This question was in the style of a typical paper P7 question, set in the completion stage of an audit, and asking candidates to comment on the matters to be considered, and the audit evidence that should be expected to be found during the review of the audit files by the audit manager. Candidates were well prepared for this type of question, and as one of the optional questions, it was attempted by the majority of candidates.

Requirement (a) was for 8 marks, and described a number of properties that had been classified as held for sale.

Information was given on the carrying value and fair value less cost to sell of the properties. Most answers were satisfactory, largely because candidates were confident in explaining the relevant financial reporting requirements and applying them to the brief scenario.

The audit evidence points were sometimes a little vague, for example “discuss with management”, “get management representation”, “review board minutes”, and only a limited amount of credit could be awarded for such comments. However generally there has been an improvement in how well audit evidence is described, and in many cases the answer points were sufficiently precise and detailed.