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关于南通有限公司国际业务的分析
跨国公司在全球金融业中扮演着重要的角色，因为它们在许多国家生产商品，关系着整个制造业。影响跨国公司业绩的因素有多种。这些因素包括：货币汇率的波动，东道国的政治经济稳定和公司的投资策略。
本文概述了英国的一间跨国公司的主要国际业务，南通有限公司(devro)。本文尝试着分析国际业务对南通有限公司的益处以及对其财务战略的影响。本文的第一部分将提供最佳的判断，以确定公司内部控制的类型，预计该公司已选定的地方。第二部分充分地说明，如何对该公司的重要性进行初步判断。第三部分对损益表和资产负债表的分配进行初步判断，并使用相对规模和重要性作为分配的基础。也有人认为，有些领域百分之百地需要审核。第四部分是，基于以下信息分配的三部分：
Analysing how international operations have benefited Devro plc
Multinational companies play an important role in global finance as they manage production of manufactured in a number of countries. There are various factors that could affect the performance of a multinational company. The factors include fluctuation of currency rate, political and economic stability of the host countries and the company's investment strategy.
This paper outlines and evaluates the international operations of a major UK multinational company, Devro plc (devro). It attempts to highlight how international operations has benefited Devro and influenced its financial strategy. Part 1 of the paper provides a use the best judgement to determine the type of internal controls to expect the company have selected to have in place. Part 2 determine with full explanations, the preliminary judgement about materiality for the company selected. Part 3. Allocate the preliminary judgement about materiality to the income statement and balance sheet amounts using the relative size and importance of the amounts as the basis for allocation. And also identity, with explanations those areas which has consider require a 100% audit. Part 4 reallocate the amounts allocated in part 3 above based on the following information:
Controls over both the revenue and the purchasing.
Controls over inventory.
Controls over additions to plant, depreciation and impairment.
Controls over the valuations of financial instruments.
南通有限公司的背景Background of Devro Plc
Devro Plc (Devro) is engage in the production of manufactured castings for the food production; they provide a range of products and industrial carry to the manufacturers of sausages, salami, hams and other cooked meal. The Company also manufactures and markets collagen film, collagen gel, plastic coatings, and collagen raw materials for the medical use. The Company has developed services in the Scotland, the Czech Republic, the United States and the Australia. The Company operates decided to focus collagen castings, distributed products and other products. Collagen casings include the three edible collagen brands Devro, Coria and Cutisin, and Cutisin non-edible collagen casings. Distributed products include Teepak cellulose, Krehalon plastics and other ancillary products. Other products include collagen film, collagen gel, Cutisin plastic casings, collagen for medical use and thin-film products. For the financial year ended 31 December 2009, Devro plc's revenues grow 20% to £220.4M. The Net income increased 62% to £20.2M. And Revenue reflects increase in demand for Company's products and services. Higher income return higher operating profit, decrease in finance expense, and the Devro Plc of net finance cost against an income on annuity & post-retirement health plan assets or liabilities.
南通有限公司的战略性目标与业绩分析Analysis of Devro performance based on its strategic objectives
Devro Plc strategic objectives are to continue to increase its customers' base through new business 'wins' and gaining new businesses with its existing customers, and consolidating the markets in which it competes through acquisition and improving its operational efficiency. Devro plc also continues to look for opportunities to extend its business into new geographies, expand and coordinate its procurement and international sourcing, invest in systems and infrastructure to improve its operating model, and redefine and deepen its commitment to its customers.
Devro plc focuses on its strengths as one of the leading suppliers of products that are everyday essentials to businesses. The company relies heavily on collagen and acquisition growths. Its claim for success is based on its understanding of its customers' needs a product offering as and when needed. Its aim is to be a global market leader in specialist distribution and agents.
Devro Plc partners with both its customers and suppliers in providing outsourcing solutions and service oriented distribution. It sources its products from a variety of manufacturers around the world. Devro Plc works with top international brands and local suppliers to ensure that its customers have access to the best and most suitable products that meet their needs.
Devro Plc appears to have achieved its strategic objectives. Over the year period (2007 - 2008), Devro Plc had been acquiring new businesses. For example, in 2008, Devro plc spent circa £12.7m on acquisitions with the Group making capital investments in five countries, i.e. UK, EU, Czech Republic, Australia and US. Other acquisitions included fourth in Asia pacific, Six in Europe and one each in the American. Without fail, Devro Plc is always looking for opportunities for increase its customer base, e.g. during 2008, it secured an extensive network of distribution and agent. Devro Plc also strives to continuously improve its operating efficiency.
Devro Plc made foreign direct investment in order to expand its operation acquisition strategy. To summarise, growth by acquisition is probably desirable when growth for edible collagen cannot achieve the target that Devro Plc has set. This may be because it is the only way the business can get particular critical resources, or because the time taken to grow edible collagen would be less acceptable to the company shareholder. The Devro Plc has five Directors and sixth executive committee.
The judgement are required to make for internal control the Committee shall keep under review the effectiveness of the Devro plc financial reporting and internal control policies and procedures for the identification, assessment and reporting of risks.
Internal control sets the quality of an organization, influencing the control consciousness of its people. It is foundation for effective internal control providing discipline and organization. The entity of risk management process the entities identify and manage its business risks.
The information and communication systems include the procedures and record to initiate record, process and report transaction and to maintain accountability of individual roles and responsibilities for the manufacturer products. Devro plc provide a wide range of products and technical support to manufacturers of sausages, salmi, hams and other cooked hams
The control procedures are the policies and procedures that help to ensure that management directives are carried out. The monitoring is a process for the quality executive directors are expected to build up a shareholding in the performance over time, to the value of one year's salary of internal control.
The Audit Committee has completed its review of the effectiveness of the Group's systems of internal control during the year, which is in compliance with the Turnbull Guidance 2005. It confirms the necessary action plans to remedy identified weaknesses in internal control are in place and have been throughout the year.
The Turnbull comments that this is risk management are illustrated in the diagram below. This is based on the idea of continual feedback that is inherent in management controls systems, this feedback on issues and problems results in improvement in the risk management process.
Organisation
The Boards have established a clear organisational structure, including formally delegated authorities that respond to the Principal Risk Factors that devro faces in the short, medium and longer term.
The diagram below provides one approach to the risk review process and summarises the stages involved in establishing and operating an adequate internal controls environment.
审计计划Audit planning
The ISA 300 states for the auditor to have an audit plan that the audit will be performed in an effective manner. Review last year annual report papers checking for any problems or issues that came up. Assess the impact of any changes in standards or law on the financial statements of an audit client. The auditor should copies and reviews management accounts, and discusses with management any problems that you consider material to the audit. Devro Plc plan the timing of the audit to fit both firm and the client to consider the possibility of relying on any audit work record the audit evidence from the audit work performed to support the auditor opinion. Devro Plc has determine the 3 continents number and grade of employees in American, Europe and Asia Pacific necessary to do the audit to determine any additional specialist coloured and small-calibre snack sausage casings are also a part of the overall Devro range. Meet the audit team and review the plan, discuss any possible problem, and the budget of hours and cost should be prepare. Last year timesheet performance Devro Plc has lost working day per million hours worked for 246.#p#分页标题#e#
The auditor must property document the audit plan. Most plant are formalised nowadays for all but the small assignments, by using a standard planning memorandum.
The control environment implies the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance in the entity. The control environment has an effect on the effectiveness of the specific control procedures. To ensure that the effectiveness of the internal control system.
The function of the board of directors and its committees, management's philosophy and operating style., the entity's organisational structure and methods of assigning authority and responsibility, the management's control system including the internal audit function, personnel policies and procedures and segregation of duties.
"Control procedures" implies those policies and procedures in addition to the control environment which management has established to achieve the entity's specific objectives.
Reporting, reviewing and approving reconciliations, checking the arithmetical accuracy of the records. Controlling applications and environment of computer information systems, for example, by establishing controls over: changes to computer programmes access to data files.
Maintaining and reviewing control accounts and trial balances. Approving and controlling of documents. Evaluate internal data with external sources of information comparing the results of cash, security and stock counts with accounting record, limiting direct physical access to assets and records. Comparing and analysing the financial results with budgeted amounts.
In the audit of financial statements, the auditors are only concerned with those policies and procedures within the accounting and internal control systems that are relevant to the financial statement assertions. The understanding of relevant aspects of the accounting and internal control systems, together with the inherent and control risk assessments and other considerations, enables the auditors to identify the types of potential material misstatements that could occur in the financial statements, consider factors that affect the risk of material misstatements and design appropriate audit procedures.
Materiality concept is one of the most important concepts of auditing. The materiality concept should be considered by the auditor before making an opinion on the financial statements. The client or management of the entity has the responsibility to ensure that whether the financial statements reveal all relevant material information.
When material information is not disclosed or materially misstated, the financial statements will not present true and fair view. It will not be possible for the auditor to make an opinion on the financial statements without considering materiality concept. The opinion of chairman material is the matter of professional judgement and experience of the auditor.
The concept of materiality is reflected in the wording of the auditor standard audit report trough the phrase the financial statement give true and fair view or present fairly in all material respects. This is the manner in which auditor communicates the view of materiality to the users of auditor's report. There is a legal requirement to audit financial statement and present as opinion on those financial statements. If the auditors do not detect a material error then their opinion on the financial statements could be incorrect. There have only two owner/directors who will be the initial users of the financial statements
The directors will want to know if there is material an error resulting from any mistakes they may have made the auditors has a responsibility to the members to ensure that the financial statements are materiality corrects. The auditors are also other users of the financial statements who will include the taxation authorities and the bank who have made a loan to the company. They will want to see true and fair view accounts. The auditors must ensure that the financial statements are free from material misstatement to avoid any legal liability to third parties if they audit the financial statements negligently.
南通有限公司的审计风险评估Appraisal of Devro plc audit risk profile
Audit risk is the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstatement. An auditor adopting a risk-based auditing approach obtains as understanding of an entity and its environment. Devro plc performs business in several countries and foreign exchange rate fluctuations could have a material adverse on operating business.
Inherent risk this is the susceptibility of an assertion to a misstatement that could be material, either individually or when aggregated with other misstatement, Devro Plc assuming that there were no related controls
Control risk is the risk that a misstatement that could occur in an assertion and that could be material, Devro Plc either individually or when aggregated with other misstatement, will not be prevented, or detected and corrected, on a timely basis by the entity's internal control. Customer and distribution in a large number of countries, the group has set up internal procedures and controls to mitigate the risk of non payment.
Inherent risk and control risk are the entity risks and they exist independently of the audit of the financial statement. The auditor is required to assess both of these components of audit risk as a basis for determining the level of substantive procedures to carry out.
Detection risk relates to the nature, timing and extent of the auditors procedures. It is the risk that the auditor will not detect a misstatement that exists in an assertion that could be material individually or when aggregated with other misstatement.
The audit risk model used by auditors, dictated that for a given level of audit risk, the acceptable level of detection risk bears an inverse relationship to the assessment of the risk of material misstatement.
Materiality refers to ISA 320 definition information is material if non disclosure could influence the economic decision of users taken on the basis of the financial statements. Materiality depends on the size of the item or error judged in the particular circumstances of its omission or misstatement. That is a legal requirement to statutory audit financial statements present an opinion on those financial statements.
Materiality is considered a relative concept because amount such as £183,125,000 revenue might be consider highly material for a small entity but would be clearly immaterial for a large multinational company with assets in billions. Devro Plc calculation of the preliminary judgement is based on the relative size (eg total assets and total revenue of the entity. There is no specific guidance and it is a matter of professional judgment. 4 rules size, financial
Materiality must be considered in aggregation and in totality. But also in indicial method Qualitative and Quantitative factors that may affect the assessment of materiality must be taken into consideration. Qualitative nature of business factors fraud and irregularities, small amounts that might violate covenants in the contract, non compliance with laws and regulations, amounts that might affect the trend in earning. Quantitative factors total assets, total revenue, net income before tax, gross profit, average of period income before tax.
The amounts recognised in the statement of financial position receivable represents only 0·7% (1080/160,010 million x 100) of total assets so is immaterial in monetary terms. However, the details of the transaction could make it material by nature.
The amount is outstanding from a company under the control of Devro Plc chairman. Readers of the financial statements would be interested to know the details of this transaction, which currently is not disclosed. Elements of the transaction could be subject to bias, specifically the repayment terms, which appear to be beyond normal commercial credit terms.
5-10% of pre tax profit
5-10% of total assets
1/2% of total revenues
Valuable or size rules are similar to single rules but they differ in that they present a range of promising different materiality level of companies of different sizes.
5 to 10% of Operating Profit if it is less than £50,000
5 to 10% of Operating Profit if it is between £50,000-£6,000,000
1/2% of Operating Profit if it is over £600,000,000
The single rule method would involve the auditor selecting as follow materiality amounts:
Single rule Computation Materiality Amount
5/10% of pre tax income 5/10%*£15,340,000 £7,670,000
5/10% of total assets 5/10%*£160,010,000 £80,005,000
1/2% of total revenues 1/2%* £183,125,000 £91,562,500
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Controls over both the revenue and the purchasing
Occurrence- select a sample of sales transactions from sales journal and trace sales invoice back customer orders and shipping documents.
Completeness- traces a sample of shipping documents to the details in the sales invoices and to the sales journal and debtor's subsidiary ledger.
Accuracy- compares prices and terms on a sample of sales invoices with the authorized price list and terms of trade.
Revenue: Inspect despatch notes raised on shortly before 31 December 2008 and compare dates on a sample of sales invoices with the dates of shipment and with dates they were recorded in the sales journal.
Purchases: select a sample of
Classifications- examine a sample of sales invoices for proper classification in to revenue accounts.
Existence- get information for selected sample of accounts receivable performs alternative procedures for account receivables confirmation exceptions and non responses.
Rights -Review bank confirmation for any liens on receivable inquire management, review loan agreements and board minutes for any indication that accounts receivables have been sold.
Completeness- Obtain aged trial balance of accounts receivables and agreeing of total to general ledger. Trace shipping documents to sales journal and debtor's subsidiary ledger if such testing was not performed as a test of controls.
Cut off- Examine sample of sales invoices and shipping documents for a few days before and after year end for recording sales in proper period. Perform analytical procedures for reasonableness of sales returns cut off or examine a sample of receiving documents for a few days before and after year end for recording of sales in proper period.
Valuation and allocation- Evaluate the results of confirmations of selected accounts receivable, Examine the adequacy of provision of doubtful debts
库存控制Controls over inventory
Inventory should be stated in the financial statement at the lower of cost and net reliable value. Cost is that expenditure, which has been incurred, in the normal course of business, in bringing the product or service to its present location and condition. Net realizable value is the estimated selling price in the ordinary course of business (net of trade discounts but before settlement discounts) less far costs to completion and further costs marketing, selling or distribution.
IAS2 requires inventories to be disclosed in the financial statements in classification appropriate to the enterprise. This classification will normally be raw materials, work in progress and finished goods. Deletes capitalisations of exchange differences as part of the cost of purchases, eliminates use of LIFO Disclosure of the amount any write downs of inventories and carrying amount of inventories carried at fair value less costs to sell Standard does not relate to the measurement of inventories of agricultural products, minerals and mineral products or to inventories of commodity broker- trader chairman executive use fair values less costs to sell, eliminates reference to the matching principles.
Suppliers price, after trade discounts for raw materials Cost of transporting materials to the business premises Labour costs directly involved in the processing of raw materials Variable costs such as power, incurred in the processing of raw material, Fixed production costs/overheads, such as rent for the processing factory, Depreciation charges for the property, plant and equipment used in the production process.
对控件添加的折旧及减值Controls over additions to plant, depreciation and impairment
Occurrence - vouch significant additional and dispositions to supplier invoices or other supporting documentations. Review lease or hire purchase agreements to ensure they are properly accounted for.
Completeness- Obtain a lead schedule of fixed assets cast schedule and agree totals to the general ledger. Physically examine a sample of capital assets and trace them into the property, plant and equipment subsidiary ledger.
Classification-Vouch transaction included in repairs and maintenance for items that should be recognised as plant and equipment .Review lease transactions for proper classification between operating and finance leases.
Compare prior-year balances in property, plant and equipment and depreciation expenses with current year balances after considering any changes in conditions or asset composition. Compute the ratio of depreciation expense to the related Property, plant and equipment and comparison to prior year's ratios. Compute the ratio of insurance expenses to the related property, plant and equipment account and compare to prior years ratios.
Review capital budgets and compare the amounts spent with the amounts budgeted. Revaluations should be made with sufficient regularity such that the carrying amount does not differ materiality from that which would be determined using fair value at the end of the reporting period. If an item of property, plant and equipment has been revalued, the entire class to which asset belongs must be revalued.
Revaluations should be credited to equity (revaluation reserve) unless reversing a previous charge to income. Revaluations are disclosed as other comprehensive income in the statement of comprehensive income. Decrease in valuation should be charged to income unless reversing a previous credit to equity. If the revalue asset is sold or otherwise disposed of, any remaining revaluation surplus is transferred directly to retained earnings and disclosed in the statement of changes in equity to retained, not the statement of comprehensive income. If an asset recoverable amount falls in its carrying amount, the decline should be recognised and charged to profit and loss (unless it reserves a previous credit to equity. Gains or losses on the disposal or retirement of an asset should be calculated by reference to the carrying amount.
The impairment of property, plant and equipment should be determined by reference to IAS 36 impairment of assets. Long lived assets other than land are depreciated on a systematic basis over their useful lives. Depreciation base is cost less estimated residual value. The depreciation method chosen should reflect the pattern in the assets economic benefits are consumed by the enterprise. Towards revalue assets, depreciation is based on the revalue amount.
The IAS 32 presentation of financial assets and financial liabilities, compound financial instruments hedge accounting and fair values, Qualitative and quantitative information about the exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk. The qualitative disclosures describe management objectives, policies and processes for managing those risks.
The qualitative disclosure provide information about the extent to which the entity is exposed to risk, based on information provided internally to the entity key management personnel. The qualitative and quantitative disclosures are designed to provide an overview of the entity use of financial instruments and the exposures to risks they create. The IAS39 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non financial items.
The presentation and disclosure of financial instrument is the another standard IAS32. A financial instrument is recognised in the financial statements when the entity becomes a party to the financial instrument contract. An entity derecognises a financial liability when its obligation is discharged cancelled or it has expired. Its contractual rights to the assets cash flow expire, It has transferred the asset and substantially all risks and rewards of ownership or It has transferred the asset, and has retained some substantial risks and rewards of ownership, but the other party may sell the asset. The risks and rewards retained are recognised as assets. Financial liabilities that are not held for trading or designated at fair value.
结论Conclusion
The reflection of the materiality of an item is the matter of professional judgement and experience of the auditor. The financial statements must contain all the material information to show true and fair view. Objective and Scope of the Audit of Financial Statements", states that the auditor's opinion assist purpose of the true and fair view of the financial position and operating results of an enterprise. The customer, however, should not assume that the auditor's opinion is a Devro Plc as to the future viability of the enterprise or the efficiency or effectiveness with which management has conducted the affairs of the enterprise.
参考文献References
ACCA BPP study text paper P1 Professional Accountant) First Edition 2007, Third Edition June 2009
ACCA BPP study text paper P7 Advance Audit and Assurance (international) First Edition 2007, Fourth Edition 2009
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