Part (c) for 6 marks required a description of going concern procedures. Candidates’ performance was mixed in this area.

Those candidates who failed to score well produced vague procedures such as “obtain the cash flow forecast,” “review board minutes” and “discuss with management”. These examples lack the detail of what the actual procedure involves and therefore limit the amount of credit that can be awarded.

In addition some procedures were unrealistic such as asking the bank to confirm whether it will renew the overdraft facility when the scenario made it clear that the bank would only make such a decision after seeing the audit report. Candidates must use the scenario and be practical when generating audit procedures.