Part (c) for 6 marks required three substantive tests in relation to the completeness and accuracy of royalty charges. There was also within this question a requirement to state the objective of each test. This question proved to be challenging for a large number of candidates and there were some disappointing answers.

Many provided procedures which tested sales income as opposed to royalty charges. Procedures such as ‘agreeing sales invoices to the customer master files’ were common, but these do not consider how to gain comfort over royalties.

In addition the question asked for substantive procedures, but many candidates gave tests of control. Candidates need to understand the difference between a substantive procedure and a test of control.

Many candidates failed to provide the objective of their tests and hence missed out on marks. A proportion of candidates presented their answer in a columnar format with a column for the procedure and one for the objective. This seemed to maximise their marks as it reminded them of the second sub-requirement in part (c).

Many candidates did attempt to link their procedures into the financial statement assertions of completeness and accuracy