Part (b) for 14 marks required a report to management which identifies and explains four deficiencies, the implications and a recommendation for each of these deficiencies; in addition a covering letter was required.

This part of the question was answered very well and candidates were able to confidently identify four deficiencies from the scenario. However, candidates did not always adequately explain the implication of the deficiency to the business.

For example, for the deficiency of purchase orders not being sequentially numbered, many candidates focused on the difficulties of agreeing invoices to orders, as opposed to the key issue of unfulfilled orders and hence stock outs.

In addition many implications were vague such as “there will be errors if application controls are not applied by the purchase ledger clerk” this answer does not give any examples of what type of errors and where they may occur. Candidates need to think in a practical manner and apply their knowledge when answering these types of questions.

The requirement to provide controls was, on the whole, well answered. Most candidates were able to provide good recommendations to address the deficiencies. However some of these recommendations were too brief, for example simply stating “apply application controls” to address the deficiency of the purchase ledger clerk.

The main recommendation where candidates failed to maximise their marks was for sequentially numbered purchase orders. Simply recommending “that purchase orders should be sequentially numbered” only scored ½ marks, as the control is to undertake sequence checks, for which the orders need to be sequential. This demonstrated a lack of understanding of this type of control.

A covering letter to the report was required and there were 2 marks available. Despite this specific requirement a significant number of candidates provided their answers as a memo rather than as a letter.

Adopting a memo format resulted in a failure to maximise marks. The two marks were allocated as ½ for a letterhead, ½ for an introductory paragraph, ½ for disclaimers and ½ for a courteous sign off of the letter, which requires more than just a signature.

Many candidates set their answer out in two (three) columns being deficiency, implication and recommendation.

However, those who explained all of the deficiencies, the implications and then separately provided all of the recommendations tended to repeat themselves and possibly wasted some time.

The requirement was for FOUR deficiencies; this session a significant proportion of candidates provided many more than four points, it was not uncommon to see answers with eight deficiencies. Also in many answers deficiencies were combined such as; “purchase orders are not sequentially numbered and only orders over $5,000 require authorisation”, the implications and recommendations would then also be combined. Providing many more points than required and combining answers leads to unstructured answers that are difficult to mark.

Spending too much time on this part of the exam also puts candidates under time pressure for the rest of the paper.