled over 252,800Base cost of new asset £ Price paid440,000 Less: gain rolled over (252,800)(c)Entrepreneurs’ relief £Proceeds 580,000 Less Costs (325,000)Gain 255,000 Less Entrepreneurs’ relief (255,000 x 4/9) (113,333) Gain 141,667 Annual exemption (10,100) Taxable gain 131,567 Tax at 18% 23,682 (d)Part disposal of land£ Proceeds15,000Less: costB A A + ie 65,00015,00015,000+× £24,000 (4,500) Chargeable gain 10,500 Vase – chattels rules£ Proceeds (deemed) 6,000 Less: cost (10,000) Loss(4,000)Taxable gain£ Gain 10,500 Less: loss (4,000) Gain 6,500£ Gain 6,500 Less: annual exemption(10,100) Taxable gain Nil4 Mr MurphyMarking schemeMarks 2004/05Profits – actual basis12005/06Profits – first 12 months2Overlap profits1½ 2006/07Current year basis profits12007/08Current year basis profits12008/09Profits of gap period2Overlap relief1½2009/10Current year basis to new date 111 Payment dates for 2009/10– Payments on account1– Based on previous year1– Balancing payment & 1st POA1– Once actual tax calculated1415 Suggested solutionChapter references. The basis period rules are in Chapter 9. Self-assessment for individuals is covered in Chapter 18.Top tips. You must set out the tax years that you are dealing with in order to pick up all of the available marks – simply stating ‘1st tax year’ is not enough.Easy marks. Stating payment dates should provide a good opportunity to pick up easy marks so long as you have learnt the material.(a)2004/05 Actual basis 1.8.04 – 5.4.05× £13,000£10,400 8/102005/06 First 12 months’ profit 1.8.04 – 31.7.0531.5.05£13,0001.8.04–1.6.05 – 31.7.05 2/12 × £36,000£ 6,000£19,000 2006/07 Current year basis31.5.06£36,0001.6.05–Overlap profits£1.8.04 – 5.4.05 8 months10,40031.7.052 months 6,0001.6.05–10 months16,4002007/08 Current year basis31.5.07£44,000–1.6.062008/09 19 months to new accounting date£1.6.07 – 31.5.08 (12 months)38,0001.6.08 – 31.12.08 (7 months) 16,00054,000 Overlap relief for 7 months profits7/10 x £16,400 (11,480)£42,520 2009/10 Current year basis–31.12.09£40,0001.1.09Overlap profits to carry forward = 3 months11,480)£4,920 (16,400–(b) Payment dates for 2009/10Two payments on account (POA) will have been made as follows:1st on 31 January 20102nd on 31 July 2010Based on 2008/09 liability (½ paid each time)Balancing payment to be made 31 January 2011 once final liability has been calculated, along with the first POA for 2010/11.5 Confused Ltd and Puzzled LtdMarking schemeMarks(a)(i)Training2(ii)Transport2(iii)Air ambulance services26(b)Errors up to £10,0002Errors over £10,0002410Suggested solutionChapter references. VAT is in Chapters 25 and 26.Top tips. You must allocate sufficient time to deal with both parts of the requirement. You only had 18minutes for this question, so do not allow yourself to overrun.Easy marks. Easy marks can be obtained simply by calculating the VAT on a VAT exclusive figure using17.5% or a VAT inclusive figure at 7/47, so read the question carefully to ensure you are using the correctrate.(a) (i) TrainingConfused Ltd will be required to register for VAT as it will be making taxable supplies inexcess of the registration threshold.Output tax£Sales (£75,000 × 17½%)13,125Less: input tax (£10,000 × 7/47) (1,489)VAT due11,636(ii) TransportConfused Ltd will be required to notify HMRC of a need to register for VAT but because itis making only zero-rated supplies it may ask HMRC's permission not to register for VAT.The advantage of registration is that input VAT of £1,489 per month will be reclaimable.£Output tax NILLess: input tax(1,489)VAT repayment due (1,489)(iii) Air ambulance servicesIf exempt supplies only are made the company will not be permitted to register for VAT. NoVAT will be due or reclaimable.(b) Errors on a VAT return of up to £10,000 (net under declaration minus over declaration) may becorrected on the next VAT return without giving rise to either a common penalty or default interest.Other errors may be voluntarily disclosed separately to HMRC. Default interest and, in certaincircumstances, the common penalty, will apply in respect of these errors.BPP House, Aldine Place, London W12 8AA Tel: 0845 0751 100 (for orders within the UK) Tel: +44 (0)20 8740 2211Fax: +44 (0)20 8740 1184。

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ACCA Paper P3 BUSINESS ANALYSIS December 2010 Revision Mock
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