This 10-mark question covered the topics of internal control components and elements of an unmodified auditor’s report.

Part (a) for 5 marks required candidates to state and briefly explain the components of an entity’s internal control as per ISA 315 Identifying and Assessing the Risks of Material Misstatements through Understanding the Entity and Its Environment. Candidates’ performance was unsatisfactory on this question, with a number of candidates not even attempting it.

A significant minority of candidates did not understand the question requirement, or did not have sufficient technical knowledge of this area and so instead of providing components, such as, control environment and control activities relevant to audit, they focused on providing a list of internal controls such as authorisation or segregation of duties controls. Candidates are reminded to read the question requirements carefully and to answer the question asked and not the one they wish had been asked.

ISA 315 is an important element of the F8 syllabus and candidates need to ensure that they have a better knowledge of this area.