Part A 4b)

There are two kinds of auditors, internal and external. The primary role of auditors is to express an opinion on whether entities in financial statements are free of misstatements. Auditors want to make sure that company's financial statements are true and fair representation of the companys status. They conducted their audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements. For internal auditors, there will be Audit Committee meetings to review the annual financial statements of the Company and the remuneration of external auditors. They will discuss with the external auditors their independence and the nature and scope of the audit. They will also evaluate the system of internal controls and risk management of the entity. The independence of external auditors is crucial to a correct appraisal of an entity's financial controls and statements. Any relationship between the external auditors and the entity must be disclosed in the external auditor's reports. These rules also prohibit the auditor from owning a risk in public clients and limit the types of non-audit services that they can provide.

Part B 2a)
Caf de Coral Holdings, Ltd is one of the major fast food chains in Hong Kong. It was incorporated in 1968 in Bermuda with limited liability. The first caf was opened in 1969 in Causeway Bay. It became public listed in July of 1986 on Hong Kong stock exchange. Now, Caf de Coral group is the largest Chinese Fast Food restaurant group in Hong Kong and in the world. Apart from fast food shop, Caf de Coral also acquired some restaurants brands in Hong Kong, like the Spaghetti House, Manchu Wok, Oliver's Super Sandwiches, Ah Yee Leng Tong and others. On March of 2007, Caf de Coral invested on Tao Heung Group buying 11.65% of the stock. Caf de Coral chain serves over 300,000 people on a normal day. Now, the headquarters of Caf de Coral is in Shatin. The chairman of Caf de Coral is Chan Yue Kwong, Michael. The famous slogans include Work 100% for you and See you in Caf de Coral. The website of Caf de Coral is http://www.cafedecoral.com. The profit of it was about 420 million in 2008. Caf de Coral has about 12,000 employees now. Net value of the company is about 2.9 billion. Caf de Coral also started to open restaurants in Mainland China and Macau since 1992. The shops are mainly in Guangdong Province.