1 (a) Evaluation of audit risk
Generally up to 2 marks for each well explained audit risk. In addition, 1 mark for each correct materiality
calculation to a maximum of 2 marks and 1 mark for each relevant calculation such as trends.
– Recognition of 50% equity shareholding in WTC
– Amortisation of licence to operate in Farland
– Possible impairment of licence
– Right to use network capacity
– First-time adoption of IFRS 15
– Revenue recognition – max 5 marks if discuss a range of issues specific to IFRS 15 including multiple
element contracts, timing of recognition, disclosure requirements, volume of transactions
– Internal controls and fraud risk – up to 4 marks for a detailed discussion of fraud risk
– Segmental reporting
Maximum marks 14