Accounting 9706 · AS & A Level · Regulatory and ethical considerations

Regulatory and ethical considerations — practice question

XY Limited has been operating for many years. Before the end of year audit, the chairman announced that profit for the year ended 31 March 2016 had risen from $86000 to $174000. Several matters came to light during the audit.
(a)[2]

Explain what stewardship means.

(b)[2]

Explain why an end of year audit is carried out.

(c)[1]

State whether the published audit report will be qualified or unqualified.

(d(i))[9]

Describe how points 1, 2 and 3 should be treated under the relevant accounting standards.

(d(ii))[6]

Analyse how any correction affects the profit for the year ended 31 March 2016.

(e)[5]

Assess the likely implications of a qualified audit report.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Managers are responsible for controlling resources

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