Pce Past Exam

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Professional Competency Examination 2
Tasman Travel

Date: Time Allowed: Instructions:

8 November 2005 6 hours This examination is in two parts: Part A: Part B: Compulsory — you MUST answer this question Answer ANY THREE questions

Summary of Paper:
Part A Compulsory – answer this question

Question 1
Part B

IFRS
Answer ANY THREE (3) questions

110 marks

Question 2 Question 3 Question 4 Question 5 Question 6

Valuation Corporate Governance Audit and Assurance Capacity Analysis Business Strategy Total Part B TOTAL

80 marks 80 marks 80 marks 80 Marks 80 marks 240 marks 350 marks

Copyright © 2005, Advanced Business Education Limited All 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 Advanced Business Education Limited.

Professional Competency Examination 2 Tasman Travel

Contents
Part A Question 1. Part B Question 2. Question 3. Question 4. Question 5. Question 6. Compulsory question____________________________________ 1 IFRS ..................................................................................................... 1 Answer ANY THREE questions____________________________ 2 Valuation .............................................................................................. 2 Corporate Governance......................................................................... 3 Audit and Assurance ............................................................................ 4 Capacity Analysis ................................................................................. 5 Business Strategy ................................................................................ 6

Professional Competency Examination 2 Tasman Travel

Part A

Compulsory question

Question 1. IFRS
(110 marks)

Scenario: The Board of Directors of Tasman Travel has agreed that the first fully IFRS compliant financial statements will be those produced for the year ended 30 June 2007. Work is currently underway to establish the effects of the transition to IFRS. You have recently been employed as Tasman Travel’s Financial Accountant and you are a member of the company’s IFRS Transitions Team. At the last Transitions Team Meeting it was decided that the next areas to be addressed would be: • the likely exemptions for retrospective application of IFRSs available to Tasman Travel under NZ IFRS1, and • the likely changes in Tasman Travel’s Accounting Policies on the adoption of NZ IFRS / NZ IAS. Peter Thompson, Tasman Travel’s CFO, has asked you to do a presentation at the next Transitions Team Meeting on the above topics. Prior to this meeting Peter has asked you to provide him with an update on your research. Your first task was to summarise the firm's major accounting policies, and this is reproduced in Resource 1, in the Additional Information in the Exam Day Resource Booklet. What you need to do: Prepare a memo to Peter Thompson with a summary of your research. Your memo should: • identify the exemptions for retrospective application of IFRSs that are applicable to Tasman Travel under NZ IFRS1 and a fully justified recommendation on which exemptions should be adopted, • identify the probable changes to Tasman Travel’s Accounting Policies on the adoption of NZ IFRS / NZ IAS, and • prepare an outline of the proposed presentation to the next Transitions Team Meeting. The length of your answer should be no more than 1,500 words. Note: ABEL may penalise any answer that exceeds the stated word limit.

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Professional Competency Examination 2 Tasman Travel

Part B

Answer ANY THREE questions

Question 2. Valuation
(80 marks)

Scenario: It is November 2005. Paul LaFrance, Tasman's Chief Executive Officer, has asked the merchant banking firm of ARMO Greggs Capital to provide an indicative valuation of the...
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