(b) Explain the matters you should consider before accepting an engagement to conduct a due diligence review

of MCM. (10 marks)

(ii) the strategy of the business regarding its treasury policies. (3 marks)

(Marks will be awarded in part (b) for the identification and discussion of relevant points and for the style. of the

report.)

(c) Discuss the ways in which budgets and the budgeting process can be used to motivate managers to

endeavour to meet the objectives of the company. Your answer should refer to:

(i) setting targets for financial performance;

(ii) participation in the budget-setting process. (12 marks)

1 Oliver Hoppe has been working at Hoopers and Henderson accountancy practice for eighteen months. He feels that

he fits in well, especially with his colleagues and has learnt a lot from them. However, he feels that the rules and

regulations governing everyday activities and time keeping are not clear.

Oliver does not get on well with his line manager, David Morgan. There appears to be a clash of personalities and

reluctance on David Morgan’s part to deal with the icy atmosphere between them after David was asked by one of

the accounting partners to give Oliver a job. For the past three months Oliver has gone to lunch with his fellow workers

and always returned to work with them or before them. In fact they all have returned to work about ten minutes late

on several previous occasions. After the third time, Oliver was called into David Morgan’s office and given an oral

warning about his time keeping.

Oliver was not permitted to argue his case and none of the other staff who returned late were disciplined in this way.

On the next occasion the group was late returning from lunch, David Morgan presented Oliver with a written warning

about his time keeping.

Yesterday, Oliver was five minutes late returning to work. His colleagues returned after him. David Morgan gave Oliver

notice and told him to work until the end of the week and then collect his salary, the necessary paperwork and to

leave the practice.

There is a partner responsible for human resources. Oliver has come to see the partner to discuss the grievance

procedures against David Morgan for his treatment and about what Oliver regards as unfair dismissal.

Required:

(a) Describe the six stages of a formal disciplinary procedure that an organisation such as Hoopers and

Henderson should have in place. (12 marks)

(b) Advise on the capital gains implications should Trent Limited’s old building be sold as proposed. Support your

advice with relevant calculations. (4 marks)

(ii) the directors agree to disclose the note. (4 marks)

4 (a) ISA 701 Modifications to The Independent Auditor’s Report includes ‘suggested wording of modifying phrases

for use when issuing modified reports’.

Required:

Explain and distinguish between each of the following terms:

(i) ‘qualified opinion’;

(ii) ‘disclaimer of opinion’;

(iii) ‘emphasis of matter paragraph’. (6 marks)

(c) Explain how the use of activity-based techniques may benefit Taliesin Ltd. (5 marks)

(c) State the tax consequences for both Glaikit Limited and Alasdair if he borrows money from the company, as

proposed, on 1 January 2006. (3 marks)

久期缺口的定义是什么？