UK easy marks

Question 1

Partner rotation

Answer 1

Listed- 5 years (+ 2 years with audit committee approval)
Non-listed- 10 years

Question 2

Fee dependancy

Answer 2

Listed- 10%
Non-listed- 15%

Non audit services fees are restricted to 70% of last 3 years fee on average.

Question 3

Internal audit

Answer 3

ISA 610 allows external auditors to use internal audit function for assistance. UK doesn’t allow for this.

Question 4

Going concern

Answer 4

Considered 12 months from report rather then from fin statements.

Question 5

Administration

Answer 5

Insolvency practitioner appointed in hopes of rescuing company.
-Members less likely to lose investment
-Creditors more likely to get paid

Question 6

Wrongful & fraudulent trading

Answer 6

Wrongful= No reasonable prospect of avoiding liquidation (CIVIL)
Fraudulent= Trading with intention to defraud creditors (CRIMINAL)

Both could be personally liable for company debts and disqualification 2