2009年ACCAP1-P3真题答案12013.pdf

财经网络教育领导品牌 _ 高顿网校 All Rights Reserved 版权所有 复制必究 1 2009 年 ACCA P1-P3 真题答案 Professional Level Essentials Module,Paper P1 Professional Accountant December 2009 Answers 1(a)Seven-step(AAA)model Step 1:What are the facts of the case?The facts are that the Mary Jane,one of the companys ships,has sunk and that one contributory cause of the disaster was that the ship had not received the necessary modifications for operating in the rougher seas between Eastport and Northport.Had the recommended structural changes been made,the Mary Jane would not have sunk.Step 2:What are the ethical issues in the case?The ethical issues are whether to disclose the information publicly,thereby providing bereaved families with a better explanation of why their loved ones died(and potentially opening the company up to greater liability),or to conceal the information,thereby limiting the value of any punitive damages and protecting shareholder value,at least in the short term.Step 3:What are the norms,principles and values relevant to the case?The company is bound by the norms and expectations of its stock exchange and it has voluntarily claimed to have the highest standards of corporate ethics,particularly valuing its reputation for outstanding customer care.This means that it owes an implicit and explicit duty of care to both its customers and its shareholders.As a company that seemingly values its reputation as a well-governed organisation,it is also bound by the underlying principles of corporate governance that include integrity,probity and transparency.Health and safety issues are also very important in all shipping operations and Sea Ships should ensure that all of its ferries are compliant with the highest health and safety standards.Step 4:What are the alternative courses of action?Alternative 1 is to disclose the information about the advice on structural work to the Mary Jane to the media,the government and the bereaved families.Alternative 2 is to seek to suppress the information within the company and hope that there is no leak.Step 5:What course of action is most consistent with the norms,values and principles identified in step 3?The information is material to a number of parties better understanding of why the Mary Jane sank.The bereaved families,maritime accident investigators,the government,the ships insurers and other shipping companies would all benefit from having the information.Disclosure would seem to be the most appropriate course of action notwithstanding the potentially unfortunate consequences for Sea Ships Company of this information leaking out.However,disclosure may result in greater penalties which will be harmful to shareholder value.Step 6:What are the consequences of each possible course of action?If the company makes the disclosure,there is a risk that the punitive damages(not yet agreed by the court)would be higher.The case says that the size of the punitive damages would.reflect the scale of Sea Ships negligence in contributing to the disaster.A large enough fine would threaten future cash flows and hence future shareholder value.It would also threaten employees jobs and the ability of the company to continue to provide the existing level of service to customers.Disclosure would potentially invalidate any insurance policy they had to deal with such a disaster,further harming shareholder value.财经网络教育领导品牌 _ 高顿网校 All Rights Reserved 版权所有 复制必究 2 If the company were to suppress the information,then each person in possession of the knowledge would not only have to examine his or her own responsibilities in the matter but each would also have potentially damaging information if they were to leave Sea Ships or become disillusioned with it.The consultant who recommended the upgrade will also be a potentially major risk in the leaking of the information.Step 7:What is the decision?Alternative 1 is that the company should make a full and detailed disclosure,probably with an acceptance of full responsibility for the failure to make the necessary amendments to the ship.This would be a very costly choice but would be consistent with the companys claimed ethical values and also with the important core values of corporate governance(integrity,transparency,etc).Alternative 2 is to suppress the information and take all necessary measures to ensure that it is not revealed.This would be a very risky option as the cost to the company and to the directors personally,if the information was ever to emerge,would be very serious.It would also be against the letter and spirit of the core values of corporate governance.It would be unlikely to protect shareholder value in the longer term,is the least ethical of the options and so should be avoided.Tutorial note:it is possible to argue for suppression of the report in the short term protection of shareholder value.Allow some marks for logic of reasoning process if coherently argued but alignment with the stated values of the company does not allow for suppression as a final decision.(b)Identify and analyse the internal control failures at Sea Ships Company and on the Mary Jane The case describes internal control failures both on the Mary Jane herself and also at Sea Ships head office.The company ignored important advice about necessary structural changes needed to the Mary Jane to make her seaworthy for the Northport route.If there was an internal procedure for processing advice,presumably as a part of an economic evaluation of transferring the Mary Jane to the Northport route,then it was clearly ineffective.The document identified a major risk,but had been suppressed within the company and not brought to the attention of any party who could have authorised this to go ahead.At head office,an oversight in the companys legal department resulted in the full value of the Mary Janes liabilities not being insured.Presumably a human error,this created uninsured liabilities for Sea Ships after the Mary Jane sank.All insurance policies should be reviewed annually and major changes in cover or changes of terms be recommended to the board so that issues like this do not arise.All insurance policies should be reviewed annually and major changes in cover or changes of terms be recommended to the board so that issues like this do not arise.On the Mary Jane herself,lax internal controls produced four internal control problems.There should be a safety first culture on board all ships in which safety considerations outweigh all commercial issues such as meeting schedules.First,a system put in place to ensure that each department head signalled readiness for sea departure was abandoned.This is an example of a reporting by exception system being wrongly assumed to be appropriate.Internal control reporting systems are there because they are important and the fact that they may be inconvenient should not be a reason for abandoning them.Second,there was a mistake in loading vehicles onto the car deck.A sound internal control system would have ensured that such a mistake could not have happened,possibly using physical fit issues of loading ramps,appropriate signage,staff training,or similar mechanisms to 财经网络教育领导品牌 _ 高顿网校 All Rights Reserved 版权所有 复制必究 3 ensure compliance.The result of the mistake was that it created time pressure to leave the port and this contributed to the oversight of the rear doors not being secured and,possibly,the excess speed after leaving port.The third internal control problem on the Mary Jane was the confusion over responsibility for ensuring that the rear doors were closed a key safety procedure for any ferry.It is baffling that two people were,seemingly simultaneously,responsible for this and is a problem created by the poor design of internal reporting systems.According to the case,both had assumed that the other person was checking the doors.The fourth problem was that the Mary Jane was going too fast and exceeding the maritime rules about speed in that section of sea.This created swell and caused turbulence at the back of the ship.This,in turn,caused water to enter the ship that wouldnt have been the case at lower speed.This was a failure to observe regulatory speed restrictions on the part of senior ship officers.(c)Contribution that NEDs might make The board of Sea Ships appears to be in need of help on a number of issues,some of which may be addressed by the use of non-executive directors.Mrs Chans conclusions noted that the board lacked independent scrutiny.One of the most important purposes of any non-executive appointment is to bring an outside perspective(sometimes acting as a corporate conscience)on what can at times be an insular executive culture.In the case of Sea Ships,a number of important internal control issues went unchallenged and a strong non-executive presence could have helped that.Also mentioned by Mrs Chan was the fact that the board lacked nautical and technical expertise.This is a disturbing finding as some detailed knowledge of a companys products or operations is very important in guiding discussions about those parts of the business.The non-executive appointment of serving or retired senior ferry operating personnel from other companies would rectify this and bring the requisite level of expertise.The Combined Code in the UK(based on the Smith Report)and other statutory and advisory codes of corporate governance,specify that every listed company should have an audit committee made up entirely of non-executive directors.The functions of the committee,according to the Combined Code,include reviewing the company s internal control and risk management systems and monitoring and reviewing the effectiveness of the companys internal audit function.Both of these are deficient at Sea Ships and so an effective audit committee would be a major contribution.We are not told if the company currently has one but we can assume that if it has,it is ineffective.There are legal compliance issues at Sea Ships,including a failure to enforce the observation of maritime speed limits among its senior ships officers.One of the advantages of any independent non-executive presence is the enforcement of regulatory and legal rules on company boards with the knowledge that all directors,including non-executives,can be held legally accountable for non-compliance.(d)Memo (i)Importance of information on operational internal controls and risks From:Wim Bock(CEO)To:all Sea Ships senior officers Date:14 December 2009 Re:information on internal control and risks following the loss of the Mary Jane Colleagues,I know you all share with me and the other directors our heartfelt sorrow at the sinking of the Mary Jane with so many lives being lost.Our deepest sympathies go out to the families and friends of all those involved.In the light of the tragic loss,the board felt it vital to write to you 财经网络教育领导品牌 _ 高顿网校 All Rights Reserved 版权所有 复制必究 4 all at this time to remind you all of a number of crucial aspects of internal control and risk.First,I wanted to make clear to you all why the flow of information upwards to the board on matters of internal control and risk is so important.We feel that one contributory factor in the loss of the Mary Jane was a lack of information flow on relevant issues hence my writing to you about this at this time.In the first instance,the information provided enables the board to monitor the performance of the company on the crucial issues in question.This includes compliance,performance against targets and the effectiveness of existing controls.We,the board,need to know,for example,if there are issues with internal controls on board our ships,in ports or in any other area of ships operations.By being made aware of the key risks and internal control issues at the operational level,we can work with you to address them in the most appropriate way.We also need to be aware of the business impact of operational controls and risks to enable us at board level to make informed business decisions at the strategic level.If we are receiving incomplete,defective or partial information then we will not be in full possession of the necessary facts to allocate resources in the most effective and efficient way possible.You will be aware that at board level we have the responsibility to provide information about risks and internal controls to external audiences.Best practice reporting means that we have to provide information to shareholders and others,about our systems,controls,targets,levels of compliance and improvement measures and we need quality information to enable us to do this.This brings me to the second purpose of this memo.(ii)Qualitative characteristics of information needed Secondly,I want to write to you about the most helpful ways in which to convey this crucial information to us.The information we receive on risks and internal controls should be high quality information.This means that it enables the full information content to be conveyed to the board in a manner that is clear and has nothing in it that would make any part of it difficult to understand.In particular I would ask that you consider that your communications should be reliable,relevant and understandable.They should also be complete.By reliable I refer to the trustworthiness of the information:the assumption that it is hard information,that it is correct,that it is impartial,unbiased and accurate.In the event that you must convey bad news such as some of the issues raised by the loss of the Mary Jane,we expect you to do so with as much truthfulness and clarity as if you were conveying good news.By relevant I mean not only that due reports should be complete and delivered promptly,but also that anything that you feel should be brought to the boards attention,such as maritime safety issues,emergent risks,issues with ports,etc.should be brought to our attention while there is still time for us to do something about it.In the case of the Mary Jane there were technical issues with the fit of the ship with her berth at Eastport that were important and we should be made aware of such problems as soon as possible.Not all directors of Sea Ships possess the technical and nautical knowledge of senior operating personnel on board the ferries.It is therefore particularly important that information you convey to us is understandable.This means that it should contain a minimum of technical terms that have obvious meaning to you on board ships,but may not be understandable to a non-marine specialist.All communication should therefore be as plain as possible within the constraints of reliability and completeness.This brings me to my final point.By complete,I mean that all information that we need to know and which you have access to,should 财经网络教育领导品牌 _ 高顿网校 All Rights Reserved 版权所有 复制必究 5 be included.Particularly with relevance to on-board accidents or risks,you must convey all relevant information to us regardless of the inconvenience that it may cause to one or more colleagues.As we have learned at the highes