(b) Implications for completion of audit
Generally 1 mark for each well explained implication for the audit or recommendation for further action:
(i) Cash transfers
– Indication of money laundering
– Layering
– Weakness in controls over cash
– Need to understand the accounting entries
– Failure to provide evidence
– Increased risk/need for scepticism
– Need for independent review
– Report to MLRO
– Care in avoiding ‘tipping off’

Maximum marks 7
(ii) Legal dispute
– Potential creative accounting
– Material impact on profit for the year
– Review evidence on previous file
– Criteria for recognition (½ each to max of 1)
– Insufficiency of current evidence
– Request for further evidence (1 mark for each well described procedure to obtain further evidence)
– Possible need to reinstate provision to be discussed with management
Maximum marks 6
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