Part (c) for 3 marks required substantive procedures for confirming the directors’ bonus payment made during the year. Candidates’ performance was disappointing.

Unfortunately, many candidates focussed on the authorisation of the bonus; this is not a substantive procedure and would not have scored any marks. A significant minority thought that the directors’ bonus was based on sales which was not the case.

The scenario stated that salesmen’s bonuses were based on sales, hence candidates either confused these two items or failed to read the scenario properly. They then looked to recalculate the bonus based on sales levels which was not appropriate in the circumstances.

A number of vague procedures were suggested such as obtaining written representations or reading board minutes without explaining what for. Analytical procedures were suggested; however they were unlikely to be valid procedures as bonuses by their very nature tend to vary each year.