ACCA F8 Ch 2 Flashcards
1
Q
What are the elements of the Audit expectations gap?
A
- Reasonablness gap
- Deficient standards gap
- Deficient performance gap
2
Q
What are the Audit exemptions (CA 2006)?
A
- Small or dormant (s475)
- 10% of memebers (s476)
- Small groups (s479)
- Subsidaries if 1) all member agree, 2) parents garantee liabilities & 3) sub included in latest consols (s479A)
3
Q
What are the requirements to be a Small Private company & LLP (CA 2006)?
A
- 2015: Turnover £6.5m; TAs £3.26m; Employees 50
- 2016: Turnover £10.2m; TAs £5.1m; Employees 50
- Year of grace
4
Q
How can you appoint an Auditor?
A
- General rule: 1) >50% AGM
- By Directors if: 1) first auditor or 2) filling casualm vacancy
- By Secretary of State if: 1) no Auditor appointed
- Pirvate Companies: 1) deemed reappointment
5
Q
What are the exemptions of an Auditors deemed reappointment?
A
- Articles require actual reappointment
- Director’s appointment
- 5% of members
6
Q
How can an Auditor be removed?
A
- Members in GM
- Ordinary resolution with special notice
- Resignation in writing a statement of no circumstances to registed office
7
Q
What are an Auditors general rights?
A
- Receive info & explainations for audit
- Receive notice & attend GMs
- Receive copies of written resolutions
- Access to books & records
- To speak about audit at GMs
8
Q
What are the Auditors rights on resignation?
A
- Company circulates notice of circumstances
- Convene EGM and speak
9
Q
What are an Auditors rights on removal?
A
- Circulateion of statement of circumstances or read it at GM
- Speak at GM
10
Q
What are the Auditor’s duties in making a report
A
- Disclose whether they believe accounts are: in accordance with 1) FRF & 2) CA 2006 & IAS Regs; & 3) true and fair
- Disclose whether they believe director’s report is 1) consistent with accounts
11
Q
RAPID D
A
- R - proper Returns from branches
- A - accounts Agree to underlying records
- P - Proper accounting records maintaned
- I - all Information & explaination recieved
- D - information disclosed with accounts id consistent
- D - Director’s benefits disclosed in accounts or aucit report
12
Q
Eligibility to be an Auditor?
A
- Member of RSB
- Eligible under RSB’s rules
- Not an officer or employee
- …….
13
Q
What disclosures of the Auditor are needed/
A
- Auditor’s remuneration (even if IAS/IFRS)
14
Q
What are the argumenst For and Against Accounting standards being self-regulated?
A
- For: Accountancy organisations 1) had ‘public interest’ & 2) had the greater understanding
- Against: 1) Globalisation & 2) Enron etc.
15
Q
What were the 1991 key developments for UK Auditing Standards?
A
- APB
- SASs
16
Q
What were the 2004 key developments for UK Auditing Standards?
A
- End of self-regulation of Auditing in UK
- APB brought under FRC control
- ISAs replace SASs
