Part (c) for 3 marks required a description of three limitations of external audits. Performance was inadequate on this question.

This question was left unanswered by a significant minority of candidates. Those who attempted it were often unable to provide more than one relevant answer; the most common correct answer given was with regards to auditors needing to sample rather than testing all transactions.

Some candidates seemed to think the question wanted disadvantages of having an audit, rather than the limitations of an audit, these are two different requirements. The most common incorrect answers given were related to the cost of an audit, ethical threats such as confidentiality and the auditor not understanding the entity.