Part (b) for 9 marks had three sub requirements; an identification and explanation of deficiencies in the cash cycle, controls to address these deficiencies, and tests of controls to assess the effectiveness of the controls.

The first two parts of these three sub requirements were answered well by almost all candidates, many scored full marks. Where candidates did not score full marks this was usually due to the fact that they had not explained the deficiencies and controls in sufficient detail or because they identified deficiencies/controls which were unrealistic, such as suggesting that all customers should be required to pay by BACS rather than by cash/cheques or suggesting that only senior members of the finance team should be allowed to open the post.

The third sub requirement for tests of controls was not well answered. Following on from comments made in relation to question 3a, candidates do not seem to understand what a test of control is and how it operates.

Many provided unsatisfactory tests such as “observe the post” or they provided substantive procedures instead.

The question required three deficiencies, controls and tests of control and it was pleasing to see that the vast majority of candidates were able to clearly identify only the required number of points.

Many candidates presented their answers in a columnar format and this seemed to provide clear and concise answers which covered all parts of the requirement. Some answered just the first two sub requirements in columns whilst others answered all three parts in columns; either approach was acceptable.