Candidates were expected to explain the benefits of using audit software and the problems in a specific audit where using audit software was one of those problems.

The question was worth 14 marks. Part (i) was worth 4 marks; candidates explaining 4 benefits obtained full marks. Part (ii) was worth 10 marks with the more complicated requirement to explain problems and then show how each problem could be overcome.

The general marking guide for this question is 0.5 marks for identifying the problem. 0.5 mark for explaining it and finally 1 mark for showing how it could be overcome. A candidate explaining 5 problems would therefore obtain full marks.

Most candidates provided sufficient points in their answers; although a minority spent too much time on (ii) by including up to 8 or 9 points; marks in this situation had to be capped at the stated 10. 
In part (i), most candidates demonstrated basic knowledge of the use of audit software explaining the “standard” benefits of time, cost, use of actual data in the computer etc.

A few candidates made some good links to the scenario, for example, explaining how data could be amalgamated to avoid having to visit the 25 branches in the company.

In part (ii), again most candidates provided a range of valid points and obtained decent marks. However, common weaknesses in this section included:

• Not explaining had to overcome the weakness either by omitting this comment or by making unrealistic comments. For example, in terms of potential damage to client systems from the use of test data suggesting the weakness would be overcome by “being careful” or in a handful of answers by simply not accepting the audit engagement. 
• Suggesting weaknesses that were not mentioned in the scenario. For example, suggesting that inventory valuation would be difficult as experts on car parts were difficult to find, or that the auditor had to attend all 25 locations simultaneously to prevent the client double counting inventory in more than one location. 
• Recommending amendments to the client systems for other perceived weaknesses. For example, stating that a distributed processing system was not appropriate for the client and recommending a centralised system instead. Even if this was a recommendation to the client, it would not affect audit planning now and so was not relevant as a current audit problem.

Example comments provided and reasons why those comments did not obtain a pass standard are noted below (for part (ii)):

Answer comment 
“The audit cannot obtain sufficient information on the client’s system in the time allowed and so should resign.”

Examiners assessment of comment 
The answer has started to identify a weakness although this is not clearly explained. However, the solution of resigning the audit is not really acceptable as the client has only just been accepted; other methods of overcoming the problem such as careful planning, use of experienced staff or approaching the client for an extension of the audit deadline are more relevant.

Answer comment 
“Inventory must be valued at the lower of cost and net realisable value. To overcome this problem the auditor must attend all 25 inventory locations.”.

Examiners assessment of comment 
The inventory valuation method mentioned is correct; however, there is no indication in the scenario that inventory valuation is a problem. The fact that the auditor must attend all 25 locations also does not overcome this problem; attendance at inventory count is more concerned with existence while valuation focuses more on cost and sales evidence.

The standard of answers for this question was satisfactory.