Advanced Audit and Assurance (International)
Monday 3 June 2013
Time allowed Reading and planning: Writing:
15 minutes 3 hours
This paper is divided into two sections: Section A – BOTH questions are compulsory and MUST be attempted Section B – TWO questions ONLY to be attempted Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall.
The Association of Chartered Certified Accountants
Paper P7 (INT)
This is a blank page. The question paper begins on page 3.
Section A – BOTH questions are compulsory and MUST be attempted 1 You are an audit manager in Hound & Co, responsible for the audit of Parker Co, a new audit client of your firm. You are planning the audit of Parker Co’s financial statements for the year ending 30 June 2013, and you have just attended a meeting with Ruth Collie, the finance director of Parker Co, where she gave you the projected results for the year. Parker Co designs and manufactures health and beauty products including cosmetics. You have just received an email from Harry Shepherd, the audit engagement partner: To: Audit manager From: Harry Shepherd, Partner Subject: Parker Co Hello I understand you met with Ruth Collie at Parker Co recently and that you are planning the forthcoming audit. To bring me up to date on this new client, I would like you to use the information obtained in your meeting to prepare briefing notes for my use in which you: (a) Perform preliminary analytical procedures and evaluate the audit risks to be considered in planning the audit of the financial statements, and identify and explain any additional information that would be relevant to your evaluation; and (24 marks) (b) Discuss any ethical issues raised and recommend the relevant