(c) During the year Albreda paid $0·1 million (2004 – $0·3 million) in fines and penalties

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health and safety regulations. These amounts have not been separately disclosed but included in cost of sales.

(5 marks)

Required:

For each of the above issues:

(i) comment on the matters that you should consider; and

(ii) state the audit evidence that you should expect to find,

in undertaking your review of the audit working papers and financial statements of Albreda Co for the year ended

30 September 2005.

NOTE: The mark allocation is shown against each of the three issues.

参考答案:

(c) Fines and penalties(i) Matters■ $0·1 million represents 5·6% of profit before tax and is therefore material. However, profit has fallen, andcompared with prior year profit it is less than 5%. So ‘borderline’ material in quantitative terms.■ Prior year

ACCACAT