Note 1: US medical costs are very _________.

SECTION A COMPOSITION

Travel has become part of our life. And more and more of us have come to know the significance of travel through our own experience.Write on ANSWER SHEET ONE a composition of about 150 words on the following topic:

TRAVEL BROADENS THE MIND

You are to write in three parts.

In the first part, state what the topic actually means to you.

In the second part, give one or two examples to illustrate your ideas.

In the last part, bring what you have written to a natural conclusion or a summary.

Marks will be awarded for content, organization, grammar and appropriacy. Failure to follow the instructions may result in a loss of marks.

SECTION B NOTE-WRITING ［10 MIN.］

Write on ANSWER SHEET ONE a note of about 50-60 words based on the following situation:

Yesterday you failed to turn up for the appointment with your teacher, Profess or Wang. Write him a note of apology and make a request for another meeting. You should also suggest the time for the requested meeting.Marks will be awarded for content, organization, grammar and appropriacy.

Most Adults in US Have Low Risk of Heart Disease

More than 80 percent of US adults have a less than 10-percent risk of developing heart disease in the next 10 years, according to a report in the Journal of the American College of Cardiology. Just 3 percent have a risk that exceeds 20 percent.

"I hope that these numbers will give physicians, researchers, health policy analysts, and others a better idea of how coronary heart disease is distributed in the US population," lead author Dr. Earl S. Ford. from the Centers for Disease Control and Prevention in Atlanta, said in a statement.

The findings are based on analysis of data from 13,769 subjects, between 20 and 79 years of age, who participated in the Third National Health and Nutrition Examination Survey from 1988 to 1994.

Overall, 82 percent of adults had a risk of less than 10 percent, 15 percent had a risk that fell between 10 to 20 percent, and 3 percent had a risk above 20 percent.

The proportion of subjects in the highest risk group increased with advancing age, and men were more likely than women to be in this group. By contrast, race or ethnicity had little effect on risk distributions.

Although the report suggests that most adults have a low 10-year risk of heart disease, a large proportion have a high or immediate risk, Dr. Daniel S. Berman, from Cedars-Sinai Medical Center in Los Angeles, and Dr. Nathan D. Wong, from the University of California at Irvine, note in a related editorial.

Aggressive treatment measures and public health strategies are needed to shift the overall population risk downward, they add.

The 10-year risk of heart disease is low for most US adults.

A．Right

B．Wrong

C．Not mentioned

collection, note, notify, unless, if, no alternative but, failure, fail

Dear Sirs,

I am afraid your(1)to settle your account, which is over due for more than six months, will ]cave us with(2)resort to legal proceedings.

This is to(3)you that(4)we receive your check for ＄7550.50 by June 30, we will place your account in the hands of our attorneys for(5).

Yours sincerely,

people commented on a spe．cial report on new medicines．For questions 61 t0 65，match the name of each person to one of the statements(A to G)given below．Mark your answers on ANSWER SHEET1． Ann Best： Your special report on new medicines showed there is thrilling promise in future“cures”for so many diseases that threaten mankind．But how will"ordinary folks pay for these modem miracles？ One drug company is hopeful that the savings involved in developing these medicines“will translate into pure profit for investors．”This can only restilt in a problem for me：Shall I buy food，pay therent or get the medicines I need？ Tom Waken： As a citizen who has been critical of drug companies because of the high drug price，I found that your report about the new medicines has softened my stand．The companies say they have to charge more for their drugs so they can do research for better medicines．Now that I’ve read about the newer and better drugs，1 will gladly go on paying for my medications，knowing I am making a good investment in better living． Robert H．Kamm： We all want to live longer and healthier lives，but taking pills to rescue us from our self-abusive lifestyle. only masks real problems and ends up costing us billions of dollars a year．We oqght to be investing at。least as much in trying to discover why millions of us behave in ways that are not in our best interest smokin9，drinking，0verworking，under-exercising and generally doing things that are bad for our health． John J．Bagshaw： The cost of poor health is shocking and goes well beyond dollars．But the approach that offers the best solution，reduces risk，cuts demand and gets people healthy and fit is prevention．The U．S．is a nation of chronic diseases．It will get much worse．because we never deal with the causes．Individual Americans need to bring this issue to a boil and keep it there until we get a health—care system based on prevention． Laurel Woods： While I applaud the research being done in the field of medicine．I arn also aware that good things can go bad in an instant．I have heart disease．and I had a negative reaction to a new treatment：the result was a long hospital stay．We should remember that caution has to be applied when being treated with a new medicine．Nothing will replace the human element that must be present in a caring medical community． Now match the name of each pemon(61 to 65)to the appropriate statement． Note：there are two extra statements． 回答下列各题： Ann Best

A.Prevention should always come before treatment．

B.A new medical treatment needs to be administered with Calltion．

C.Pills often perform. miracles on people who take them．

D.A change of behavior. counts more than reliance on drugs．

E.However good the new drugs，their affordability is first and foremost

F.New drugs shguld nor be put onto the market until proven effective．

G.Drug companies are justified to sell their products at higher

A.To B.or C.per D.to E.of

In 2005 China had about 1,938,000 physicians(1.5 per 1,000 persons)and about 3,074,000 hospital beds(2.4 per 1,000 persons).Health expenditures on a purchasing power parity(PPP) basis were US$ 224 _____1 capita in 2001,____2 5.5 percent of gross domestic product.Some 37.2 percent of public expenditures were devoted _____3 health care in China in 2001.However,about 80 percent of the health and medical care services are concentrated in cities,and timely medical care is not available to more than 100 million people in ruralareas____4 offset this imbalance,in 2005 China set out a five-year plan to invest 20 billion Renminbi(RMB;US$2.4 billion)to rebuild the rural medical service system composed____5 village clinics and township-and county-level hospitals.

a note of about 50-60 words based on the following situation: Write a ’Thank You’ letter to Mr. Smith for his recommendation of your competence to the manager of the Medical Company.

your capacity as engagement quality control reviewer, you have been asked to review the audit files of Stanley Co and Kowloon Co, both of which have a financial year ended 31 December 2015, and the audits of both companies are nearing completion.

(a) Stanley Co is a frozen food processor, selling its products to wholesalers and supermarkets. From your review of the audit working papers, you have noted that the level of materiality was determined to be $1·5 million at the planning stage, and this materiality threshold has been used throughout the audit. There is no evidence on the audit file that this threshold has been reviewed during the course of the audit.

From your review of the audit planning, you know that a new packing machine with a cost of $1·6 million was acquired by Stanley Co in March 2015, and is recognised in the draft statement of financial position at a carrying amount of $1·4 million at 31 December 2015. The packing machine is located at the premises of Aberdeen Co, a distribution company which is used to pack and distribute a significant proportion of Stanley Co’s products. The machine has not been physically verified by a member of the audit team. The audit working papers conclude that ‘we have obtained the purchase invoice and order in relation to the machine, and therefore can conclude that the asset is appropriately valued and that it exists. In addition, the managing director of Aberdeen Co has confirmed in writing that the machine is located at their premises and is in working order. No further work is needed in respect of this item.’

Inventory is recognised at $2 million in the draft statement of financial position. You have reviewed the results of audit procedures performed at the inventory count, where the test counts performed by the audit team indicated that the count of some items performed by the company’s staff was not correct. The working papers state that ‘the inventory count was not well organised’ and conclude that ‘however, the discrepancies were immaterial, so no further action is required’.

The audit senior spoke to you yesterday, voicing some concerns about the performance of the audit. A summary of his comments is shown below:

‘The audit manager and audit engagement partner came to review the audit working papers on the same day towards the completion of the audit fieldwork. The audit partner asked me if there had been any issues on the sections of the audit which I had worked on, and when I said there had been no problems, he signed off the working papers after a quick look through them.

When reading the company’s board minutes, I found several references to the audit engagement partner, Joe Lantau. It appears that Joe recommended that the company use the services of his brother, Mick Lantau, for advice on business development, as Mick is a management consultant. Based on that recommendation, Mick has provided a consultancy service to Stanley Co since September 2015. I mentioned this to Joe, and he told me not to record it in the audit working papers or to discuss it with anyone.’

Required:

Comment on the quality of the audit performed discussing the quality control, ethical and other professional issues raised. (13 marks)

(b) Kowloon Co works on contracts to design and manufacture large items of medical equipment such as radiotherapy and X-ray machines. The company specialises in the design, production and installation of bespoke machines under contract with individual customers, which are usually private medical companies. The draft financial statements recognise profit before tax of $950,000 and total assets of $7·5 million.

The audit senior has left the following note for your attention:

‘One of Kowloon Co’s major customers is the Bay Medical Centre (BMC), a private hospital. In June 2015 a contract was entered into, under the terms of which Kowloon Co would design a new radiotherapy machine for BMC. The machine is based on a new innovation, and is being developed for the specific requirements of BMC. It was estimated that the design and production of the machine would take 18 months with estimated installation in December 2016. As at 31 December 2015, Kowloon Co had invested heavily in the contract, and design costs totalling $350,000 have been recognised as work in progress in the draft statement of financial position. Deferred income of $200,000 is also recognised as a current liability, representing a payment made by BMC to finance part of the design costs. No other accounting entries have been made in respect of the contract with BMC.

As part of our subsequent events review, inspection of correspondence between Kowloon Co and BMC indicates that the contract has been cancelled by BMC as it is unable to pay for its completion. It appears that BMC lost a significant amount of funding towards the end of 2015, impacting significantly on the financial position of the company. The manager responsible for the BMC contract confirms that BMC contacted him about the company’s financial difficulties in December 2015.

The matter has been discussed with Kowloon Co’s finance director, who has stated that he is satisfied with the current accounting treatment and is not proposing to make any adjustments in light of the cancellation of the contract by BMC. The finance director has also advised that the loss of BMC as a customer will not be mentioned in the company’s integrated report, as the finance director does not consider it significant enough to warrant discussion.

Kowloon Co is currently working on six contracts for customers other than BMC. Our audit evidence concludes that Kowloon Co does not face a threat to its going concern status due to the loss of BMC as a customer.’

Your review of the audit work performed on going concern supports this conclusion.

Required:

(i) Comment on the matters to be considered, and recommend the actions to be taken by the auditor; and (7 marks)

(ii) Explain the audit evidence you would expect to find in your review of the audit working papers. (5 marks)

Task 1 ①Unlike Britain, the US does not have a national health care service. The government does help pay for some medical care for people who are on low incomes and for old people, but most people buy insurance (保险) to help pay for medical care. The problems of those who cannot afford insurance are an important political subject. ②In Britain, when people are ill, they usually go to a family doctor first. However, people in America sometimes go straight to an expert without seeing their family doctor first. Children are usually taken to a doctor who is an expert, in the treatment (治疗) of children. In Britain, if a patient needs to see a specialist doctor, their family doctor will usually recommend a specialist. ③Doctors do not go to people's homes when they are ill. People always make appointments to see the doctor in the doctor's office. In a serious situation, people call for an ambulance (救护车). In America, hospitals must treat all seriously ill patients, even if they do not have medical insurance. The government will then help pay for some of the cost of the medical care. 题目： Some medical care is paid by the U.S. government for __________.

A、people living in the country

B、non-government officials

C、people with insurance

D、the poor and the old

(b) A sale of industrial equipment to Deakin Co in May 2005 resulted in a loss on disposal of $0·3 million that has

been separately disclosed on the face of the income statement. The equipment cost $1·2 million when it was

purchased in April 1996 and was being depreciated on a straight-line basis over 20 years. (6 marks)

Required:

For each of the above issues:

(i) comment on the matters that you should consider; and

(ii) state the audit evidence that you should expect to find,

in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended

31 March 2006.

NOTE: The mark allocation is shown against each of the three issues.