Nesud Co has credit sales of $45 million per year and on average settles accounts with tra

第1题

Hummingbird Scents Co （Hummingbird) manufactures and sells luxury toiletries; they have be

Hummingbird Scents Co (Hummingbird) manufactures and sells luxury toiletries; they have been trading for over 20 years and the company’s year end is 30 September 2014. Hummingbird sells products to trade customers via its own website; this represents 60% of revenue. Remaining revenue is generated by contracts to supply toiletries to hotels. Below is a description of the sales system.

Hotel revenue

The hotel revenue is made up of four key customers. Hummingbird has one sales clerk, Brenda, who maintains all aspects of this revenue stream; Brenda receives customer orders, raises sales invoices and processes payments. In raising invoices, the sales system automatically inserts the online trade customer prices for products. However, each hotel customer has contracted prices which are lower than the online prices and hence Brenda manually edits the invoices prior to despatch.

Online revenue

New trade customers are set up in the sales ledger master file upon passing suitable credit checks, and a credit limit is set at this stage by the finance director. Customers place online orders up to their pre-set credit limit; they receive an email confirmation and the sales order interfaces into the despatch system. The order number is linked to the customer account number. Goods are despatched daily with a goods despatched note which is referenced to the sales order number but are not sequentially numbered. Hummingbird used to despatch goods via a reliable national courier company. However, to reduce costs they have changed to a cheaper local courier and some orders have been delivered to customers late.

Trade customers’ sales invoices are automatically generated by the system on the day the online order is placed. The prices are inserted in accordance with the website rates. Occasionally Hummingbird makes special offers or discounts sales; when this occurs the master file data has to be amended to ensure that the correct prices are used on invoices. This task is usually performed by a senior sales ledger clerk.

Revenue and receivables records

On a monthly basis statements are sent to the hotel customers; a number of trade customers have been requesting monthly statements and Hummingbird is considering this request. The company only reconciles the sales ledger control account at the end of September in order to verify the year-end balance.

Required:

(a) As the external auditor of Hummingbird Co, write a report to management in respect of the sales system described above which:

(i) Identifies and explains SEVEN deficiencies in the sales system; and

(ii) Provides a recommendation to address each of these deficiencies.

A covering letter IS required.

Note: Up to two marks will be awarded within this requirement for presentation and the remaining marks will be split equally between each part. (16 marks)

(b) Describe substantive procedures the auditor should perform. to confirm Hummingbird Co’s revenue. (4 marks)

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第2题

Moonstar Co is a property development company which is planning to undertake a $200 millio

n commercial property development. Moonstar Co has had some difficulties over the last few years, with some developments not generating the expected returns and the company has at times struggled to pay its finance costs. As a result Moonstar Co’s credit rating has been lowered, affecting the terms it can obtain for bank finance. Although Moonstar Co is listed on its local stock exchange, 75% of the share capital is held by members of the family who founded the company. The family members who are shareholders do not wish to subscribe for a rights issue and are unwilling to dilute their control over the company by authorising a new issue of equity shares. Moonstar Co’s board is therefore considering other methods of financing the development, which the directors believe will generate higher returns than other recent investments, as the country where Moonstar Co is based appears to be emerging from recession.

Securitisation proposals

One of the non-executive directors of Moonstar Co has proposed that it should raise funds by means of a securitisation process, transferring the rights to the rental income from the commercial property development to a special purpose vehicle. Her proposals assume that the leases will generate an income of 11% per annum to Moonstar Co over a ten-year period. She proposes that Moonstar Co should use 90% of the value of the investment for a collateralised loan obligation which should be structured as follows:

– 60% of the collateral value to support a tranche of A-rated floating rate loan notes offering investors LIBOR plus 150 basis points

– 15% of the collateral value to support a tranche of B-rated fixed rate loan notes offering investors 12%

– 15% of the collateral value to support a tranche of C-rated fixed rate loan notes offering investors 13%

– 10% of the collateral value to support a tranche as subordinated certificates, with the return being the excess of receipts over payments from the securitisation process

The non-executive director believes that there will be sufficient demand for all tranches of the loan notes from investors. Investors will expect that the income stream from the development to be low risk, as they will expect the property market to improve with the recession coming to an end and enough potential lessees to be attracted by the new development.

The non-executive director predicts that there would be annual costs of $200,000 in administering the loan. She acknowledges that there would be interest rate risks associated with the proposal, and proposes a fixed for variable interest rate swap on the A-rated floating rate notes, exchanging LIBOR for 9·5%.

However the finance director believes that the prediction of the income from the development that the non-executive director has made is over-optimistic. He believes that it is most likely that the total value of the rental income will be 5% lower than the non-executive director has forecast. He believes that there is some risk that the returns could be so low as to jeopardise the income for the C-rated fixed rate loan note holders.

Islamic finance

Moonstar Co’s chief executive has wondered whether Sukuk finance would be a better way of funding the development than the securitisation.

Moonstar Co’s chairman has pointed out that a major bank in the country where Moonstar Co is located has begun to offer a range of Islamic financial products. The chairman has suggested that a Mudaraba contract would be the most appropriate method of providing the funds required for the investment.

Required:

(a) Calculate the amounts in $ which each of the tranches can expect to receive from the securitisation arrangement proposed by the non-executive director and discuss how the variability in rental income affects the returns from the securitisation. (11 marks)

(b) Discuss the benefits and risks for Moonstar Co associated with the securitisation arrangement that the non-executive director has proposed. (6 marks)

(c) (i) Discuss the suitability of Sukuk finance to fund the investment, including an assessment of its appeal to potential investors. (4 marks)

(ii) Discuss whether a Mudaraba contract would be an appropriate method of financing the investment and discuss why the bank may have concerns about providing finance by this method. (4 marks)

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第3题

Not until Mary but also John____ credit for what they have done in search of this case

A.have been given

B.has been given

C.are given

D.do give

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第4题

Over 60 million persons in the United States own a credit card. For these millions of Amer

icans a credit card is "coined freedom". It has had effect of increasing consumption possibilities for households by allowing them to purchase thousands of dollars of merchandise. ranging from autos. clothing, to electrical appliances. The widespread use of creditcard nowadays staggers the imagination to the point where one wonders whether the total amount of consumption spending each year would be the same if this "plastic money" were not around, Credit cards have also been of significant importance to the national economy.Businessmen have been encournged to expand plant and equipment and hire additionat personnel to meet the heavy demand for their products, The tendency of employment and income would rise significantly. Unfortunately the ease with which buyers can increase their purchase with credit cards have caused them to overlook the additional costs.Purchase on credit cards are postponed payments. Buy-now pay later encourages buyers to use credit cards ,extencively.Since the buyer is in effect borrowing money for a special purposer he must expect to pay an interest charge. Interest is the price of using money over a long period of time. A close analysis of the use for credit cards for heavy purchases will show that the buyer has added to the cost of making these purchases. It must also be kept in mind that unpaid monthly balances means added interest charges. Furthermore. the use of credit cards will add to the most purpose of the product since the shopkeeper does not receive the money at the time of the purchase, Shopkeepers might add on the cost of handing credit cards to the bill. One of the arguments against the use of credit cards has been that those who do pay cash at the time if purchase finance the use of a credit card by another person.This is so, the argument runs, because the price of a product will include the cost of another persons use of a credit card.

Which of the following is NOT true about credit cards？

A.It can encourage great sums of consumption

B.Shopkeepers, among others object to the use of credis cards because they add on the cost of the merchandise

C.Credit card holders actually pay for their shopping goods afer the purchase has been completed

D.The national economy enjoys extensive growth because of the use of credit cards

What is the main topic of the passage？A.Advantages and disadvantages of credit cards

B.Economic growth hacked up by the use of credit cards

C.Arguments against the use of ecredit cards

D.Credit cards make life easier

What are the arguments against the use of credit cards？A.It may lead to the overgrowth of the national economy.

B.The delay in the payment of shopping goods may bring damage to shopkeeprers’profits.

C.Some people may intentionally purchase goods that they cannot possbly aford

D.Those who pay by cash at the purehase will have to pay for the cost added to the product as the interest charge of credit cards

The writers purpose in this passage is to____.A.argue against credit card

B.deseribe a phenomenon

C.introduce us the disadvantage and advantage of credit card

D.propose an original viewpoint

请帮忙给出每个问题的正确答案和分析，谢谢！

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第5题

Passage 1Back in the carefree days of the Noughties boom, Britain’s youngsters were swept

Passage 1

Back in the carefree days of the Noughties boom, Britain’s youngsters were swept along by the buy-now-pay-later culture embraced by consumers up and down the country. During a decade of near？full employment, many _1_ quickly from one job—and one credit card—to another, and rainy days were such a distant memory that they _2_ seemed worth saving for. But with the supply of cheap credit _3_ up and a generation of school and university leavers about to _4_ the recession-hit job market, thousands of young people with no memory of the early 1990s recession are shocked into the _5_ that the world of 2009 is very different. Katie Orme, 19，who lives in Birmingham, says she has decided never to get a credit card after seeing the problems that her parents and 22year-old sister have had with debt—just one of the _6_ lessons that she has had to learn. Orme finished her A-levels a year ago, and has been searching for a job—and living at home with her parents—ever since. She has had to _7_ on to support herself and is now on a 12-week internship (实习期）at the Prince’s Trust to improve her _8_ . The Trust says that the number of calls from _9_ people such as Orme has shot up by 50% over six months. “It’s so hard to get a job at the moment,” she says, “it’s better to go and get more qualifications so when more jobs are _10_ you will be better suited.”

A) sign

B) skipped

C) available

D) mostly

E) anxious

F) mug

G) hardly

H) remedy

I) realization

J) dynamic

K) resume

L) tough

M) neglected

N) drying

O) flood

第1空答案是：

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第6题

回答题 There was a time when any personal information that was gathered about us was typed

回答题

There was a time when any personal information that was gathered about us was typed on a piece of paper and（26）in a file cabinet．It could remain there for years and, often（27）, never reach the outside world．

Things have done a complete about-face since then．（28）the change has been the astonishingly（29）development in recent years of the computer．Today, any data that is（30）about us in one place or another--and for one reason or another--can be stored in a computer bank．It can then be easily passed to other computer banks．They are owned by individuals and by private businesses and corporations, lending（31）, direct mailing and telemarketing firms, credit bureaus, credit card companies, and（32）at the local, state, and federal level．

A growing number of Americans are seeing the accumulation and distribution of computerized data as a frightening（33）of their privacy．Surveys show that the number of worried Americans has been steadily growing over the years as the computer becomes increasingly（34）, easier to operate, and less costly to purchase and maintain．In 1970, a national survey showed that 37 percent of the people（35）felt their privacy was being invaded．Seven years later, 47 percent expressed the same worry．Arecent survey by a credit bureau revealed that the number of alarmed citizens had shot up to 76percent．

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第7题

accept , discount, against, dishonoured, attached , hypothecation, credit, draw, ownership

, amount

When a Letter of Credit has been confirmed, the agent bank in the seller's country usually asks for the shipping documents, and often corite to the seller to say that they are willing to【21】a draft on them for the【22】. This draft (another name for Bill of Exchange) is often【23】to the shipping documents and is called a Documentary Bill of Exchange. Banks often state that the seller can【24】on them for the amount of the Credit.

A buyer or his bank may ask the seller if he is willing to allow them a period of 30, 60, or 90 days to pay. They may write. "can you present your drafts for 60 d/s？" this is a form. of【25】and allows the buyer time to pay. The agent bank will normally accept a draft【26】documents, because they need them to make sure that the title to【27】has been transferred.

Some times the bank demands a letter of【28】so that they have the right to sell the goods if the Bill of Exchange is【29】, that is, if the buyer or his bank do not pay. This does not apply to irrevocable documentary credit.

However, the bank can【30】the Bill of Exchange by deducting the interest for the period the draft has to go before maturity.

(11)

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第8题

Why Companies Now Favour Cash A．Cheap and plentiful credit has powered the US economy for

Why Companies Now Favour Cash

A．Cheap and plentiful credit has powered the US economy for decades. But since the fi- nancial crisis of 2008， America has gone on a drastic debt diet. Just as families are pay- ing down credit-card debt and building up cash reserves， businesses large and small are learning to operate in an environment where cash once again is king. The economic shift has been dramatic; bank lending has dropped at a frightening rate. In 2009 the banking system notched （刻数） the largest decline in loans in the history of the Federal Deposit Insurance Corporation. Meanwhile， the amount of commercial and industrial loans has fallen 19 percent since the fall of 2008 —— back to the level of late 2006. Even the finan- cial sector has cut way back on debt.

B．Sorry about credit bubble， both companies and individuals spent and invested based on expectations of what they could borrow. Now they"re hoarding cash. The savings rate， near zero in 2007， rose to 3.3 percent in January. At the end of the September in 2009， the 376 members of the S&P 500 that aren"t utilities or financial firms had a record $820 billion in cash in their coffers （金库）， up more than 20 percent from the year be- fore， according to Standard & Poor"s.

C．The conventional wisdom holds that the tightening of credit is an obstacle to recovery. And for many businesses， especially small ones， the inability to pay off old debt or open new lines of credit can hinder expansion plans. But the economy isn"t fueled by debt alone. After all， in 2009， the economy experienced a sharp turn， from shrinking at a rate of 6.4 percent in the first quarter to growing at a rate of 5.9 percent in the fourth quarter —— all while private- sector credit reduced. More broadly， the embrace of cash could be beneficial. During the go- go years， it was common to hear theorists talk about the "discipline of debt".

D．On paper， high debt loads force managers （and homeowners） to make tough， swift decisions to stay solvent （有偿付能力的）. Break the contact， and you lose the company （or the house）. In reality， overextended （周转不灵的） borrowers are more likely to walk away from mortgages， or push companies into Chapter 11 bankruptcy protection. Amer- icans are now discovering that cash exerts a superior discipline. The real discipline of cash may be that it causes executives， consumers， and investors to think twice —— and to think about the long-term consequences —— before spending. The need for instant satis- faction is part of what created the current mess.

E. The ability to adapt rapidly remains one of America"s competitive advantages. And since the onset of the financial crisis， both consumers and businesses have embraced the new real- ity. After digging themselves out of $20，000 in debt in 2007， Susarmah Fater， her husband David —— a district manager at Staples —— and their four children did something radical: they became an all-cash household. "Bills like groceries， gas， and allowance are taken out every month and put into envelopes so that we know exactly where we are financially，" says Su- sannah. Consumer-oriented firms have pivoted （以……为中心旋转） rapidly to service new pay-as-you-go consumers like the Faters. ELayaway.com， based in Tallahassee， Fla.， and founded in 2005， offers its 75，000 customers the ability to buy products on installment plans （up to 13 months） from 1，000 merchants， including Apple and Amazon.com. The typical purchase is an electronics item with an average cost of $440 and a four-month payment term.

Cofounder Sergio Pinon notes the rise of a category of customers eLayaway calls "planners"，who pay for next winter"s snowblowers this summer.

F. Texas electricity provider First Choice Power in January launched a prepaid service called Control First. "In Texas， there are about a million households who have slim credit or no credit at all，" says company president Brian Hayduk. Without requiring a deposit or credit， customers are permitted to prepurchase a set amount of electricity —— say $100 per month.

The company installs a smart meter that lets people know how much they"ve used —— which spurs customers to manage their energy use more intelligently.

G. The rise of the cash economy has made businesses hesitant to make the type of capital expenditures they used to fund with debt —— big-ticket items like factories， expensive equipment， and new buildings. But it has made them more receptive to companies that offer efficiency and saving with little money down. At Boston-based EnerNOC， reve- nues nearly doubled last year. EnerNOC has two lines of business. On behalf of electric utilities， they supports companies that agree to reduce electricity use at times of peak demand in exchange for cash payments. And it installs submeters to measure buildings" energy consumption in microscopic detail， and then suggests ways to reduce demand.

"We sell the software and guarantee we"ll identify energy-savings opportunities worth twice what they pay us on an annual basis，" says CEO Tim Healy. "It"s very capital- light." In 2009 the number of company employees rose from about 330 to more than 400， and it projected revenue growth of $75 million （nearly 40 percent） in 2010.

H. Before the deluge， companies and investors chose the easy path of gaining returns by us- ing their balance sheet —— they"d borrow money to pay a dividend， or to purchase another company. But financial engineering has given way to business engineering. Kohlberg Kravis & Roberts， the huge leveraged-buyout firm that made profits through financial strategies during the credit boom， has built up a staff of in-house retail executives who work with com- panies" it owns， such as Dollar General and Toys "R" Us. Just as there are fewer no-money- down mortgages in the housing market， many of today"s buyouts are significantly less lever- aged. Since transactions that use less debt and more cash are less likely to go bankrupt， the greater use of cash is a basis for a more stable， more rational financial system. Stephen Ka- plan， a professor at the University of Chicago business school， notes that returns are poor for buyout fimds that make highly leveraged acquisitions during credit booms. When cheap debt is available on easy terms， "they do more marginal deals."

I. Of course， a fine line separates conservation from hoarding， and careful saving from miserliness （吝啬）. For many financial executives， the wholesale collapse of the credit markets in the fall of 2008 induced the same reaction that the anti-drug movie Scared Straight used to create among teenagers. "There"s a greater focus on liquidity and the preservation of cash for the unexpected than you had in the past，" says Seth Gardner， executive director of the Centre for Financial Excellence at Duke University"s Fuqua School of Business. Yet there are signs that corporate America is beginning to loosen the purse strings. Investment in equipment and software rebounded at an 18.4 percent an- nual rate in the fourth quarter of 2009. And S&P analyst Howard Silverblatt predicts that companies will start utilising their record cash piles on stock buybacks， dividends， and capital expenditures once they"re convinced the recovery is real.

People‘s traditional idea about the credit is that the tightening of it prevents the eco-nomic recovery.

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第9题

The man loves nature and the soil. That is why he has bought a piece of land in the co

A.had the trouble

B.taken the trouble

C.had the difficulty

D.taken the difficulty

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第10题

You are an audit senior of Beech & Co and have been allocated to the audit of Willow W

ands Co (Willow), a listed company which has been an audit client for eight years and specialises in manufacturing musical instruments.

Bethan Oak was the audit engagement partner for Willow and as she had completed seven years as the audit engagement partner, she has recently been rotated off the audit engagement. The current audit partner, Sandeep Pine, has suggested that in order to maintain a close relationship with Willow, Bethan should undertake the role of independent review partner this year. In addition Willow has requested that Bethan assist them by attending their audit committee meetings, as a non-executive director has recently left the company.

Willow has also asked Sandeep and the other partners at Beech & Co to help them in recruiting a new non-executive director.

The total fees received by Beech & Co for last year equated to 16% of the firm’s total fee income. The current year’s audit fee has not yet been confirmed, but along with taxation and other possible non-audit fees the total income from Willow this year could be greater than for last year. Last year’s audit fee was being paid monthly by Willow but no payments have been made for the last three months.

The audit manager for Willow has just announced that he is leaving Beech & Co to join Willow as the financial controller.

Required:

Using the information above:

(i) Identify and explain FIVE ethical threats which may affect the independence of Beech & Co’s audit of Willow Wands Co; and

(ii) For each threat explain how it might be reduced to an acceptable level.

Note: The total marks will be split equally between each part.

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