This 20-mark question was based on a pharmaceutical company Sycamore Sciences Co (Sycamore).

This question tested the areas of fraud and error, audit risks and responses and review engagements. Part (a) for four marks required an explanation of auditor’s responsibilities in relation to the prevention and detection of fraud and error.

This question was answered unsatisfactorily and candidates need to be better prepared to tackle questions on core auditor responsibilities.

The question required candidates to discuss the auditor’s responsibilities in this area; it did not require an explanation of directors’ responsibilities. Unfortunately many candidates wasted time providing this and there were no marks available for this.

In addition some answers strayed into providing procedures for detecting fraud and error rather than just addressing responsibilities. Candidates are again reminded to read the question carefully and to ensure that they are answering the question that has been set.

The majority of candidates were able to gain marks for reporting fraud to management or those charged with governance, for the auditors’ general responsibility to detect material misstatements caused by fraud or error or that the auditors are not responsible for preventing fraud or error.