AAA-INT March/June 2023 (22/23 syllabus)
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It is 1 July 20X5. You are a manager in the audit department of Garrick & Co, a firm of
Exhibits
Chartered Certified Accountants. You are assigned to the audit of Encore Co which
1. Partner’s email has a financial year ending 30 September 20X5, and is a new audit client of your firm.
Encore Co designs and builds boats which are used in the fishing industry. Each boat
2. Background information
is created to a specific customer order.
3. Notes from meeting
The following exhibits, available on the left-hand side of the screen, provide
4. Inventory information relevant to the question:
5. Finance director requests
1. Partner’s email – an email which you have received from Isabella Phoenix, the
audit engagement partner.
Requirement
2. Background information – information relevant to the audit planning.
Requirement (50 marks)
3. Notes from meeting – summary of matters discussed at a recent meeting between
the company’s finance director and the audit engagement partner.
Response Options
4. Inventory – a note from the audit engagement partner containing details relevant to
Briefing notes planning the audit of inventory.
5. Finance director requests – two requests regarding an additional service and a
Spreadsheet
loan guarantee they would like Garrick & Co to consider.
This information should be used to answer the question requirement within your
chosen response option(s).
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Respond to the instructions in the email from the audit engagement partner.
Note: The split of the mark allocation is shown in Exhibit 1 - Partner’s email.
(40 marks)
Professional marks will be awarded for the demonstration of skill in communication, analysis and
evaluation, professional scepticism and judgement, and commercial acumen in your answer.
(10 marks)
AAA-INT March/June 2023 (22/23 syllabus)
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It is 1 July 20X5. You are a manager in Gloop & Co, a firm of Chartered Certified
Exhibits
Accountants which offers a range of assurance services.
1. Meeting notes
The managing director of Slaindar Co, which is not currently a client of Gloop & Co,
2. Cash flow forecast
has contacted you with a request to undertake an independent review of a cash flow
forecast for Slaindar Co.
Requirements
Requirements (25 marks) The following exhibits, available on the left-hand side of the screen, provide
information relevant to the question:
Response Options
Word Processor 1. Meeting notes – notes from a meeting with Aaron Slaindar.
2. Cash flow forecast – a cash flow forecast and supporting notes and assumptions to
Spreadsheet
be used in support of a loan application.
This information should be used to answer the question requirements within your
chosen response option(s).
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Using Exhibit 1:
(a) Evaluate the matters in respect of quality management to be considered by Gloop & Co before
accepting Slaindar Co as a client of your firm.
Note: You have already performed the necessary client identification procedures.
(12 marks)
It is now 1 August 20X5 and Aaron has retired without withdrawing a lump sum and instead will continue
to receive dividends as retirement income. On this basis, and having satisfied client acceptance
procedures, Gloop & Co have accepted the engagement to review the cash flow forecast for the $500,000
expansion funding.
The finance controller has prepared a cash flow forecast for submission to the bank. The cash flow
forecast covers the three years to 30 June 20X8.
The finance controller is an experienced qualified accountant and his forecasting in prior years has been
very accurate.
Using the information in Exhibits 1 and 2:
(b) Evaluate the assumptions used by management and the completeness of the cash flow forecast
prepared, explaining why particular assumptions should be challenged and approached with
professional scepticism.
(8 marks)
Professional marks will be awarded for the demonstration of skill in analysis and evaluation, professional
scepticism and judgement, and commercial acumen in your answer.
(5 marks)
AAA-INT March/June 2023 (22/23 syllabus)
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It is 1 July 20X5 and you are a manager in the audit department of Crawley & Co. You
Exhibits
have recently been assigned to the audit of Violet Co, a company which produces
1. Violet Co catering supplies such as sandwiches and cakes, which are sold to cafes and
restaurants. Its financial year ended on 31 March 20X5.
2. Branson Co
You have also been asked to assist with reviewing the auditor’s report for a different
Requirements
audit client, Branson Co, which is a listed entity operating in the pharmaceutical
Requirements (25 marks) industry, with a financial year ended 31 May 20X5. Branson Co is part of a
multinational group and its parent company is Grantham Co. Your firm audits the
Response Options Grantham Group and all components of the Group.
Word Processor
The following exhibits, available on the left-hand side of the screen, provide
information relevant to the question:
1. Violet Co - provides details of audit completion matters which have been brought to
your attention by the audit supervisor.
2. Branson Co - provides details of audit completion matters which have been
brought to your attention by the audit supervisor and an extract from the Key Audit
Matters (KAM).
This information should be used to answer the question requirements within the
response option provided.
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Using Exhibit 1:
(a)(i) Discuss and justify whether the two internal control matters should be included in
your communication to Those Charged With Governance and Management of Violet Co in
respect of deficiencies in internal control.
(5 marks)
(a)(ii) Using the file note prepared by the audit supervisor recommend the matters to be included in
your report to Those Charged With Governance of Violet Co, and explain the reason for their
inclusion.
(7 marks)
Using Exhibit 2:
(b) Critically appraise the key audit matters (KAM) extract from the auditor’s report on the
financial statements of Branson Co for the year ended 31 May 20X5.
Note: You are NOT required to re-draft the extract from the auditor’s report.
(8 marks)
Professional marks will be awarded for the demonstration of skill in analysis and evaluation, professional
scepticism and judgement, and commercial acumen in your answer.
(5 marks)
