Part (bi) for three marks required substantive procedures in relation to auditing supplier statement reconciliations.

Performance on this question was unsatisfactory. A significant minority did not attempt all parts of this question. Most candidates were unable to tailor their knowledge of general substantive procedures to the specific issues in the scenario and question requirements.

Many candidates spotted the terms payables, bank and receivables and proceeded to list all possible tests for these areas. This is not what was required and this approach scored few or no marks. The scenario was provided so that candidates could apply their knowledge.

However it seems that many candidates did not take any notice of the scenario at all. As addressed in previous examiner’s reports candidates must strive to understand substantive procedures, learning a generic list of tests will not translate to exam success as they must be responsive to the scenario.

In part (bi) candidates needed to focus on testing supplier statement reconciliations rather than trade payables in general. The most common correct answer awarded credit was “agree the supplier statements to the payables ledger.”

Very few candidates scored more than 1 mark. Incorrect answers focused on calculating trade payables days or undertaking a payables circularisation.