Student Name: Student No:
Calculator Make and Model _____________________________________________
(Failure to complete this section may delay the release of your grade.)
UNIVERSITY OF SOUTHERN QUEENSLAND
FACULTY OF BUSINESS
COURSE NO: ACC
COURSE NAME: Auditing / Auditing Practice
This examination carries 60% of the total Assessment for this course
Examination: Examiner: Pran Boolaky
Deferred/
Current Moderator: Peter Best
Supplementary
Internal ⌧ ⌧ Time Allowed:
Perusal: Twenty (20) minutes
External ⌧ ⌧ Working: Two (2) hours
Examination Date: June 2010
Special Instructions:
Communication of any kind about any matter between students by any means whatsoever is
strictly prohibited from the time that students enter the examination room until they exit at the
completion of the examination. This includes any temporary absence from the examination
room during the examination. Any such communication will be deemed to be cheating and
treated as serious academic misconduct under University Regulation 5.10.
This is a RESTRICTED examination.
Students are permitted:
• to use non-programmable calculators. Students must note the make and model of the calculator
used in the space provided above. This may be checked by the examination supervisor.
• to write on the blue examination paper during perusal.
Students are not permitted:
• to write in the examination answer booklet during perusal.
Please write your name and student number on all examination papers.
You are required to answer four (4) questions worth a total of sixty (60) marks.
Clearly number each question.
All examination question papers must be submitted to supervisors at the end of every examination and
returned to USQ.
Any non-USQ copyright material used herein is reproduced under the provisions of Section 200 (1) (b) of the
Copyright Amendment Act 1980.
, ACC - Auditing / Auditing Practice Page 1
June 2010
You are required to answer four (4) questions.
This examination is worth a total of sixty (60) marks.
Please record your answers in the examination answer booklet provided.
Question 1 (15 Marks)
Ron and Jessica (husband and wife) have been running their textiles business as a partnership for
more than twenty years. Both of them are nearly retiring but they feel so attached with their
business that they would not like to sell it. On the other hand the demand for their products is rising
significantly that they have to expand their production department and recruit more staff. Moreover
the expansion also requires more financial investment in the business.
At a partner’s meeting they decide to transfer a major part of their shares to their children. They
have two daughters and one son. Their son (Robert) is an aerospace engineer whereas one of the
daughters (Chan) is a medical practitioner. The youngest daughter holds a degree in management.
The children are excited by this move, but the youngest one (Tara) tells her parents that before
doing any transfer, it is necessary to convert the partnership into a company. It is agreed and the
company is incorporated under the name of R & J Co. Ltd. The shares are distributed as follows:
% shareholding
• Jessica 10
• Ron 10
• Robert 20
• Chand 20
• Tara 40
The reason for giving Tara a larger share than the other two children is because she will be involved
in the day-to-day management of the company. During the first meeting of the company, Tara
informs all the shareholders that the business is no longer governed by Partnership law, but the
Corporations Act and the requirements of the Corporations Act are different from that of the
Partnership Act. Tara makes it very clear that the company, given its size, needs to have its
financial statements audited every year. The other shareholders agree with the proposal but argue
that they need to understand:
• what the audit would involve
• who could be the auditor
• would it be wise to allow a third party (the auditor) access to their confidential business
information
• what if they do not have the accounts audited
• why not Tara herself doing the audit etc
Finally the board agreed that the company issue an invitation to tender for the audit of the
company’s financial statements.
You are manager in one of the audit firms in the city and the audit partner has decided to bid for the
tender. He has asked you to prepare a memo for him to include in the tender document. Your memo
should address the points raised by the shareholders but you are also required to include other
points that they might have missed.
Page 1 of 5
Calculator Make and Model _____________________________________________
(Failure to complete this section may delay the release of your grade.)
UNIVERSITY OF SOUTHERN QUEENSLAND
FACULTY OF BUSINESS
COURSE NO: ACC
COURSE NAME: Auditing / Auditing Practice
This examination carries 60% of the total Assessment for this course
Examination: Examiner: Pran Boolaky
Deferred/
Current Moderator: Peter Best
Supplementary
Internal ⌧ ⌧ Time Allowed:
Perusal: Twenty (20) minutes
External ⌧ ⌧ Working: Two (2) hours
Examination Date: June 2010
Special Instructions:
Communication of any kind about any matter between students by any means whatsoever is
strictly prohibited from the time that students enter the examination room until they exit at the
completion of the examination. This includes any temporary absence from the examination
room during the examination. Any such communication will be deemed to be cheating and
treated as serious academic misconduct under University Regulation 5.10.
This is a RESTRICTED examination.
Students are permitted:
• to use non-programmable calculators. Students must note the make and model of the calculator
used in the space provided above. This may be checked by the examination supervisor.
• to write on the blue examination paper during perusal.
Students are not permitted:
• to write in the examination answer booklet during perusal.
Please write your name and student number on all examination papers.
You are required to answer four (4) questions worth a total of sixty (60) marks.
Clearly number each question.
All examination question papers must be submitted to supervisors at the end of every examination and
returned to USQ.
Any non-USQ copyright material used herein is reproduced under the provisions of Section 200 (1) (b) of the
Copyright Amendment Act 1980.
, ACC - Auditing / Auditing Practice Page 1
June 2010
You are required to answer four (4) questions.
This examination is worth a total of sixty (60) marks.
Please record your answers in the examination answer booklet provided.
Question 1 (15 Marks)
Ron and Jessica (husband and wife) have been running their textiles business as a partnership for
more than twenty years. Both of them are nearly retiring but they feel so attached with their
business that they would not like to sell it. On the other hand the demand for their products is rising
significantly that they have to expand their production department and recruit more staff. Moreover
the expansion also requires more financial investment in the business.
At a partner’s meeting they decide to transfer a major part of their shares to their children. They
have two daughters and one son. Their son (Robert) is an aerospace engineer whereas one of the
daughters (Chan) is a medical practitioner. The youngest daughter holds a degree in management.
The children are excited by this move, but the youngest one (Tara) tells her parents that before
doing any transfer, it is necessary to convert the partnership into a company. It is agreed and the
company is incorporated under the name of R & J Co. Ltd. The shares are distributed as follows:
% shareholding
• Jessica 10
• Ron 10
• Robert 20
• Chand 20
• Tara 40
The reason for giving Tara a larger share than the other two children is because she will be involved
in the day-to-day management of the company. During the first meeting of the company, Tara
informs all the shareholders that the business is no longer governed by Partnership law, but the
Corporations Act and the requirements of the Corporations Act are different from that of the
Partnership Act. Tara makes it very clear that the company, given its size, needs to have its
financial statements audited every year. The other shareholders agree with the proposal but argue
that they need to understand:
• what the audit would involve
• who could be the auditor
• would it be wise to allow a third party (the auditor) access to their confidential business
information
• what if they do not have the accounts audited
• why not Tara herself doing the audit etc
Finally the board agreed that the company issue an invitation to tender for the audit of the
company’s financial statements.
You are manager in one of the audit firms in the city and the audit partner has decided to bid for the
tender. He has asked you to prepare a memo for him to include in the tender document. Your memo
should address the points raised by the shareholders but you are also required to include other
points that they might have missed.
Page 1 of 5
