Part (b)

Candidates were required to explain the meaning and purpose of five different extracts from an audit report.

The requirement verb for this section was explain; along with the two key terms of meaning and purpose for five extracts the marking scheme was clear; five points with two marks each.

Some candidates recognised this split and provided two paragraphs for each of the five extracts. Other answers tended to focus on the meaning of the extract with little or no comment on the purpose of that part of the report.

To be clear, the distinction between meaning and purpose should be as follows; “meaning” related to explaining the extract while “purpose” to stating why the extract was in an audit report. Many candidates struggled to explain why the extracts were included in an audit report.

Common errors and reasons why those errors did not obtain marks included:

The overall standard for this section was satisfactory. However, along with question 2a, the question also identified a lack of basic knowledge. Candidates and tutors are again reminded of the importance of being able to explain audit reports clearly in the context of this examination.

Part (c)

Candidates were required to explain the effect of two different situations on an auditors’ report.

The short scenario presented two situations, with key terms embedded in the scenario, with the requirement to state the effect on the audit report. The marking scheme was therefore clear; four marks for two requirements gave two marks per requirement.

For part (ii), candidates were expected to recognise that not attending the inventory count resulted in uncertainty, but inventory was only material to the financial statements. An “except for” qualification was therefore expected.

Common errors and reasons why those errors did not obtain marks included: