Candidates were required to explain how they would attempt to resolve an outstanding issue at the end of the audit. The question requirement included the terms “audit procedures” and “actions” to elicit comments such as discussing the matter with the directors, which may not be seen as a clear procedure.

The requirement verb for this section was “state”. In other words, this was a difficult question and the examiner was looking for valid procedures and actions without any detailed explanation as to why those procedures were being carried out. Providing six valid procedures/actions would therefore enable a candidate to obtain full marks.

Obviously, the procedure/action had to be relevant to the scenario.

The short scenario also included the phrase “the audit work has been completed, but there is one outstanding matter” to indicate that audit work was literally complete apart from this matter. The focus of answers had therefore to be on resolving this matter, not on reperforming earlier audit work.

Most candidates focused their answers on the additional audit work. A minority did re-audit buildings in their entirety and normally failed to address at the end of each answer the issue of lack of depreciation.

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

The overall standard for this section was satisfactory. The majority of candidates did obtain marks for contacting the directors, determining the materiality of the situation and considering the effect on the audit report.