(c) Define ‘market risk’ for Mr Allejandra and explain why Gluck and Goodman’s market risk exposure isincreased by failing to have an effective audit committee. (5 marks)
(c) Define ‘market risk’ for Mr Allejandra and explain why Gluck and Goodman’s market risk exposure is
increased by failing to have an effective audit committee. (5 marks)
相关考题：
Which of the following is most closely associated with pure risk:A profit and lossB personnel turnoverC insuranceD market fluctuationsE A and D only
15 Which of the following is most closely associated with pure risk:A. profit and lossB. personnel turnoverC. insuranceD. market fluctuationsE. A and D only
(b) Explain the meaning of the term ‘Efficient Market Hypothesis’ and discuss the implications for a company ifthe stock market on which it is listed has been found to be semi-strong form. efficient. (9 marks)
(d) Explain to the management of Bailey’s why consideration should be given to resolving the problems through:(i) job rotation; (5 marks)
(b) Explain the meaning of Stephanie’s comment: ‘I would like to get risk awareness embedded in the cultureat the Southland factory.’ (5 marks)
(b) Distinguish between strategic and operational risks, and explain why the secrecy option would be a sourceof strategic risk. (10 marks)
2 Chen Products produces four manufactured products: Products 1, 2, 3 and 4. The company’s risk committee recentlymet to discuss how the company might respond to a number of problems that have arisen with Product 2. After anumber of incidents in which Product 2 had failed whilst being used by customers, Chen Products had been presentedwith compensation claims from customers injured and inconvenienced by the product failure. It was decided that therisk committee should meet to discuss the options.When the discussion of Product 2 began, committee chairman Anne Ricardo reminded her colleagues that, apart fromthe compensation claims, Product 2 was a highly profitable product.Chen’s risk management committee comprised four non-executive directors who each had different backgrounds andareas of expertise. None of them had direct experience of Chen’s industry or products. It was noted that it wascommon for them to disagree among themselves as to how risks should be managed and that in some situations,each member proposed a quite different strategy to manage a given risk. This was the case when they discussedwhich risk management strategy to adopt with regard to Product 2.Required:(a) Describe the typical roles of a risk management committee. (6 marks)
(b) Using the TARA framework, construct four possible strategies for managing the risk presented by Product 2.Your answer should describe each strategy and explain how each might be applied in the case.(10 marks)
3 Susan Paullaos was recently appointed as a non-executive member of the internal audit committee of Gluck andGoodman, a public listed company producing complex engineering products. Barney Chester, the executive financedirector who chairs the committee, has always viewed the purpose of internal audit as primarily financial in natureand as long as financial controls are seen to be fully in place, he is less concerned with other aspects of internalcontrol. When Susan asked about operational controls in the production facility Barney said that these were not theconcern of the internal audit committee. This, he said, was because as long as the accounting systems and financialcontrols were fully functional, all other systems may be assumed to be working correctly.Susan, however, was concerned with the operational and quality controls in the production facility. She spoke toproduction director Aaron Hardanger, and asked if he would be prepared to produce regular reports for the internalaudit committee on levels of specification compliance and other control issues. Mr Hardanger said that the internalaudit committee had always trusted him because his reputation as a manager was very good. He said that he hadnever been asked to provide compliance evidence to the internal audit committee and saw no reason as to why heshould start doing so now.At board level, the non-executive chairman, George Allejandra, said that he only instituted the internal audit committeein the first place in order to be seen to be in compliance with the stock market’s requirement that Gluck and Goodmanshould have one. He believed that internal audit committees didn’t add materially to the company. They were, hebelieved, one of those ‘outrageous demands’ that regulatory authorities made without considering the consequencesin smaller companies nor the individual needs of different companies. He also complained about the need to have aninternal auditor. He said that Gluck and Goodman used to have a full time internal auditor but when he left a yearago, he wasn’t replaced. The audit committee didn’t feel it needed an internal auditor because Barney Chester believedthat only financial control information was important and he could get that information from his managementaccountant.Susan asked Mr Allejandra if he recognised that the company was exposing itself to increased market risks by failingto have an effective audit committee. Mr Allejandra said he didn’t know what a market risk was.Required:(a) Internal control and audit are considered to be important parts of sound corporate governance.(i) Describe FIVE general objectives of internal control. (5 marks)
(ii) Explain the organisational factors that determine the need for internal audit in public listed companies.(5 marks)
(b) Criticise the internal control and internal audit arrangements at Gluck and Goodman as described in the casescenario. (10 marks)
(c) Define ‘retirement by rotation’ and explain its importance in the context of Rosh and Company.(5 marks)
(b) (i) Explain how the use of Ansoff’s product-market matrix might assist the management of Vision plc toreduce the profit-gap that is forecast to exist at 30 November 2009. (3 marks)
(ii) Explain how the existing product range and the actions per Note (3) would feature in Ansoff’sproduct-market matrix. (7 marks)
(b) (i) Advise Benny of the income tax implications of the grant and exercise of the share options in SummerGlow plc on the assumption that the share price on 1 September 2007 and on the day he exercises theoptions is ￡3·35 per share. Explain why the share option scheme is not free from risk by reference tothe rules of the scheme and the circumstances surrounding the company. (4 marks)
(c) Explain the possible impact of RBG outsourcing its internal audit services on the audit of the financialstatements by Grey Co. (4 marks)
John Pentanol was appointed as risk manager at HZ Company a year ago and he decided that his first task was to examine the risks that faced the company. He concluded that the company faced three major risks, which he assessed by examining the impact that would occur if the risk were to materialise. He assessed Risk 1 as being of low potential impact as even if it materialised it would have little effect on the company’s strategy. Risk 2 was assessed as being of medium potential impact whilst a third risk, Risk 3, was assessed as being of very high potential impact.When John realised the potential impact of Risk 3 materialising, he issued urgent advice to the board to withdraw from the activity that gave rise to Risk 3 being incurred. In the advice he said that the impact of Risk 3 was potentially enormous and it would be irresponsible for HZ to continue to bear that risk.The company commercial director, Jane Xylene, said that John Pentanol and his job at HZ were unnecessary and that risk management was ‘very expensive for the benefits achieved’. She said that all risk managers do is to tell people what can’t be done and that they are pessimists by nature. She said she wanted to see entrepreneurial risk takers in HZ and not risk managers who, she believed, tended to discourage enterprise.John replied that it was his job to eliminate all of the highest risks at HZ Company. He said that all risk was bad and needed to be eliminated if possible. If it couldn’t be eliminated, he said that it should be minimised.(a) The risk manager has an important role to play in an organisation’s risk management.Required:(i) Describe the roles of a risk manager. (4 marks)(ii) Assess John Pentanol’s understanding of his role. (4 marks)(b) With reference to a risk assessment framework as appropriate, criticise John’s advice that HZ shouldwithdraw from the activity that incurs Risk 3. (6 marks)(c) Jane Xylene expressed a particular view about the value of risk management in HZ Company. She also said that she wanted to see ‘entrepreneurial risk takers’.Required:(i) Define ‘entrepreneurial risk’ and explain why it is important to accept entrepreneurial risk in businessorganisations; (4 marks)(ii) Critically evaluate Jane Xylene’s view of risk management. (7 marks)
4 (a) The purpose of ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements is toestablish standards and provide guidance on the auditor’s responsibility to consider laws and regulations in anaudit of financial statements.Explain the auditor’s responsibilities for reporting non-compliance that comes to the auditor’s attentionduring the conduct of an audit. (5 marks)
(ii) Briefly explain the implications of Parr Co’s audit opinion for your audit opinion on the consolidatedfinancial statements of Cleeves Co for the year ended 30 September 2006. (3 marks)
(b) Explain what effect the acquisition of Di Rollo Co will have on the planning of your audit of the consolidatedfinancial statements of Murray Co for the year ending 31 March 2008. (10 marks)
(b) Explain the principal audit procedures to be performed during the final audit in respect of the estimatedwarranty provision in the balance sheet of Island Co as at 30 November 2007. (5 marks)
(b) (i) Discuss the relationship between the concepts of ‘business risk’ and ‘financial statement risk’; and(4 marks)
CUSTOMER REFERRAL From: Bob SmithTo: Tompson Harris 10:12 AM, Monday, Dec. 21, 2015 Dear Mr. Harris, Thank you for your cooperation for our business in the recent years. With your great help and support, we have tripled our products in the last three years. And the profits of our company increases steadily. Now, we have enlarged and consolidated our domestic market and European market. Next step we intend to explore the North American market, especially Canada’s and USA’s. However, we do not have good connections in this region. Therefore, we shall be very obliged if you could kindly introduce us to some of your reliable partners in North America who are interested in our products. We look forward to your early reply. Merry Christmas and Happy New Year! Yours sincerely, Bob Smith Project manager1. How does Bob begin with his email()A. With a self-introduction.B. With his company’s current situation.C. With presenting thanks for help and support.2. What’s the current situation of Bob’s company()A. Very good.B. Not so good.C. Just so so.3. What are the market areas of Bob’s company()A. Domestic and Asian market.B. Domestic and North American market.C. Domestic and European market.4. What is the recent plan of Bob’s company()A. To enlarge the domestic and European market.B. To explore the North American market.C. To withdraw from European market and strengthen the North American market.5. What is the purpose of the email()A. To give best wishes for the coming Christmas and New Year.B. To ask for the introduction of some business partners in North America.C. To consolidate the business relationship.
The reasons for the popularity of Treasury bills are the following except that ______.A．they are the only money market instruments affordable to individual investorsB．they are highly liquidC．they are risk-freeD．they give higher return than other money market instruments
单句理解听力原文：Interest rate risk refers to the exposure of a bank's financial condition to adverse movements in interest rates.(1)A．Bank's financial condition is the cause of interest rate risk.B．Bank's financial condition has impact on interest rate risk.C．Interest rate risk occurs when interest rate moves against the bank's financial condition.D．Interest rate risk occurs when interest rate favours the bank's financial condition.
(a) List and explain FOUR methods of selecting a sample of items to test from a population in accordance with ISA 530 (Redrafted) Audit Sampling and Other Means of Testing. (4 marks)(b) List and explain FOUR assertions from ISA 500 Audit Evidence that relate to the recording of classes oftransactions. (4 marks)(c) In terms of audit reports, explain the term ‘modified’. (2 marks)
风险的优先级通常是根据（ ）设定。A.风险影响（Risk Impact）B.风险概率（Risk Probability）C.风险暴露（Risk Exposure）D.风险控制（Risk Control）