题目内容
After a period of expansion into several overseas markets and some structural decentralisation, Loho Company was considering its internal audit and internal control needs. Although privately owned and therefore not subject to listing rules, Loho’s auditors had often suggested that a formal internal audit function would be beneficial.
The launch of several new products and a rapid increase in exports had raised a number of problems at Loho. These included problems in meeting order deadlines, whilst a number of operational constraints had meant that some orders had been delivered to customers late. The increase in overseas business had also, according to Sonja Tan, the financial director, increased the overall risk profile of the business. Credit risk had risen substantially as had a range of risks associated with exporting and overseas investment. In addition to a growth from 150 to 600 employees in its home country, Loho also had recruited a further 200 people overseas in order to facilitate business in those countries.
As part of her continuing professional development (CPD), Sonja Tan, the finance director who was also a professional accountant, had been to a seminar on improving internal controls (IC). She believed that at this point in its growth, Loho could benefit from tighter internal controls. Speaking about this to the board on her return from the seminar, she reminded her colleagues that sound internal controls could only provide ‘reasonable assurance’ and that any IC system had inherent limitations and could never be totally effective whatever changes were made to improve them. This came as a surprise to some board members who assumed, because internal controls were often very expensive, that they should be guaranteed to be fully effective.
Required:
(a) Construct the case for establishing an internal audit function at Loho Company. (10 marks)
(b) Explain the reasons why many internal controls can never be guaranteed to be fully effective and discuss why ICs being ‘very expensive’ are no guarantee of their effectiveness. (9 marks)
(c) The finance director Sonja Tan learned about improved internal controls as part of her continuing professional development (CPD).
Required:
Explain the advantages of continuing professional development (CPD) for professional accountants such as finance director Sonja Tan. (6 marks)
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Section B – TWO questions ONLY to be attempted
The independent board of governors (an independent oversight body comprised of local residents, parents and other concerned citizens) of the state-funded Chambon school for 11–16 year old children met to consider its most recent set of public examination results. A key responsibility placed upon the school’s governors is the delivery, to its local government authority, of a report on exam performance in a full and timely manner. A report on both the exam results and the reasons for any improvement or deterioration over previous years are required from the governors each year. Accordingly, this annual meeting on exam performance was always considered to be very important. Although the school taught the national curriculum (a standard syllabus taught in all schools in the country) as required of it, the exam results at Chambon had deteriorated in recent years and on this particular occasion, they were very poor indeed. In order to address the weaknesses in the school, Chambon’s budget had increased in recent years and a number of new teachers had been employed to help improve results. Despite this, exam performance continued to fall. A recent overspend against budget was funded through the closure of part of the school library and the sale of a sports field.
One member of the board of governors was Sally Murol. She believed that the local government authority might attempt to close Chambon school if these exam results were reported with no convincing explanation. One solution to avoid this threat, she said, was to either send the report in late or to select only the best results and submit a partial report so the school’s performance looked better than it actually was. There is no central computerised exam results service in the country in which Chambon is located by which the local authority could establish the exam performance at Chambon school.
A general feeling of the governors’ meeting was that perhaps the school needed some new leadership and it was time to remove the existing headteacher. Mr Besse had been in the role for many years and his management style. was thought to be ineffective. He was widely liked by staff in the school because he believed that each teacher knew best how to manage their teaching, and so he tried not to intervene wherever possible. Mr Besse had sometimes disagreed with the governors when they suggested changes which could be made to improve exam performance, preferring to rely on what he believed were tried and tested ways of managing his teaching staff. He was thought to be very loyal to longstanding colleagues and had a dislike of confrontation.
Required:
(a) Explain, using evidence from the case, the characteristics which identify Chambon school as a public sector organisation and assess how its objectives as a public sector organisation have not been met. (10 marks)
(b) Explain the roles of a board of governors in the governance of Chambon school and discuss, in the context of Sally Murol’s suggestion, the importance of transparency in the board of governors dealings with the local government authority. (9 marks)
(c) Discuss the potential advantages to Chambon school of replacing the headteacher in seeking to address its problems. (6 marks)
唐代中枢官制实行的是_____制。
急性白血病化学治疗后以达到持续完全缓解的指标是
秘书学是一门_____的应用学科。
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