Text 1 The longest bull run in a century of artmarket history ended on a dramatic note with a sale of 56 works by Damien Hirst,Beautiful Inside My Head Forever,at Sotheby's in London on September 15th,2008.All but two pieces sold,fetching more than￡70m,a

题目

Text 1 The longest bull run in a century of artmarket history ended on a dramatic note with a sale of 56 works by Damien Hirst,Beautiful Inside My Head Forever,at Sotheby's in London on September 15th,2008.All but two pieces sold,fetching more than￡70m,a record for a sale by a single artist.It was a last victory.As the auctioneer called out bids,in New York one of the oldest banks on Wall Street,Lehman Brothers,filed for bankruptcy.The world art market had already been losing momentum for a while after rising bewilderingly since 2003.At its peak in 2007 it was worth some$65 billion,reckons Clare McAndrew,founder of Arts Economics,a research firm—double the figure five years earlier.Since then it may have come down to$50 billion.But the market generates interest far beyond its size because it brings together great wealth,enormous egos,greed,passion and controversy in a way matched by few other industries.In the weeks and months that followed Mr Hirst's sale,spending of any sort became deeply unfashionable.In the art world that meant collectors stayed away from galleries and salerooms.Sales of contemporary art fell by twothirds,and in the most overheated sector,they were down by nearly 90%in the year to November 2008.Within weeks the world's two biggest auction houses,Sotheby's and Christie's,had to pay out nearly$200m in guarantees to clients who had placed works for sale with them.The current downturn in the art market is the worst since the Japanese stopped buying Impressionists at the end of 1989.This time experts reckon that prices are about 40%down on their peak on average,though some have been far more fluctuant.But Edward Dolman,Christie's chief executive,says:“I'm pretty confident we're at the bottom.”What makes this slump different from the last,he says,is that there are still buyers in the market.Almost everyone who was interviewed for this special report said that the biggest problem at the moment is not a lack of demand but a lack of good work to sell.The three Ds—death,debt and divorce—still deliver works of art to the market.But anyone who does not have to sell is keeping away,waiting for confidence to return.
The most appropriate title for this text could be____

A.Fluctuation of Art Prices
B.Uptodate Art Auctions
C.Art Market in Decline
D.Shifted Interest in Arts

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相似问题和答案

第1题：

3 You are the manager responsible for the audit of Albreda Co, a limited liability company, and its subsidiaries. The

group mainly operates a chain of national restaurants and provides vending and other catering services to corporate

clients. All restaurants offer ‘eat-in’, ‘take-away’ and ‘home delivery’ services. The draft consolidated financial

statements for the year ended 30 September 2005 show revenue of $42·2 million (2004 – $41·8 million), profit

before taxation of $1·8 million (2004 – $2·2 million) and total assets of $30·7 million (2004 – $23·4 million).

The following issues arising during the final audit have been noted on a schedule of points for your attention:

(a) In September 2005 the management board announced plans to cease offering ‘home delivery’ services from the

end of the month. These sales amounted to $0·6 million for the year to 30 September 2005 (2004 – $0·8

million). A provision of $0·2 million has been made as at 30 September 2005 for the compensation of redundant

employees (mainly drivers). Delivery vehicles have been classified as non-current assets held for sale as at 30

September 2005 and measured at fair value less costs to sell, $0·8 million (carrying amount,

$0·5 million). (8 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 and financial statements of Albreda Co for the year ended

30 September 2005.

NOTE: The mark allocation is shown against each of the three issues.

正确答案：

3 ALBREDA CO

(a) Cessation of ‘home delivery’ service
(i) Matters
■ $0·6 million represents 1·4% of reported revenue (prior year 1·9%) and is therefore material.
Tutorial note: However, it is clearly not of such significance that it should raise any doubts whatsoever regarding
the going concern assumption. (On the contrary, as revenue from this service has declined since last year.)
■ The home delivery service is not a component of Albreda and its cessation does not classify as a discontinued
operation (IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’).
? It is not a cash-generating unit because home delivery revenues are not independent of other revenues
generated by the restaurant kitchens.
? 1·4% of revenue is not a ‘major line of business’.
? Home delivery does not cover a separate geographical area (but many areas around the numerous
restaurants).
■ The redundancy provision of $0·2 million represents 11·1% of profit before tax (10% before allowing for the
provision) and is therefore material. However, it represents only 0·6% of total assets and is therefore immaterial
to the balance sheet.
■ As the provision is a liability it should have been tested primarily for understatement (completeness).
■ The delivery vehicles should be classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. For this to be the case the following IFRS 5 criteria
must be met:
? the vehicles must be available for immediate sale in their present condition; and
? their sale must be highly probable.
Tutorial note: Highly probable = management commitment to a plan + initiation of plan to locate buyer(s) +
active marketing + completion expected in a year.
■ However, even if the classification as held for sale is appropriate the measurement basis is incorrect.
■ Non-current assets classified as held for sale should be carried at the lower of carrying amount and fair value less
costs to sell.
■ It is incorrect that the vehicles are being measured at fair value less costs to sell which is $0·3 million in excess
of the carrying amount. This amounts to a revaluation. Wherever the credit entry is (equity or income statement)
it should be reversed. $0·3 million represents just less than 1% of assets (16·7% of profit if the credit is to the
income statement).
■ Comparison of fair value less costs to sell against carrying amount should have been made on an item by item
basis (and not on their totals).
(ii) Audit evidence
■ Copy of board minute documenting management’s decision to cease home deliveries (and any press
releases/internal memoranda to staff).
■ An analysis of revenue (e.g. extracted from management accounts) showing the amount attributed to home delivery
sales.
■ Redundancy terms for drivers as set out in their contracts of employment.
■ A ‘proof in total’ for the reasonableness/completeness of the redundancy provision (e.g. number of drivers × sum
of years employed × payment per year of service).
■ A schedule of depreciated cost of delivery vehicles extracted from the non-current asset register.
■ Checking of fair values on a sample basis to second hand market prices (as published/advertised in used vehicle
guides).
■ After-date net sale proceeds from sale of vehicles and comparison of proceeds against estimated fair values.
■ Physical inspection of condition of unsold vehicles.
■ Separate disclosure of the held for sale assets on the face of the balance sheet or in the notes.
■ Assets classified as held for sale (and other disposals) shown in the reconciliation of carrying amount at the
beginning and end of the period.
■ Additional descriptions in the notes of:
? the non-current assets; and
? the facts and circumstances leading to the sale/disposal (i.e. cessation of home delivery service).

第2题：

(b) You are the audit manager of Jinack Co, a private limited liability company. You are currently reviewing two

matters that have been left for your attention on the audit working paper file for the year ended 30 September

2005:

(i) Jinack holds an extensive range of inventory and keeps perpetual inventory records. There was no full

physical inventory count at 30 September 2005 as a system of continuous stock checking is operated by

warehouse personnel under the supervision of an internal audit department.

A major systems failure in October 2005 caused the perpetual inventory records to be corrupted before the

year-end inventory position was determined. As data recovery procedures were found to be inadequate,

Jinack is reconstructing the year-end quantities through a physical count and ‘rollback’. The reconstruction

exercise is expected to be completed in January 2006. (6 marks)

Required:

Identify and comment on the implications of the above matters for the auditor’s report on the financial

statements of Jinack Co for the year ended 30 September 2005 and, where appropriate, the year ending

30 September 2006.

NOTE: The mark allocation is shown against each of the matters.

正确答案：
(b) Implications for the auditor’s report
(i) Corruption of perpetual inventory records
■ The loss of data (of physical inventory quantities at the balance sheet date) gives rise to a limitation on scope.
Tutorial note: It is the records of the asset that have been destroyed – not the physical asset.
■ The systems failure in October 2005 is clearly a non-adjusting post balance sheet event (IAS 10). If it is material
(such that non-disclosure could influence the economic decisions of users) Jinack should disclose:
– the nature of the event (i.e. systems failure); and
– an estimate of its financial effect (i.e. the cost of disruption and reconstruction of data to the extent that it is
not covered by insurance).
Tutorial note: The event has no financial effect on the realisability of inventory, only on its measurement for the
purpose of reporting it in the financial statements.
■ If material this disclosure could be made in the context of explaining how inventory has been estimated at
30 September 2005 (see later). If such disclosure, that the auditor considers to be necessary, is not made, the
audit opinion should be qualified ‘except for’ disagreement (over lack of disclosure).
Tutorial note: Such qualifications are extremely rare since management should be persuaded to make necessary
disclosure in the notes to the financial statements rather than have users’ attention drawn to the matter through
a qualification of the audit opinion.
■ The limitation on scope of the auditor’s work has been imposed by circumstances. Jinack’s accounting records
(for inventory) are inadequate (non-existent) for the auditor to perform. tests on them.
■ An alternative procedure to obtain sufficient appropriate audit evidence of inventory quantities at a year end is
subsequent count and ‘rollback’. However, the extent of ‘roll back’ testing is limited as records are still under
reconstruction.
■ The auditor may be able to obtain sufficient evidence that there is no material misstatement through a combination
of procedures:
– testing management’s controls over counting inventory after the balance sheet date and recording inventory
movements (e.g. sales and goods received);
– reperforming the reconstruction for significant items on a sample basis;
– analytical procedures such as a review of profit margins by inventory category.
■ ‘An extensive range of inventory’ is clearly material. The matter (i.e. systems failure) is not however pervasive, as
only inventory is affected.
■ Unless the reconstruction is substantially completed (i.e. inventory items not accounted for are insignificant) the
auditor cannot determine what adjustment, if any, might be determined to be necessary. The auditor’s report
should then be modified, ‘except for’, limitation on scope.
■ However, if sufficient evidence is obtained the auditor’s report should be unmodified.
■ An ‘emphasis of matter’ paragraph would not be appropriate because this matter is not one of significant
uncertainty.
Tutorial note: An uncertainty in this context is a matter whose outcome depends on future actions or events not
under the direct control of Jinack.
2006
■ If the 2005 auditor’s report is qualified ‘except for’ on grounds of limitation on scope there are two possibilities for
the inventory figure as at 30 September 2005 determined on completion of the reconstruction exercise:
(1) it is not materially different from the inventory figure reported; or
(2) it is materially different.
■ In (1), with the limitation now removed, the need for qualification is removed and the 2006 auditor’s report would
be unmodified (in respect of this matter).
■ In (2) the opening position should be restated and the comparatives adjusted in accordance with IAS 8 ‘Accounting
Policies, Changes in Accounting Estimates and Errors’. The 2006 auditor’s report would again be unmodified.
Tutorial note: If the error was not corrected in accordance with IAS 8 it would be a different matter and the
auditor’s report would be modified (‘except for’ qualification) disagreement on accounting treatment.

第3题：

(b) Assuming that Thai Curry Ltd claims relief for its trading loss against total profits under s.393A ICTA 1988,calculate the company’s corporation tax liability for the year ended 30 September 2005. (10 marks)

正确答案：

第4题：

I'm Joe． I-m twelve years old． I like September very much． September 9th is my birthday， and my father's birthday is in September，too．We have a birthday party ev-ery year． Teachers Day is in September， too． And I can play with all my teachers． So September is my favorite． What about you?

( )21．1t is Joe's________ birthday this year．

A． twelve

B．twelfth

C． ninth

D． nine

正确答案：B

第5题：

(b) Seymour offers health-related information services through a wholly-owned subsidiary, Aragon Co. Goodwill of

$1·8 million recognised on the purchase of Aragon in October 2004 is not amortised but included at cost in the

consolidated balance sheet. At 30 September 2006 Seymour’s investment in Aragon is shown at cost,

$4·5 million, in its separate financial statements.

Aragon’s draft financial statements for the year ended 30 September 2006 show a loss before taxation of

$0·6 million (2005 – $0·5 million loss) and total assets of $4·9 million (2005 – $5·7 million). The notes to

Aragon’s financial statements disclose that they have been prepared on a going concern basis that assumes that

Seymour will continue to provide financial support. (7 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 and financial statements of Seymour Co for the year ended

30 September 2006.

NOTE: The mark allocation is shown against each of the three issues.

正确答案：
(b) Goodwill
(i) Matters
■ Cost of goodwill, $1·8 million, represents 3·4% consolidated total assets and is therefore material.
Tutorial note: Any assessments of materiality of goodwill against amounts in Aragon’s financial statements are
meaningless since goodwill only exists in the consolidated financial statements of Seymour.
■ It is correct that the goodwill is not being amortised (IFRS 3 Business Combinations). However, it should be tested
at least annually for impairment, by management.
■ Aragon has incurred losses amounting to $1·1 million since it was acquired (two years ago). The write-off of this
amount against goodwill in the consolidated financial statements would be material (being 61% cost of goodwill,
8·3% PBT and 2·1% total assets).
■ The cost of the investment ($4·5 million) in Seymour’s separate financial statements will also be material and
should be tested for impairment.
■ The fair value of net assets acquired was only $2·7 million ($4·5 million less $1·8 million). Therefore the fair
value less costs to sell of Aragon on other than a going concern basis will be less than the carrying amount of the
investment (i.e. the investment is impaired by at least the amount of goodwill recognised on acquisition).
■ In assessing recoverable amount, value in use (rather than fair value less costs to sell) is only relevant if the going
concern assumption is appropriate for Aragon.
■ Supporting Aragon financially may result in Seymour being exposed to actual and/or contingent liabilities that
should be provided for/disclosed in Seymour’s financial statements in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.
(ii) Audit evidence
■ Carrying values of cost of investment and goodwill arising on acquisition to prior year audit working papers and
financial statements.
■ A copy of Aragon’s draft financial statements for the year ended 30 September 2006 showing loss for year.
■ Management’s impairment test of Seymour’s investment in Aragon and of the goodwill arising on consolidation at
30 September 2006. That is a comparison of the present value of the future cash flows expected to be generated
by Aragon (a cash-generating unit) compared with the cost of the investment (in Seymour’s separate financial
statements).
■ Results of any impairment tests on Aragon’s assets extracted from Aragon’s working paper files.
■ Analytical procedures on future cash flows to confirm their reasonableness (e.g. by comparison with cash flows for
the last two years).
■ Bank report for audit purposes for any guarantees supporting Aragon’s loan facilities.
■ A copy of Seymour’s ‘comfort letter’ confirming continuing financial support of Aragon for the foreseeable future.

第6题：

4 (a) Explain the auditor’s responsibilities in respect of subsequent events. (5 marks)

Required:

Identify and comment on the implications of the above matters for the auditor’s report on the financial

statements of Jinack Co for the year ended 30 September 2005 and, where appropriate, the year ending

30 September 2006.

NOTE: The mark allocation is shown against each of the matters.

正确答案：
4 JINACK CO
(a) Auditor’s responsibilities for subsequent events
■ Auditors must consider the effect of subsequent events on:
– the financial statements;
– the auditor’s report.
■ Subsequent events are all events occurring after a period end (i.e. reporting date) i.e.:
– events after the balance sheet date (as defined in IAS 10); and
– events after the financial statements have been authorised for issue.
Events occurring up to date of auditor’s report
■ The auditor is responsible for carrying out procedures designed to obtain sufficient appropriate audit evidence that all
events up to the date of the auditor’s report that may require adjustment of, or disclosure in, the financial statements
have been identified.
■ These procedures are in addition to those applied to specific transactions occurring after the period end that provide
audit evidence of period-end account balances (e.g. inventory cut-off and receipts from trade receivables). Such
procedures should ordinarily include:
– reviewing minutes of board/audit committee meetings;
– scrutinising latest interim financial statements/budgets/cash flows, etc;
– making/extending inquiries to legal advisors on litigation matters;
– inquiring of management whether any subsequent events have occurred that might affect the financial statements
(e.g. commitments entered into).
■ When the auditor becomes aware of events that materially affect the financial statements, the auditor must consider
whether they have been properly accounted for and adequately disclosed in the financial statements.
Facts discovered after the date of the auditor’s report but before financial statements are issued
Tutorial note: After the date of the auditor’s report it is management’s responsibility to inform. the auditor of facts which
may affect the financial statements.
■ If the auditor becomes aware of such facts which may materially affect the financial statements, the auditor:
– considers whether the financial statements need amendment;
– discusses the matter with management; and
– takes appropriate action (e.g. audit any amendments to the financial statements and issue a new auditor’s report).
■ If management does not amend the financial statements (where the auditor believes they need to be amended) and the
auditor’s report has not been released to the entity, the auditor should express a qualified opinion or an adverse opinion
(as appropriate).
■ If the auditor’s report has been released to the entity, the auditor must notify those charged with governance not to issue
the financial statements (and the auditor’s report thereon) to third parties.
Tutorial note: The auditor would seek legal advice if the financial statements and auditor’s report were subsequently issued.
Facts discovered after the financial statements have been issued
■ The auditor has no obligation to make any inquiry regarding financial statements that have been issued.
■ However, if the auditor becomes aware of a fact which existed at the date of the auditor’s report and which, if known
at that date, may have caused the auditor’s report to be modified, the auditor should:
– consider whether the financial statements need revision;
– discuss the matter with management; and
– take appropriate action (e.g. issuing a new report on revised financial statements).

第7题：

(ii) Audit work on after-date bank transactions identified a transfer of cash from Batik Co. The audit senior has

documented that the finance director explained that Batik commenced trading on 7 October 2005, after

being set up as a wholly-owned foreign subsidiary of Jinack. No other evidence has been obtained.

(4 marks)

Required:

Identify and comment on the implications of the above matters for the auditor’s report on the financial

statements of Jinack Co for the year ended 30 September 2005 and, where appropriate, the year ending

30 September 2006.

NOTE: The mark allocation is shown against each of the matters.

正确答案：
(ii) Wholly-owned foreign subsidiary
■ The cash transfer is a non-adjusting post balance sheet event. It indicates that Batik was trading after the balance
sheet date. However, that does not preclude Batik having commenced trading before the year end.
■ The finance director’s oral representation is wholly insufficient evidence with regard to the existence (or otherwise)
of Batik at 30 September 2005. If it existed at the balance sheet date its financial statements should have been
consolidated (unless immaterial).
■ The lack of evidence that might reasonably be expected to be available (e.g. legal papers, registration payments,
etc) suggests a limitation on the scope of the audit.
■ If such evidence has been sought but not obtained then the limitation is imposed by the entity (rather than by
circumstances).
■ Whilst the transaction itself may not be material, the information concerning the existence of Batik may be material
to users and should therefore be disclosed (as a non-adjusting event). The absence of such disclosure, if the
auditor considered necessary, would result in a qualified ‘except for’, opinion.
Tutorial note: Any matter that is considered sufficiently material to be worthy of disclosure as a non-adjusting
event must result in such a qualified opinion if the disclosure is not made.
■ If Batik existed at the balance sheet date and had material assets and liabilities then its non-consolidation would
have a pervasive effect. This would warrant an adverse opinion.
■ Also, the nature of the limitation (being imposed by the entity) could have a pervasive effect if the auditor is
suspicious that other audit evidence has been withheld. In this case the auditor should disclaim an opinion.

第8题：

30 September 2005 should be submitted, and advise the company of the penalties that will be due if

the return is not submitted until 31 May 2007. (3 marks)

(ii) State the date by which Thai Curry Ltd’s corporation tax liability for the year ended 30 September 2005

should be paid, and advise the company of the interest that will be due if the liability is not paid until

31 May 2007. (3 marks)

正确答案：

(c) Self-assessment tax return
(1) Thai Curry Ltd’s self-assessment corporation tax return for the year ended 30 September 2005 must be submitted by
30 September 2006.
(2) If the company does not submit its self-assessment tax return until 31 May 2007, then there will be an automatic fixed
penalty of ￡200 since the return is more than three months late.
(3) There will also be an additional corporation tax related penalty of ￡4,415 (44,150 × 10%) being 10% of the tax unpaid,
since the self-assessment tax return is more than six months late.
Corporation tax liability
(1) Thai Curry Ltd’s corporation tax liability for the year ended 30 September 2005 must be paid by 1 July 2006.
(2) If the company does not pay its corporation tax until 31 May 2007, then interest of ￡3,035 (44,150 at 7·5% = 3,311
× 11/12) will be charged by HM Revenue & Customs for the period 1 July 2006 to 31 May 2007.

第9题：

(ii) Briefly explain the implications of Parr & Co’s audit opinion for your audit opinion on the consolidated

financial statements of Cleeves Co for the year ended 30 September 2006. (3 marks)

正确答案：
(ii) Implications for audit opinion on consolidated financial statements of Cleeves
■ If the potential adjustments to non-current asset carrying amounts and loss are not material to the consolidated
financial statements there will be no implication. However, as Howard is material to Cleeves and the modification
appears to be ‘so material’ (giving rise to adverse opinion) this seems unlikely.
Tutorial note: The question clearly states that Howard is material to Cleeves, thus there is no call for speculation
on this.
■ As Howard is wholly-owned the management of Cleeves must be able to request that Howard’s financial statements
are adjusted to reflect the impairment of the assets. The auditor’s report on Cleeves will then be unmodified
(assuming that any impairment of the investment in Howard is properly accounted for in the separate financial
statements of Cleeves).
■ If the impairment losses are not recognised in Howard’s financial statements they can nevertheless be adjusted on
consolidation of Cleeves and its subsidiaries (by writing down assets to recoverable amounts). The audit opinion
on Cleeves should then be unmodified in this respect.
■ If there is no adjustment of Howard’s asset values (either in Howard’s financial statements or on consolidation) it
is most likely that the audit opinion on Cleeves’s consolidated financial statements would be ‘except for’. (It should
not be adverse as it is doubtful whether even the opinion on Howard’s financial statements should be adverse.)
Tutorial note: There is currently no requirement in ISA 600 to disclose that components have been audited by another
auditor unless the principal auditor is permitted to base their opinion solely upon the report of another auditor.

第10题：

22． ________birthday isn't in September．

A． Joe's

B． Joe's father' s

C． Joe's mother's

D． My

正确答案：C

Text 1 The longest bull run in a century of artmarket history ended on a dramatic note with a sale of 56 works by Damien Hirst,Beautiful Inside My Head Forever,at Sotheby's in London on September 15t

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