Question 2a ii
Marking Guide

Audit implications

Generally up to 1½ marks for each implication assessed and 1 mark for each impact on the financial 
statements identified:

Legal claim:

– Immaterial individually but material to profit when combined with inventory adjustment
– Financial statements materially misstated when two issues combined – implication for opinion
– Suitability of verbal representation as source of evidence
– Recommended procedures (1 mark each)