4 Generally up to 1½ marks for each relevant point explained, to include 1 mark for each action recommended
and ½ mark for identification of ethical threats.
(a) Fee pressure and sampling risk
– Intimidation threat identified and explained
– Fee should not remain the same when the scope of audit is increased
– Discuss with audit committee and communicate with those charged with governance
– Increased materiality level reduces audit work and increases detection risk
– Audit work to be reviewed for completeness and sufficiency (1 mark)
– Use of judgement increases sampling risk
– Some items excluded from sample, so sample cannot be representative of population
Maximum marks 6