Question 2c was worth 2 marks and required candidates to explain the term “modified”. 
Most candidates appeared to understand that modified meant that an audit report was not “clean” or “standard”.

Types of modification including emphasis of matter and qualifications of limitation in scope and disagreement were then explained.

However, there were two overall weaknesses in many answers:

• Firstly, the assumption that a modified report meant that a previous audit report had been amended due to events after the reporting period occurring. The “old” report had effectively been recalled and “modified”. 
• Secondly, explaining modified in terms of emphasis of matter only; whereas modified can also include a qualified report.

One other concern was the minority of candidates who provided a page or more of answer for what was only 2 marks. Those marks were normally obtained within the first paragraph meaning the rest of the answer was not required. In this situation, poor examination technique led to time pressure later in the examination.

In summary, the standard of answer was unsatisfactory due to the confusion about this straight-forward auditing term.