2022年ACCA-CAT模擬考試題（一）

2022年ACCA/CAT模擬考試題姓名:年級:學號:題型選擇題填空題解答題判斷題計算題附加題總分得分評卷人得分x(c)Discussthewaysinwhichbudgetsandthebudgetingprocesscanbeusedtomotivatemanagerstoendeavourtomeettheobjectivesofthecompany.YouranswershouIdreferto:settingtargetsforfinancialperformance;(ii)participationinthebudget-settingprocess.(12marks)正確答案：(c)Examiner1sNote:OThetopicofmanageriaImotivationandbudgetinghasbeenasubjectofdiscussionforanumberofyears.ThereareIinksDheretothetopicsofperformancemeasurementandresponsibiIityaccounting.DiscussionshouIdbefocusedontheareaofbudgetsandthebudgetingprocess,asspecifiedinthequestion.SettingtargetsforfinancialperformanceIthasbeenreasonablyestabIishedthatmanagersrespondbetterinmotivationandperformancetermstoaclearlydefined,[quantitativetargetthantotheabsenceofsuchtargets.However,budgettargetsmustbeacceptedbytheresponsibIe□managersiftheyaretohaveanymotivationaIeffect.AcceptanceofbudgettargetswiIIdependonseveraIfactors,includingthepersonaIityofanindividuaImanagerandthequaIityofcommunicationinthebudgetingprocess.OTheIeveIofdifficultyofthebudgettargetwiIIaIsoinfIuencetheIeveIofmotivationandperformance.BudgettargetsthatareseenasaverageoraboveaveragewiIIincreasemotivationandperformanceuptothepointwheresuchtargetsareseenasOimpossibletoachieve.Beyondthispoint,personaIdesiretoachieveaparticuIarIeveIofperformancefallsoffsharpIy.CarefuIthoughtmustthereforegointoestabIishingbudgettargets,sineethebestresultsinmotivationandperformancetermswiIIarisefromthemostdifficultgoaIsthatindividuaImanagersarepreparedtoaccept4.ThefollowingissuesarisingduringthefinalaudithavebeennotedonascheduIeofpointsforyourattention:(a)InearIy2007achemicaIIeakagefromrefrigerationunitsownedbyLamontcausedcontaminationofsomeofitsproperty.Lamonthasincurred$003miIIionincIeanupcosts,$0■6miIIioninmodernisationoftheunitstopreventfutureleakageanda$30,000finetoareguIatoryagency.Apartfromthefine,whichhasbeenexpensed,thesecostshavebeencapitalisedasimprovements.(7marks)Required:Foreachoftheaboveissues:commentonthemattersthatyoushouldconsider;and(ii)statetheauditevidencethatyoushouIdexpecttofind,inundertakingyourreviewoftheauditworkingpapersandfinancialstatementsofLamontCofortheyearended31March2007.NOTE:ThemarkaIIocationisshownagainsteachofthethreeissues.正確答案：3LAMONTCOO(a)ChemicaIIeakage□(i)Matters■$30,000fineisveryimmateriaI(just1/4%profitbeforetax).Thisisrevenueexpenditureanditiscorrectthatit-Ihasbeenexpensedtotheincomestatement.$0■3miIIionrepresents0■6%totaIassetsand2■5%profitbeforetaxandisnotmateriaIonitsown.$0■6millionrepresents1■2%totaIassetsand5%profitbeforetaxandisthereforemateriaItothefinanciaIstatements.The$0-3millioncIean-upcostsshouIdnothavebeencapitaIisedastheconditionofthepropertyisnotimproved□ascomparedwithitsconditionbeforetheleakageoccurred.AlthoughnotmateriaIinisolationthisamountshouId□beadjustedforandexpensed,therebyreducingtheaggregateofuncorrectedmisstatements.■Itmaybecorrectthat$0-6miIIionincurredinmodernisingtherefrigerationunitsshouldbecapitalisedasamajor_|overhauI(IAS16Property,PlantandEquipment).However,anypartsscrappedasaresultofthemodernisation□shouIdbetreatedasdisposaIs(i.e.writtenofftotheincomestatement).■Thecarryingamountoftherefrigerationunitsat31March2007,includingthe$0-6miIIionformodernisation,□shouIdnotexceedrecoverableamount(i.e.thehigherofvaIueinuseandfairvaIueIesscoststosell).Ifitdoes,□anaIIowancefortheimpairmentIossarisingmustberecognisedinaccordancewithIAS36ImpairmentofAssets.O(ii)AuditevidenceAbreakdown/analysisofcostsincurredonthecIean-upandmodernisationamountingto$0-3millionand$006millionrespectiveIy.AgreementoflargestamountstoinvoicesfromsuppIiers/consuItants/sub-contractors,etcandsettIementthereof[tracedfromthecashbooktothebankstatement.PhysicaIinspectionoftherefrigerationunitstoconfirmtheirmodernisationandthattheyareinworkingorder.(Do□theycontainfrozenfish?)SampIeofcomponentsselectedfromthenon-currentassetregistertracedtotherefrigerationunitsandinspected□toensurecontinuingexistence.$30,000penaItynoticefromthereguIatoryagencyandcorrespondingcashbookpayment/paymentperthebank□statement.WrittenmanagementrepresentationthattherearenofurtherpenaItiesthatshouIdbeprovidedforordisciosedother□thanthe$30,000thathasbeenaccountedfor.7、4(a)Explainthemeaningoftheterm4workingcapitaIcycle5foratradingcompany.(4marks)正確答案：(a)TheworkingcapitaIeyeIeiIIustratesthechangingmake-upofworkingcapitaIinthecourseofthetradingoperationsofa□business:1Purchasesaremadeoncreditandthegoodsgointoinventory.~|2InventoryissoIdandconvertedintoreceivabIes3Creditcustomerspaytheiraccounts口4CashisusedtopaysuppIiers.8、(b)ExplainbyreferencetoHiraLtd5sIosspositionwhyitmaybebeneficiaIforitnottoclaimanycapitaIaIIowancesfortheyearending31March2007.SupportyourexpIanationwithrelevantcaIcuIations.(6marks)正確答案：(b)TheadvantageofHiraLtdnotclaiminganycapitaIaIIowances□Intheyearending31March2007HiraLtdexpectstomakeataxadjustedtradingIoss,beforedeductionofcapitaI□aIIowances,of￡55,000andtosurrenderthemaximumamountpossibleoftradinglossestoBeIgroveLtdandDovedaIeLtd._|Forthefirstninemonthsoftheyearfrom1ApriI2006to31December2006HiraLtdisinaIossreIiefgroupwithBeIgrove□Ltd.ThemaximumsurrendertoBeIgroveLtdforthisperiodistheIowerof:□-theavaiIableIossof￡41,250(￡55,000x9/12);and□-theprofitschargeabIetocorporationtaxofBeIgroveof￡28,500(￡38,000x9/12).i.e.￡28,500.Thisleaveslossesof￡12,750(￡41,250-￡28,500)unreIieved.HFortheremainingthreemonthsfrom1January2007to31March2007HiraLtdisaconsortiumcompanybecauseatIeast75%ofitssharecapitaIisownedbycompanies,eachofwhichownatIeast5%.Itcansurrender￡8,938(￡55,000x3/12二］x65%)toDovedaIeLtdand￡4,812(￡55,000x3/12x35%)toBeIgroveLtdasbothcompanieshavesufficienttaxabIeprofitstooffsettheIosses.Accordingly,therearenoIossesremainingfromthethree-monthperiod._|TheunreIievedlossesfromthefirstninemonthsmustbecarriedforwardasHiraLtdhasnoincomeorgainsinthatyearorthepreviousyear.However,theIossescannotbecarriedforwardbeyond1January2007(thedateofthechangeof_|ownershipofHiraLtd)ifthereisamajorchangeinthenatureorconductofthetradeofHiraLtd.EvenifthelossescanbeHearriedforward,theearIiestyearinwhichtheycanbereIievedistheyearending31March2009asHiraLtdisexpectedto□makeatradinglossintheyearending31March2008.□AnycapitaIaIIowancescIaimedbyHiraLtdintheyearending31March2007wouIdincreasethetaxadjustedtradingIoss□forthatyearandconsequentIytheunreIievedIossesarisinginthefirstninemonths.ZlIfthecapitaIaIIowancesarenotcIaimed,thewhoIeofthetaxwrittendownvaIuebroughtforwardof￡96,000wouIdbe□carriedforwardtotheyearending31March2008thusincreasingthecapitaIaIIowancesandthetaxadjustedtradingIoss,□forthatyear.BynotclaiminganycapitalaIIowances,HiraLtdcaneffectivelytransferacurrentperiodtradingloss,which□wouldbecreatedbycapitaIaIIowances,of￡24,000(25%x￡96,000)fromtheyearending31March2007tothefollowing□yearwhereitcanbesurrenderedtothetwoconsortiummembers.9\19Whatisthecompany,sreturnonsharehoIdersJequity?A15/40=37?5%B20/100=20%C15/100=15%D20/150=13?3%正確答案：C10\Jamesdiedon22January2015.HehadmadethefollowinggiftsduringhisIifetime:OnpayableinOnOn9October2007,acashgiftofOnpayableinOnOn14May2013,acashgiftof￡420,000tohisdaughter.2August2013,agiftofapropertyvaIuedat￡260,000toatrust.NoIifetimeinheritancetaxwaspayabIeinrespectofthisgiftbecauseitwascoveredbytheniIrateband.BythetimeofJames5deathon22January2015,thepropertyhadincreasedinvaIueto￡310,000.On22January2015,James5estatewasvaluedat￡870,000.UnderthetermsofhiswiII,JamesIefthisentireestatetohischiIdren.TheniIratebandofJames5wifewasfullyutiIisedwhenshediedtenyearsago.TheniIratebandforthetaxyear2007-08is￡300,000,andforthetaxyear2013-14itis￡325,000.Required:CalculatetheinheritancetaxwhichwillbepayabIeasaresultofJames5death,andstatewhowiIIberesponsibIeforpayingthetax.(6marks)ExplainwhyitmighthavebeenbeneficiaIforinheritancetaxpurposesifJameshadIeftaportionofhisestatetohisgrandchiIdrenratherthantohischiIdren.(2marks)ExplainwhyitmightbeadvantageousforinheritancetaxpurposesforapersontomakeIifetimegiftsevenwhensuchgiftsaremadewithinsevenyearsofdeath.Notes:YouranswershouIdincIudeacalculationofJames'inheritancetaxsavingfrommakingthegiftofpropertytothetruston2August2013ratherthanretainingthepropertyuntiIhisdeath.YouarenotexpectedtoconsiderIifetimeexemptionsinthispartofthequestion.(2marks)正確答案：James-InheritancetaxarisingondeathLifetimetransferswithinsevenyearsofdeath14May2013ValuetransferredAnnualexemptions2013-142012-13PotentiallyexempttransferInheritancetaxliability296,000(working)atnil%118,000at40%James,daughterwillberesponsibleforpayingtheinheritancetaxof￡47,200.2August2013ChargeablelifetimetransferInheritancetaxliability260,000at40%14May2013ValuetransferredAnnualexemptions2013-142012-13PotentiallyexempttransferInheritancetaxliability296,000(working)atnil%118,000at40%James,daughterwillberesponsibleforpayingtheinheritancetaxof￡47,200.2August2013ChargeablelifetimetransferInheritancetaxliability260,000at40%Thetrustwillberesponsibleforpayingtheinheritancetaxof￡104,000.DeathestateChargeableestateInheritancetaxliability870,000at40%420,000(3,000)414,000047,20047,200260i104,000870,000S48.000ThepersonaIrepresentativesofJames'taxof￡348,000.estatewiIIberesponsibIeforpayingtheinheritanceWorking-AvaiIableniIratebandNilratebandChargeablelifetimetransfer9October2007ValuetransferredAnnualexemptions2007-082006-07Chargeabletransfer325,00035,000(3,000)(3Q00)(29,000)296,000SkippingagenerationavoidsafurtherchargetoinheritancetaxwhenthechiIdrendie.GiftswiIIthenonIybetaxedoncebeforebeinginheritedbythegrandchiIdren,ratherthantwice.(1)Evenifthedonordoesnotsurviveforsevenyears,taperreIiefwiIIreducetheamountofIHTpayabIeafterthreeyears.ThevaIueofpotentiaIIyexempttransfersandchargeabIeIifetimetransfersarefixedatthetimetheyaremade.Jamesthereforesavedinheritancetaxof￡20,000((310,000-260,000)at40%)bymakingtheIifetimegiftofproperty.11\(b)AsanewIy-quaIifiedCharteredCertifiedAccountant,youhavebeenaskedtowritean4ethicscolumnJforatraineeaccountantmagazine.InparticuIar,youhavebeenaskedtodraftguidanceonthefollowingsheIpIine:sheIpIine:sheIpIine:questionsaddressedtothemagazine'sheIpIine:WhatgiftsorhospitalityareacceptabIeandwhendotheybecomeaninducement?(5marks)Required:Foreachofthethreequestions,explainthethreatstoobjectivitythatmayariseandthesafeguardsthatshouldbeavaiIabletomanagethemtoanacceptabIeIeveI.NOTE:ThemarkaIIocationisshownagainsteachofthethreequestionsabove.正確答案：(b)DraftguidanceO(i)GiftsandhospitalityGiftsandhospitaIitymaybeofferedasaninducementi.e.tounduIyinfIuenceactionsordecisions,encourageiIIegaIor[dishonestbehaviourortoobtainconfidentiaIinformation.Anofferofgiftsand/orhospitaIityfromacIientordinarilygivesrisetothreatstocompIiancewiththefundamentaIprincipIes,forexample:seIf-interestthreatstoobjectivityand/orconfidentialitymaybecreatedifagiftfromacIientisaccepted;intimidationthreatstoobjectivityand/orconfidentiaIitymayarisethroughthepossibiIityofsuchoffersbeingmade□publicanddamagingthereputationoftheprofessionaIaccountant(orcIosefamilymember)._|ThesignificanceofsuchthreatswiIIdependonthenature,vaIueandintentbehindtheoffer.Theremaybenosignificant□threattocompIiancewiththefundamentaIprinciplesifareasonabIeandinformedthirdpartywouIdconsidergiftsandnhospitaIitytobeclearlyinsignificant.Forexample,iftheofferofgiftsorhospitalityismadeinthenormaIcourseof□businesswithoutthespecificintenttoinfIuencedecisionmakingortoobtaininformation.2]IfevaIuatedthreatsareotherthancIearIyinsignificant,safeguardsshouIdbeconsideredandappIiedasnecessarytoOeliminatethemorreducethemtoanacceptabIeIeveI.[OffersofgiftsandhospitalityshouldnotbeacceptedifthethreatscannotbeeIiminatedorreducedtoanacceptable□levelthroughtheappIicationofsafeguards.□AsthereaIorapparentthreatstocompIiancewiththefundamentaIprinciplesdonotmerelyarisefromacceptanceof□aninducementbut,sometimes,mereIyfromthefactoftheofferhavingbeenmade,additionalsafeguardsshouIdbe□adopted.Forexample:■immediateIyinforminghigherIeveIsofmanagementorthosechargedwithgovernancethataninducementhas□beenoffered;■informingthirdparties(e.g.aprofessionalbody)oftheoffer(afterseekingIegaIadvice);■advisingimmediateorcIosefamiIymembersofreIevantthreatsandsafeguardswheretheyarepotentiallyin□positionsthatmightresu11inoffersofinducements(e.g.asaresultoftheirempIoymentsituation);and■informinghigherIeveIsofmanagementorthosechargedwithgovernancewhereimmediateorcIosefamiIy□membersareemployedbycompetitorsorpotentiaIsuppIiersofthatorganisation.12、(ii)jobenIargement;(5marks)正確答案：(ii)JobenIargementisoftenreferredtoas'horizontaljobenlargement'andisaimedatwideningthecontentofjobsbyincreasingthenumberofoperationsinwhichthejobholderisinvoIvedandisanothermethodbywhichempIoyeesatBaiIey5smightbecomemoreinvoIved.ItreducestheIeveIofrepetitionandduIInessbyprovidingahorizontaIextensiontoactivity,reducingmonotonyandboredominherentintheoperationsatBailey5s.□13、(c)Define'retirementbyrotation,andexplainitsimportanceinthecontextofRoshandCompany.(5marks)正確答案：(c)Retirementbyrotation.DefinitionRetirementbyrotationisanarrangementinadirector'scontractthatspecifieshisorhercontracttobeIimitedtoaspecificperiod(typicaIIythreeyears)afterwhichheorshemustretirefromtheboardorofferhimseIf(beingeligibIe)forre-eIection.ThedirectormustbeactiveIyre-electedbackontotheboardtoserveanotherterm.ThedefaultisthatthedirectorretiresHunIessre-eIected.ImportanceofZURetirementbyrotationreducesthecostofcontractterminalionforunderperformingdirectors.Theycansimplynotbere-electedaftertheirtermofofficeexpiresandtheywiIIberequiredtoIeavetheserviceoftheboardasaretiree(depending[oncontractterms).□itencouragesdirectors'performance(theyknowtheyareassessedbyshareholdersandreconsideredeverythreeyears)andfocusestheirmindsupontheimportanceofmeetingobjectivesinIinewithshareholders5aims.□Itisanopportunity,overtime,torepIacetheboardmembershipwhi1stmaintainingmediumtermstabiIityofmembershipPI(oneortwoatatime).□AppIiedtoRoshRetirementbyrotationwouldenabletheboardofRoshtobechangedovertime.ThereisevidencethatsomedirectorsmayhavestayedIongerthanisideaIbecauseofIinkswithotherboardmembersgoingbackmanyyears.14、(b)ThedirectorsofCarverLtdareawarethatsomeofthecompany5sshareholderswanttoreaIisethevaIueintheirsharesimmediateIy.AccordingIy,insteadofinvestingintheofficebuiIdingortheshareportfoliotheyareconsideringtwoaIternativestrategieswhereby,followingthesaIeofthecompany'sbusiness,apaymentwiIIbemadetothecompany'ssharehoIders.Liquidatethecompany.ThepaymentbytheIiquidatorwouIdbe￡126pershare.(ii)Thepaymentofadividendof￡125persharefollowingwhichaIiquidatorwiIIbeappointed.ThepaymentbytheIiquidatortotheshareholderswouldthenbe￡1pershare.ThecompanyoriginalIyissued20,000￡1ordinarysharesatparvaIueto19membersoftheCutIerfamiIy.Followinganumberofgiftsandinheritancestherearenow41sharehoIders,aIIofwhomarefamiIymembers.ThedirectorshaveaskedyoutoattendameetingtosetoutthetaximpIicationsofthesetwoaIternativestrategiesforeachofthetwomaingroupsofshareholders:adultswithsharehoIdingsofmorethan500sharesandchiIdrenwithsharehoIdingsof200sharesorIess.Required:PreparenotesexpIaining:theamountchargeabIetotax;andtheratesoftaxthatwiIIappIyinrespectofeachofthetwostrategiesforeachofthetwogroupsofshareholdersreadyforyourmeetingwiththedirectorsofCarverLtd.YoushouIdassumethatnoneofthesharehoIderswiIIhaveanycapitalIosseseitherinthetaxyear2007/08orbroughtforwardasat5ApriI2007.(10marks)Note:YoushouIdassumethattheratesandaIIowancesforthetaxyear2006/07wiIIcontinuetoappIyfortheforeseeablefuture.正確答案：(b)NotesformeetingwithdirectorsofCarverLtdLiquidationofCarverLtdTheamountreceivedfromtheliquidatorrepresentsacapitalreceiptAcapitalgainmustbecomputedbydeductingthecostofthesharesfromtheproceedsreceived.Costc/ftheshares：￡1￡1Marketvalueatdawofinheritance￡1￡1MarketvalueatdawofinheritanceMarketvalueatdaleofgiftAcquiredbywayofgiftwheregiftreliefwasclaimed：Acquiredbywayofinheritance：Acquiredbywayofgiftwheregiftreliefwasnotclaimed：Thecapitalgainisreducedbytaperrelief.Taperrelief：BusinessassetralesaremailablebecauseCarverLtdisanunquotedtradingcompany.SharesownedforlessthanoneyearWholeofthegainchargedtotaxSharesownedforbetweenoneandtwoyearsHalfofthegainchargedtotaxSharesownedformorethantwoyearsQuarterofthegainchargedtotaxWhereshareshaveteeninherited,orreceivedbywayofgift,fromaspouse,thetwoperiodsofownershipareaddedtogetfier.Thetaperedgainsarereducedbytheannualexemptionof￡8.800.Theremainingamountcftaxablegamswillbetaxedasiftheyareanadditionalamountofixomeusingthefollowingtaxrates：Gainsfallingintothelowerratetaxtend：10%Gainsfallingintothebasicratetaxband：20%Gainsfallingintothehigherratetaxband：40%AdultsTherateoftaxwilldependontheindividual'sleveloftaxableincomeandthesizeofshareholding,butpartatleastislikelytofallwithinthehigherrateband.Themaximumgamwillto￡62,500(500x(￡126-￡1))subjecttotaperrelief.ChildrenThemaximumgainwillbe￡25.0001200x(￡126-￡1))subjecttotaperrdief.Gainsarelikelytofallintothelowerandbasicratetaxbands.Effectiveratesoftax：Gainsfallingintothelowerratetaxband：Gainsfallingintothelowerratetaxband：Gainsfallingintothebasicratetaxband：Gainsfallingintothehigherratetaxband：Sharesheldfor1year1-2years>2years10%5%2-5%20%10%5%40%20%10%PaymentofadividendfollawQdbyliquidationofCarverLtdGeneralrulesredividendsDividendsreceivedwillbegrossedupat10/9andtaxedasthetopsliceoftheindividual"income.laxrates：Incomefallingintothelowerorbasicratetaxbands：10%Incomefallingintothehigherrateband：32：/2%A10%taxcreditisavailabletoreducethetaxliability.Thetaxcreditcannottorefundedincash.Thereisnoincometaxliablitywherethedividendincomefallsintothelowerorbasicratetaxbands.AdultsTherateoftaxwilldependontheindividuaPsleveloftaxableincomeandthesizeoftheirshareholdingbutpartatleastislikelytofallwithinthehigherrateband(500x￡125x1Q/9-￡69.444).Theeffectiverateoftaxondividendincomefallingintothehigherratebandis25%oftheamountreceived.ChildrenEachchildwillreceivemaximumtaxabledividendincomeof￡27.778(200x￡125x100).Itrslikelythatthechildrenwillhavelittleornootherincomesuchthattherewillbenoincometaxtopayonthedividendsreceived.Thetaxcreditwillnotberepaid.LiquidationofCarverLtdTheamountreceivedfromtheliquidatorrepresentsacapitalreceiptNogamwillariseunlessanindividualacquiredsharesatatimewhentheirmarketvaluewaslessthan￡1.OtherwisG.acapitallosswillarisebeingtheexcessoftheindividual'scostinthesharesovertheamountreceived.Thelosswillbeoffsetagainsttheindividual'scapitalgainsinthetaxyear2007/08orfuturegains.□□15、(ii)IdentifythepointsthatmustbeconfirmedandanyactionnecessaryinorderforcapitaItreatmenttoappIytothetransaction.(4marks)正確答案：(ii)EnsuringcapitaItreatmentiForthecapitaItreatmenttoappIy,anumberofconditionsneedtobesatisfiedsuchthatthefollowingpointsneedtobeZUconfirmed.n-ThebusinessofAcruxLtdconsistswhoIlyormainlyofthecarryingonofatradeasopposedtothemakingofIinvestments.-SpicaisUKresidentandordinariIyresidentdespiteIivinginboththeUKandSolaris.-Thetransactionisbeingcarriedoutforthepurposeofthecompany5stradeandisnotpartofaschemeintendedtoavoidtax.ThisislikelytobethecaseasHMRCacceptthatamanagementdisagreementovertherunningof_Jthecompanyhasanadverseeffectontherunningofthebusiness.11naddition,SpicamusthaveownedthesharesforatIeastfiveyearssothetransactionmustnottakepIaceuntiI]1October2008.16、(ii)Fromtheinformationprovidedabove,recommendthematterswhichshouIdbeincIudedas4findingsfromtheaudit5inyourreporttothosechargedwithgovernance,andexplainthereasonforjWhiIebudgettargetsthatareseenastoodifficultwiIIfaiItomotivatemanagerstoimprovetheirperformance,thesameis□trueofbudgettargetsthatareseenasbeingtooeasy.Whenbudgettargetsareeasy,managersareIikelytooutperform.the□budgetbutwiIIfaiItoreachtheIeveIofperformancethatmightbeexpectedintheabsenceofabudget.~|0neconsequenceoftheneedfordemandingordifficultbudgettargetsisthefrequentreportingofadversevariances.ItisOimportantthatthesearenotusedtoIaybIameinthebudgetarycontroIprocess,sineetheyhaveamotivationaI(orpIanning)[originratherthananoperationaIorigin.ManageriaIrewardsystemsmayneedtorewardalmostachieving,ratherthan□achieving,budgettargetsifmanagersaretobeencouragedbyreceivingfinancialincentives.[Participationinthebudget-settingprocess□A'top-down'approachtobudgetsettingIeadstobudgetsthatareimposedonmanagers.WheremanagerswithinanorganisationarebeIievedtobehaveinawaythatisconsistentwithMcGregor5sTheoryXperspective,imposedbudgetsmayUimproveperformance,sineeacceptingthebudgetisconsistentwithreducedresponsibiIityandavoidingwork.ItisalsopossiblethatacceptanceofimposedbudgetsbymanagerswhoareresponsiblefortheirimplementationandachievementisdiminishedbecausetheyfeeItheyhavenotbeenabIetoinfIuencebudgettargets.Suchaviewisconsistent[withMcGregor5sTheoryYperspective,whichhoIdsthatmanagersnaturaIIyseekresponsibiIityanddonotneedtobetightIy[controIIed.Accordingtothisview,managersrespondweIItoparticipationinthebudget-settingprocess,sineebeingabIetoOinfIuencethebudgettargetsforwhichtheywiIIberesponsibleencouragestheiracceptance.Aparticipativeapproachtobudget-settingisaIsoreferredtoasa'bottom-up'approach.inpractice,manyorganisationsadoptabudget-settingprocessthatcontainseIementsofbothapproaches,withsenior^managementprovidingstrategicIeadershipofthebudget-settingprocessandothermanagementtiersprovidinginputinterms_JofidentifyingwhatispracticaIandofferingdetailedknowledgeoftheirareaoftheorganisation.2、3(a)FinanciaIstatementsoftencontainmateriaIbaIancesrecognisedatfairvaIue.Forauditors,thisleadstoadditionaIauditrisk.Required:Discussthisstatement.(7marks)theirncIusion.(7marks)正確答案：(ii)ControlweaknessISA260containsguidanceonthetypeofissuesthatshouIdbecommunicated.Oneofthemattersidentifiedisacontrol-IweaknessinthecapitaIexpendituretransactioneyeIe.Theassetsforwhichnoauthorisationwasobtainedamountto003%oftotaIassets(225,000/78millionx100%),whichiscIearIyimmateriaI.However,regardIessofmateriaIity,theauditorshouldensurethattheweaknessisbroughttotheatt