Part (ci) for 4 marks required a description of four audit procedures that could be carried out for inventory using CAATs. Performance on this question was unsatisfactory.

Candidates needed to apply their knowledge of CAATs to inventory procedures, many failed to do this. Again lots of candidates did not read the question properly and so despite the requirement to apply their answer to inventory, they proceeded to refer to tests on receivables and payables.

Also many candidates appear not to actually understand what CAATs are, who uses them and how they work. Therefore many answers focused on the company using CAATs rather than the auditor, many procedures given were not related to CAATs for example “discuss inventory valuation with the directors” or “agree goods received notes to purchase invoices”.

Those candidates who scored well tended to mainly focus on analytical review procedures for inventory that could be undertaken as part of audit software tests.

Part (cii) for 4 marks required an explanation of the advantages of using CAATs. This question was on the whole answered well.

Candidates were able to identify an adequate number of advantages to score well on this part of the question. The main advantages given related to saving time; reducing costs; improving the accuracy of testing and the ability to test larger samples. A minority of candidates failed to explain their advantages; answers such as “saves time” were commonly provided, this is not an explanation and so would not have scored well.

Part (ciii) for 4 marks required an explanation of the disadvantages of using CAATs. Again, this part of the question was answered well.

Like in (cii) candidates were able to identify an adequate number of points to score well. The main disadvantages given related to increased costs; training requirements and the corruption of client data.

It was apparent here and for (cii) that candidates had learnt a standard list of points for CAATs, however some candidates did try to apply their knowledge of standard advantages and disadvantages to inventory.