(a) Audit risk evaluation
Up to 3 marks for each audit risk, (unless indicated otherwise). Marks may be awarded for other, relevant audit risks not included in the marking guide.
In addition, ½ mark for relevant trends or calculations which form part of the evaluation of audit risk (max 3 marks).
Materiality calculations should be awarded 1 mark each (max 4 marks).
– New audit client (2 marks)
– Upgrade and maintenance costs
– Component depreciation
– Related party transaction disclosure
– Borrowing costs
– Operating licences
– Revenue and profit trends
– On-board sales
– Revenue recognition
– Cyber-security breach (control risk, corporate governance weakness, data corruption, financial statement implications – max 5 marks)
Maximum marks 26