Part (biii) for five marks required substantive procedures in relation to the existence and valuation of receivables.
In part (biii) stronger candidates were able to generate tests focusing on analytical review against prior year balances, review of aged receivables listing or discussions with management about an allowance for receivables.
However, a significant proportion of candidates incorrectly suggested undertaking receivables circularisation, including the detailed steps required, this was despite the scenario clearly stating that the finance director had requested that a circularisation not be carried out.
The requirement verb was to “describe” therefore sufficient detail was required to score the 1 mark available per test. Candidates must provide enough tests as they should assume 1 mark per valid procedure. Candidates are reminded yet again that substantive procedures are a core topic area and they must be able to produce relevant detailed procedures.