This 20-mark question was based on a manufacturing company Greenfields Co and tested candidates’ knowledge of accounting estimates, written representations and audit reports.

Part (a) for 5 marks required audit procedures for accounting estimates. This question was answered satisfactorily. The question was not specifically related to the two issues in the scenario and so candidates who considered general procedures relevant for any estimate such as legal provisions or depreciation scored well.

Many also gave examples of different estimates when providing their procedures. Those candidates who only considered the two issues of the receivable balance and the warranty provision often failed to generate a sufficient number of points.