Candidates were required to explain the weaknesses in the petty cash system of Matalas and then recommend a control to overcome that weakness.

The requirement verbs for this section were again explain and recommend. Candidates were therefore expected to find the control weaknesses in the petty cash system and explain each issue for 1 mark. For each issue a recommendation on how to overcome the issue provided the second mark.

To obtain the full two marks per point, answers would normally take the format “issue 1 is a petty cash weakness in Matalas, because..... . This weakness can be overcome by....” However, as the question requirement did not specify the number of points to make, then any number of valid points could be included in the answer. Most candidates included up to six fairly well explained points in their answer. Again, a minority of candidates provided limited or no explanation of the points made, limiting the marks awarded.

The most interesting point to mark in this question concerned the location of the petty cash box itself. Almost all candidates recognised that it was inappropriate to maintain the petty cash book in public view on a bookcase, with the reason that the box could be stolen easily. However, controls over this weakness varied from simply keeping the box in a safe to using CCTV and employing security guards to ensure the box was not stolen.

Given the (relatively) small amount of money in the box, some controls did appear excessive. However, they were normally marked as valid as certainly in some jurisdictions the control could well be appropriate.

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

A significant number of candidates struggled to provide sufficient reasons. The overall standard was satisfactory which was possibly more an indication that candidates were not always familiar with petty cash systems but that they could identify and comment on weaknesses.