(a) Up to 2 marks for each procedure and explanation. 1 for the procedure and 1 for the explanation. Limit procedure to 0•5 if cannot be sustained from Delphic’s systems.

– Cast receivables ledger
– Compare ledger balance to credit limit
– Review balances ensure not excessive
– Calculation of receivables days
– Stratification of balances/audit sample selection
– Verify items in ledger
– Aged receivables analysis
– Other valid tests

Maximum marks 9

Note to markers – no distinction is made between test of control and substantive procedures for this question. Marks can be obtained from either type of test or other relevant uses of audit software e.g. sample selection.

(b) 2 marks for each point. 1 for explaining the problem and 1 for showing how it can be resolved. Tests ideally must be related to the scenario; allow half marks if not related.

– Cost
– Lack of software documentation
– Change in client’s system next year
– Outputs obtained
– Use of copy files
– Old system
– File compatibility
– Other relevant points

Maximum marks 8

(c) Explanation of auditing around computer = 1 mark

1 mark for max two problems 1

– Actual computer files not tested
– Difficult to track errors
– Other relevant points

Maximum marks 3

Total marks 20