Q1

The Code of Ethics for Professional Accountants contains a specific requirement that must be met by the incoming auditor when there is a change in appointment. State the requirement and the paragraph number in APES 110 for the requirement.

Q2

1. What two matters are to be considered by the auditor and the client when agreeing the basis on which the audit is to be performed(2 mark)

2. Is the following statement True or False?

"For the purposes of Australian Auditing Standards, the applicable financial reportingframework provides the suitable criteria for auditing the financial report."(1 MARK)

3. With reference to the appropriate paragraph of ASA 210, state four factors that are relevant to the auditor's determination of the acceptability of the financial reporting framework chosen by the client.(4 MARKS)

Q3

When considering whether or not to accept a new audit engagement, the auditor must be satisfied that he/she is able to meet certain requirements. State three such requirements that the auditor must be satisfied about.

Q4

1. In your own words define business risk(2 MARKS)

2. Give three examples of business risks(3 MARKS)

3. Is the following statement True or False?

"Not all business risks result in risks of material misstatement in the financial reports"(1 MARK)

4. Below are two statements that describe business risks. Consider each statement separately. And answer the following questions: Is the business risk described in the statement one that will result in a material misstatement in the current period.(2 MARKS)

Statement 1: Company A produces mobile telephones. Its best-selling product is the e-phone. A competitor has recently introduced a new product that performs much better than e-phone and has a lower price.

Statement 2: Company B also produces telephones. The majority of its key customer relationships are closely held by one senior executive, Kevin Boyd. A board member of Company B questioned the wisdom of this relationship on the grounds that, if Kevin Boyd resigned and went to work elsewhere in the industry, some of Company B's key customers may follow him to a competitor.

Note: to answer this question please write the number of the statement followed by either "Yes" or "No".

Q5

You are planning the audit of Fish 4 U Pty Ltd, large South Australian aquaculture firm. This is the first year that your firm has audited this company and you are undertaking some research in order to understand the entity and its environment. Access* the IBISWorld Industry Report A0200 which is titled, "Aquaculture in Australia" and address the following:

1) What is the size (by revenue) of the industry?

2) What is the expected growth in this industry over the next 5 years?

3) Which Product and Service is the largest segment of the market, and what is its share of the total?

4) State the key external drivers of this industry?

5)Open the tab labelled, "Operating Conditions" and answer the following questions:

a. What is the level of capital intensity?

b. What is the level of technological change?

c. What is the level of revenue volatility?

d. What is the level of regulation?

.

*To access this report,

(1) Go to the University of Adelaide Library Catalogue and type in "IBIS World Industry Research Reports".

(2) Select IBIS WORLD. Industry Research reports

(3) Select "IBIS WORLD"

(4) At the top of the screen there are three tabs. Click on the tab titled "Industry Market Research" From the drop down menus select Australia Industry Reports (ANZIC)"

(5) The screen provides access to industry reports. The top left grouping of reports is titled, "Agriculture, Forestry and Fishing". Scroll down the menu till you come to a

report titled, "A0200-Aquaculture". Select this report.

Use the tabs on the left of the screen titled, "About this industry",

"Industry at a glance", "Industry performance", Industry outlook", "Products and

markets", "Competitive landscape", "Major companies", "Operating conditions",

"Key statistics", to retrieve information.

Q6

ASA315 provides examples of the factors that an auditor will take into account at the planning stage of an audit. Withreference to the appropriate paragraphof ASA315, provide one examples of: (a) an industry factor; (b) a regulatory factor; and (c) an other factor.