Candidates were expected to discuss the benefits of forming an audit committee using information from the scenario to support their comments.

The question was worth 12 marks. Given that the question contained a scenario, and the requirement verb was discuss, candidates could expect up to 2 marks per point made; 1 mark for explaining the benefit of an audit committee and 1 mark for showing how this applied to the scenario. In some answers, this marking guide was recognised and some satisfactory answers showing how an audit committee could assist the company in the scenario were produced.

Many answers, however, tended to list the benefits of an audit committee with little or no reference to the detail in the scenario. These answers still obtained 1 mark per point for identifying and explaining the benefit and obviously needed double the number of points to obtain full marks.

The standard of answer was satisfactory. Many candidates obtain a clear pass standard.

The main weakness in many answers was explaining the constitution of the audit committee or the work of other committees rather than the benefit of an audit committee.

Example comments provided and reasons why those comments did not obtain a pass standard are noted below:

Answer comment 
“The audit committee will comprise non-executive directors (NEDs) who will review the work of executive directors ensuring they are working in the best interests of shareholders.”

Examiners assessment of comment 
This is not a benefit of internal audit, but a general comment on why NEDs are expected in a company. The point is therefore not relevant to the question asked.

Answer comment 
“The audit committee and assess the need for new directors on the board of Conoy, such as the finance director, and assist in identifying and recruiting those directors”.

Examiners assessment of comment 
The point would be correct, if it related to the nomination committee. However, as the question relates to benefits of the audit committee, the point is again not relevant.

Overall, this question was answered well. The question obviously benefited those candidates who could apply knowledge to a scenario (therefore explaining 6 points for 12 marks) and those who had good knowledge (explaining 12 points for 12 marks).