This 20-mark question focussed on professional scepticism, the audit of goodwill impairment, and a forensic investigation into alleged bribery payments made by several of the audit client’s employees.

Requirement (a) was a five mark discussion, asking candidates to explain the meaning of the term professional scepticism and to discuss its importance in planning and performing an audit.

It was clear that many candidates had read and understood the contents of a recent article on the topic of professional scepticism. Most answers provided an appropriate definition of professional scepticism and went on to discuss how it links to audit quality.

Stronger candidates also discussed how the auditor should apply professional scepticism when considering the risk of material misstatement associated with fraud and areas of the financial statements that rely on the application of judgment.

Few candidates however, discussed the recent activities of the regulatory bodies in respect of professional scepticism.