重磅!ACCA复习方法新鲜出炉!

正确答案：
(b) There are several benefits for Hugh Co in choosing a voluntary financial statement audit.
An annual audit will ensure that any material mistakes made by the part-qualified accountant in preparing the year end
financial statements will be detected. This is important as the directors will be using the year end accounts to review their
progress in the first year of trading and will need reliable figures to assess performance. An audit will give the directors comfort
that the financial statements are a sound basis for making business decisions.
Accurate first year figures will also enable more effective budgeting and forecasting, which will be crucial if rapid growth is to
be achieved.
The auditors are likely to use the quarterly management accounts as part of normal audit procedures. The auditors will be
able to advise Monty Parkes of any improvements that could be made to the management accounts, for example, increased
level of detail, more frequent reporting. Better quality management accounts will help the day-to-day running of the business
and enable a speedier response to any problems arising during the year.
As a by-product of the audit, a management letter (report to those charged with governance) will be produced, identifying
weaknesses and making recommendations on areas such as systems and controls which will improve the smooth running of
the business.
It is likely that Hugh Co will require more bank funding in order to expand, and it is likely that the bank would like to see
audited figures for review, before deciding on further finance. It will be easier and potentially cheaper to raise finance from
other providers with an audited set of financial statements.
As the business deals in cash sales, and retails small, luxury items there is a high risk of theft of assets. The external audit
can act as both a deterrent and a detective control, thus reducing the risk of fraud and resultant detrimental impact on the
financial statements.
Accurate financial statements will be the best basis for tax assessment and tax planning. An audit opinion will enhance the
credibility of the figures.
If the business grows rapidly, then it is likely that at some point in the future, the audit exemption limit will be exceeded and
thus an audit will become mandatory.
Choosing to have an audit from the first year of incorporation will reduce potential errors carried down to subsequent periods
and thus avoid qualifications of opening balances.

正确答案：
(a) The weaknesses of traditional budgeting processes include the following:
– many commentators, including Hope and Fraser, contend that budgets prepared under traditional processes add little
value and require far too much valuable management time which would be better spent elsewhere.
– too heavy a reliance on the ‘agreed’ budget has an adverse impact on management behaviour which can become
dysfunctional having regard to the objectives of the organisation as a whole.
– the use of budgeting as base for communicating corporate goals, setting objectives, continuous improvement, etc is seen
as contrary to the original purpose of budgeting as a financial control mechanism.
– most budgets are not based on a rational causal model of resource consumption but are often the result of protracted
internal bargaining processes.
– conformance to budget is not seen as compatible with a drive towards continuous improvement.
– budgeting has an insufficient external focus.

正确答案：