Candidates were required to explain audit procedures on the credit card receivables balance. 
The question was worth 4 marks. Therefore including 4 relevant procedures in the answer would obtain all marks on offer. Most candidates mentioned 4 (or sometimes fewer) procedures although a minority mentioned more than 4.

Most candidates appeared to understand the question and provided an appropriate range of procedures. In other words, even though the concept of a credit card receivable may have been unfamiliar, candidates were able to apply their knowledge to the audit of receivables in general terms and therefore mentioned relevant procedures such as direct confirmation using after-date receipts to confirm year-end balances.

The main weakness in many answers was the confusion between the audit of sales and the audit of receivables.

A significant minority of candidates explained how the total sales figure could be audited, for example, testing receipts through the sales day book to recording in the sales ledger. While answers were factually correct, they did not relate to receivables testing and could not therefore be awarded credit.

Example comments provided and reasons why those comments did not obtain a pass standard are noted below:

Answer comment 
“Check the receivables figure in the financial statement.”

Examiners assessment of comment 
The audit procedure is not clear – the use of the term “check” almost always causing this weakness. Check the figure to what – why?? A clearer procedure such as “obtain the year end list of receivable balances, cast the list and agree the total to the general ledger and financial statements” was required here.

Answer comment 
Post the totals from the sales day book to the sales ledger.

Examiners assessment of comment 
While there is some benefit in the procedure, it did not relate to the audit of year end receivables and was therefore not relevant to the question requirement.

Other common errors included:

• Listing the methods of collecting audit evidence such as inspection and enquiry. 
• Listing audit assertions for receivables without linking these to valid audit procedures.

The standard of answers tended to be varied. Inadequate answers tended only focus on sales procedures, with satisfactory standard answers focusing on procedures relevant to receivables.