Part (b) for 8 marks required substantive procedures for depreciation and a contingent liability for a food poisoning case. Performance on this question was unsatisfactory. A significant minority did not even attempt this part of the question.

Candidates’ answers for depreciation tended to be weaker than for the food poisoning. On the depreciation many candidates did not focus their answer on the issue identified, which related to the depreciation method adopted for the capital expenditure incurred in the year. In the scenario the issue was headed up as depreciation and so this should have given candidates a clue that they needed to focus just on depreciation.

However, a significant proportion of answers were on general PPE tests often without any reference at all to depreciation. In addition many felt that generic tests such as “get an expert’s advice” or “obtain management representation” were appropriate tests; they are not.