Professional Level – Options Module, Paper P7 (UK) Advanced Audit and Assurance (United Kingdom) June 2009 Answers 1

Marks
3
(a)
(i)
Leases
Generally 1 mark per matter/evidence point:
Matters:
–
Correct calculation and assessment of materiality
–
Classification of lease
–
SSAP 21 indicators of finance lease
–
Finance charge
–
Depreciation
–
Disclosure
Evidence:
–
Lease clauses re risk and reward
–
Recalculate present value of minimum lease payments v fair value
–
Recalculate depn and finance charge
–
Cash book for payments
–
Review of disclosures
–
Split creditor < 1 year; > 1 year
1
/
2
mark ref SSAP 21
Maximum marks
8
(ii)
Financial assets
Generally 1 mark per matter/evidence point:
Matters:
–
Correct calculation and assessment of materiality
–
Classification as held for trading
–
Assets shown at fair value – could be subjective
–
Disclosure
Evidence
–
Agree purchase price
–
Agree fair value
–
Recalculate gain
–
Review of disclosures in notes
–
Review of disclosure in OFR/other information published with financial statements
1
/
2
mark ref FRS 26 and FRS 29
Maximum marks
5
(b)
Interim financial information
Generally 1 mark per procedure:
–
Comparisons with past data e.g. to preceding period, to corresponding interim last year, to last audited accounts
–
Comparisons to anticipated results
–
Comparisons of non financial data/ratios
–
Comparisons to similar entities
–
Disaggregation of data
1
/
2
ref ISRE 2410
Maximum marks
4
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