You are an audit supervisor of Caving & Company and you are planning the audit of Hurling Company, a listed company, for the year ending March 31, 2023. The company manufactures computer components and forecast profit before tax is $33.6m\$ 33.6 \mathrm{~m} and total assets are $79.3m\$ 79.3 \mathrm{~m}. 您是 Caving & Company 的審計主管，正在計劃對 Hurling Company（一家上市公司）進行 2023 年 3 月 31 日結束的年度審計。該公司生產計算機元件，預測稅前利潤為 $33.6m\$ 33.6 \mathrm{~m} ，總資產為 $79.3m\$ 79.3 \mathrm{~m} 。
Hurling Company distributes its products through wholesalers as well as via its own website. The website was upgraded during the year at a cost of $1.lm\$ 1 . l m. Additionally, the company entered into a transaction in February to purchase a new warehouse which will cost $3.2m\$ 3.2 \mathrm{~m}. Hurling Company’s legal advisers are working to ensure that the legal process will be completed by the year end. The company issued $5.0m\$ 5.0 \mathrm{~m} of irredeemable preference shares to finance the warehouse purchase. 哈林公司通過批發商以及自己的網站分銷產品。網站在年內升級，費用為 $1.lm\$ 1 . l m 。此外，公司在二月份進行了一項交易，購買一個新的倉庫，費用為 $3.2m\$ 3.2 \mathrm{~m} 。哈林公司的法律顧問正在努力確保法律程序在年底前完成。公司發行了 $5.0m\$ 5.0 \mathrm{~m} 的不可贖回優先股以資助倉庫的購買。
During the year, the finance director has increased the useful economic lives of fixtures and fittings from three to four years as he felt this was a more appropriate period. The finance director has informed the engagement partner that a revised credit period has been agreed with one of its wholesale customers, as they have been experiencing difficulties with repaying the balance of $1.2m\$ 1.2 \mathrm{~m} owing to Hurling Company. In January 2023, Hurling Company introduced a new bonus based on sales targets for its sales staff. This has resulted in a significant number of new wholesale customer accounts being opened by sales staff. The new customers have been given favourable credit terms as an introductory offer, provided goods are purchased within a two-month period. As a result, revenue has increased by 5%5 \% on the prior year. 在這一年中，財務總監將固定裝置和設備的經濟使用壽命從三年延長至四年，因為他認為這是一個更合適的期間。財務總監已通知參與合夥人，與其中一位批發客戶已達成修訂的信用期限，因為該客戶在償還欠 Hurling Company 的 $1.2m\$ 1.2 \mathrm{~m} 餘額方面遇到了困難。在 2023 年 1 月，Hurling Company 為其銷售人員引入了一個基於銷售目標的新獎金計劃。這導致銷售人員開設了大量新的批發客戶賬戶。新客戶在購買商品的兩個月內獲得了優惠的信用條件作為介紹優惠。因此，收入較前一年增加了 5%5 \% 。
The company has launched several new products this year and all but one of these new launches have been successful. Feedback on product Luge, launched four months ago, has been mixed, and the company has just received notice from one of their customers, Petanque Company, of intended legal action. They are alleging the product sold to them was faulty, resulting in a significant loss of information and an ongoing detrimental impact on profits. As a precaution, sales of the Luge product have been halted and a product recall has been initiated for any Luge products sold in the last four months. 該公司今年推出了幾款新產品，除了其中一款外，所有新產品的推出都取得了成功。四個月前推出的產品 Luge 的反饋意見不一，而公司剛剛收到來自其客戶 Petanque 公司的通知，表示將採取法律行動。他們聲稱售給他們的產品存在缺陷，導致了重大信息損失，並對利潤造成持續的不利影響。為了以防萬一，Luge 產品的銷售已被暫停，並已啟動對過去四個月內售出的任何 Luge 產品的召回。
The finance director is keen to announce the company’s financial results to the stock market earlier than last year and in order to facilitate this, he has asked if the audit could be completed in a shorter timescale. In addition, the company is intending to propose a final dividend once the financial statements are finalized. Hurling Company’s finance director has informed the audit engagement partner that one of the company’s non-executive directors(NEDs) has just resigned, and he has enquired if the partners at Caving & Company can help Hurling Company in recruiting a new NED. Specifically he has requested the engagement quality control reviewer, who was until last year the audit engagement partner on Hurling Company, assist the company in this recruitment. Caving & Company also provides taxation services for Hurling Company in the form of tax return preparation along with some tax planning advice. The finance director has recommended to the audit committee of Hurling Company that this year’s 財務總監希望能比去年更早地向股市公布公司的財務結果，為了促進這一點，他已要求是否能在更短的時間內完成審計。此外，公司打算在財務報表最終確定後提議發放最終股息。Hurling 公司的財務總監已通知審計委託合夥人，其中一位公司的非執行董事（NED）剛剛辭職，他詢問 Caving & Company 的合夥人是否能協助 Hurling 公司招聘新的 NED。具體來說，他請求參與質量控制審查的審計合夥人協助公司進行這次招聘，該合夥人直到去年仍是 Hurling 公司的審計合夥人。Caving & Company 也為 Hurling 公司提供稅務服務，包括稅務申報準備及一些稅務規劃建議。財務總監已向 Hurling 公司的審計委員會建議今年的
audit fee should be based on the company’s profit before tax. At today’s date, 20% of last year’s audit fee is still outstanding and was due to be paid three months ago. 審計費用應基於公司的稅前利潤。截至今天，去年的 20%審計費用仍未支付，且應在三個月前到期。
Required: 所需：
(a) Define audit risk and the components of audit risk. (a) 定義審計風險及其組成部分。
(b) Describe EIGHT audit risks, and explain the auditor’s response to each risk, in planning the audit of Hurling Company (b) 描述八個審計風險，並解釋審計師對每個風險的回應，以規劃 Hurling 公司的審計
Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively. 注意：請將您的答案準備成兩欄，分別標題為審計風險和審計師的回應。
Linda Window Glass Limited (Linda) is a glass manufacturer, which operates from a large production facility, where it undertakes continuous production 24 hours a day, seven days a week. Also, on this site are two warehouses, where the company’s raw materials and finished goods are stored. Linda’s year end is December 31. Linda is finalizing the arrangements for the year-end inventory count, which is to be undertaken on December 31, 2023. The finished windows are stored within 20 aisles of the first warehouse. The second warehouse is for large piles of raw materials, such as sand, used in the manufacture of glass. The following arrangements have been made for the inventory count: 琳達窗玻璃有限公司（Linda）是一家玻璃製造商，擁有一個大型生產設施，該設施全天候運作，每週七天不間斷生產。此外，該地點還有兩個倉庫，用於儲存公司的原材料和成品。琳達的財年結束日期為 12 月 31 日。琳達正在為 2023 年 12 月 31 日進行的年終庫存盤點做最後安排。成品窗戶存放在第一個倉庫的 20 條過道內。第二個倉庫則用於儲存大量的原材料，如用於製造玻璃的沙子。已為庫存盤點做出以下安排：
The warehouse manager will supervise the count as he is most familiar with the inventory. There will be ten teams of counters and each team will contain two members of staff, one from the finance and one from the manufacturing department. None of the warehouse staff, other than the manager, will be involved in the count. 倉庫經理將負責監督盤點，因為他對庫存最為熟悉。將會有十個盤點小組，每個小組將由兩名員工組成，一名來自財務部門，另一名來自製造部門。除了經理之外，倉庫的其他員工將不參與盤點。
Each team will count an aisle of finished goods by counting up and then down each aisle. As this process is systematic, it is not felt that the team will need to flag areas once counted. Once the team has finished counting an aisle, they will hand in their sheets and be given a set for another aisle of the warehouse. In addition to the above, to assist with the inventory counting, there will be two teams of counters from the internal audit department and they will perform inventory counts. 每個團隊將通過向上和向下計算每個過道來計算一條成品過道。由於這個過程是系統性的，因此不認為團隊需要標記已計算的區域。一旦團隊完成了對一條過道的計算，他們將提交他們的計算表，並獲得另一條倉庫過道的計算表。除了上述內容，為了協助庫存計算，內部審計部門將有兩個計數團隊，他們將進行庫存計算。
The count sheets are sequentially numbered, and the product codes and descriptions are printed on them but no quantities. If the counters identify any inventory which is not on their sheets, then they are to enter the item on a separate sheet, which is not numbered. Once all counting is complete, the sequence of the sheets is checked and any additional sheets are also handed in at this stage. All sheets are completed in ink. 計數表是按順序編號的，產品代碼和描述印在上面，但不包括數量。如果計數員發現任何不在他們表上的庫存，則需要在一張不編號的單獨表上記錄該項目。一旦所有計數完成，將檢查表的順序，並在此階段提交任何額外的表格。所有表格均以墨水填寫。
Any damaged goods identified by the counters will be too heavy to move to a central location, hence they are to be left where they are but the counter is to make a note on the inventory sheets detailing the level of damage. 任何由櫃檯識別的損壞貨物將太重而無法移動到中央位置，因此應該留在原地，但櫃檯需在庫存表上註明損壞程度。
As Linda undertakes continuous production, there will continue to be movements of raw materials and finished goods in and out of the warehouse during the count. These will be kept to a minimum where possible. 隨著琳達進行持續生產，倉庫內外將持續有原材料和成品的進出。在可能的情況下，這些將被盡量減少。
The level of work-in-progress in the manufacturing plant is to be assessed by the warehouse manager. It is likely that this will be an immaterial balance. In addition, the raw materials quantities are to be approximated by measuring the height and width of the raw material piles. In the past this task has been undertaken by a specialist; however, the warehouse manager feels confident that he can perform this task. 製造廠的在製品水平將由倉庫經理進行評估。這可能是一個不重要的餘額。此外，原材料的數量將通過測量原材料堆的高度和寬度來進行估算。在過去，這項任務是由專業人士負責；然而，倉庫經理對自己能夠完成這項任務充滿信心。
You are the audit senior of Daffodil & Company (a CPA firm) and are responsible for the audit of inventory for Linda. You will be attending the year-end inventory count on December 31, 2023. 您是 Daffodil & Company（一家會計師事務所）的審計高級人員，負責 Linda 的庫存審計。您將於 2023 年 12 月 31 日參加年終庫存盤點。
Violet Stores Limited (Violet) operates 25 food supermarkets. The company’s year-end is December 31, 2023. The audit manager and partner recently attended a planning meeting with the fmance director and have provided you with the planning notes below. 紫羅蘭商店有限公司（Violet）經營 25 家食品超市。該公司的財年結束於 2023 年 12 月 31 日。審計經理和合夥人最近參加了與財務總監的計劃會議，並向您提供了以下計劃筆記。
You are the audit senior, and this is your first year on this audit. In order to familiarize yourself with Violet, the audit manager has asked you to undertake some research in order to gain an understanding of Violet, so that you are able to assist in the planning process. He has then asked that you identify relevant audit risks from the notes below and also consider how the team should respond to these risks. 你是審計高級人員，這是你第一次參與這項審計。為了讓你熟悉 Violet，審計經理要求你進行一些研究，以便了解 Violet，這樣你才能協助規劃過程。他接著要求你從以下筆記中識別相關的審計風險，並考慮團隊應如何應對這些風險。
Violet has spent $1.6\$ 1.6 million in refurbishing all of its supermarkets; as part of this refurbishment programme their central warehouse has been extended and a smaller warehouse, which was only occasionally used, has been disposed of at a profit. In order to finance this refurbishment, a sum of $1.5\$ 1.5 million was borrowed from the bank. This is due to be repaid over five years. The company will be performing a year-end inventory count at the central warehouse as well as at all 25 supermarkets on December 31. Inventory is valued at selling price less an average profit margin as the fmance director believes that this is a close approximation to cost. 紫羅蘭已經花費 $1.6\$ 1.6 百萬對所有超市進行翻新；作為這項翻新計劃的一部分，他們的中央倉庫已經擴建，而一個只偶爾使用的小倉庫則以盈利的方式處置。為了資助這次翻新，從銀行借入了 $1.5\$ 1.5 百萬的資金。這筆款項計劃在五年內償還。公司將在 12 月 31 日對中央倉庫以及所有 25 家超市進行年終庫存盤點。庫存的估值為售價減去平均利潤率，因為財務總監認為這接近成本的估算。
Prior to 2023, each of the supermarkets maintained their own financial records and submitted returns monthly to head office. During 2023 all accounting records have been centralized within head office. Therefore, at the beginning of the year, each supermarket’s opening balances were transferred into head office’s accounting records. The increased workload at head office has led to some changes in the Finance Department, and in November 2023, the fmancial controller left the company. His replacement will start in late December. 在 2023 年之前，每家超市都維護自己的財務記錄，並每月向總部提交報表。在 2023 年，所有的會計記錄已經集中到總部。因此，在年初，每家超市的期初餘額被轉入總部的會計記錄中。總部的工作量增加導致財務部門出現了一些變化，並且在 2023 年 11 月，財務主管離開了公司。他的接替者將在 12 月底開始工作。
Andromeda Industries Limited (Andromeda) develops and manufactures a wide range of fast moving consumer goods. The company’s year-end is December 31, 2023 and the forecast profit before tax is $8.3\$ 8.3 million. You are the audit manager of Neptune Limited and the yearend audit is due to commence in January. The following information has been gathered during the planning process: 安德羅梅達工業有限公司（Andromeda）開發和製造各種快速消費品。該公司的財年結束日期為 2023 年 12 月 31 日，預測稅前利潤為 $8.3\$ 8.3 百萬。您是海王星有限公司的審計經理，年終審計將於 1 月開始。在規劃過程中已收集到以下信息：
Inventory count 庫存盤點
Andromeda’s raw materials and fi shed goods inventory are stored in 12 warehouses across the country. Each of these warehouses is expected to contain material levels of inventory at the year end. It is expected that there will be no significant work in progress held at any of the sites. Each count will be supervised by a member of Andromeda’s Internal Audit Department and the counts will all e place on December 31, when all movements of goods in and out of the warehouses will cease. 安德羅梅達的原材料和成品庫存存放在全國 12 個倉庫中。預計每個倉庫在年底時將保持一定的庫存水平。預計在任何地點都不會有重大在製品。每次盤點將由安德羅梅達內部審計部門的成員監督，所有盤點將於 12 月 31 日進行，屆時倉庫內的所有貨物進出將停止。
Research and development 研究與開發
Andromeda spends over $2 million annually on developing new product lines. This year, it incurred expenditure on five projects, all of which are at different stages of development. Once they meet the reco tion criteria under IAS 38 Intangible Assets for development expenditure, Andromeda includes the costs incurred within intangible assets. Once production commences, the intangible assets are amortized on a straight line basis over five years. 安德羅梅達每年在開發新產品線上花費超過 200 萬美元。今年，它在五個項目上產生了支出，這些項目都處於不同的開發階段。一旦它們符合國際會計準則第 38 號《無形資產》對開發支出的確認標準，安德羅梅達將所產生的成本納入無形資產中。一旦開始生產，無形資產將以直線法在五年內攤銷。
During the audit, the team discovers that one of the five development projects, valued at $980,000 and included within intangible assets, does not meet the criteria for capitalization. The fmance director does not intend to change the accounting treatment adopted as she considers this an immaterial amount. 在審計過程中，團隊發現五個開發項目中的一個，價值 98 萬美元，包含在無形資產中，並不符合資本化的標準。財務總監不打算改變所採用的會計處理，因為她認為這是一個不重要的金額。