Question 2 was for 25 marks, and contained two separate requirements in relation to the same client, the Retriever Group. The first requirement was largely based around quality control and ethics, the second to do with a forensic investigation. The scenario provided was not long, and candidates did not appear to be time pressured when attempting this question.

Requirement (a) was for 13 marks. The scenario described various matters that had arisen during the performance of the audit as described one of the audit juniors, including time pressure, deviations from the audit plan, and the type of work that had been performed by the audit juniors, some of which was inappropriate. The requirement asked candidates to evaluate the quality control, ethical and other professional issues arising in the planning and performance of the audit. Answers on the whole were satisfactory, and candidates seemed comfortable with applying their knowledge of quality control requirements and ethical threats to the scenario.

Most answers were well structured, working through each piece of information and discussing the matters in a relevant way. There were a number of scripts where the maximum marks were awarded for this requirement.

The common strengths seen in many answers included: 
• Identifying that the audit had not been planned well, as it was time pressured and the allocation of tasks to audit juniors was not commensurate with their knowledge and experience. 
• Discussing the problems in the direction and supervision of the audit, including the significant issue of the audit manager instructing the juniors not to follow planned audit procedures. 
• Appreciating that review procedures were not being performed in accordance with ISA requirements, and that audit juniors did not know the limit of their responsibilities. 
• Explaining the ethical threats caused by the audit junior’s inappropriate work on deferred tax and tax planning. 
• Describing the lack of competence and integrity of the audit manager in allowing the audit to be performed to such poor quality. 
• Recommending that the audit team members receive training on quality control and ethical issues, and that the audit files should be subject to a detailed quality control review with a view to some areas of the audit possibly being re-performed.

It was especially encouraging to see that most candidates were not just able to identify the problems but could also explain and evaluate them to some extent.

There were satisfactory answers to this requirement, but some answers tended to simply describe the relevant ISA and ISQC requirements in relation to quality control with little application to the scenario. Some answers also tended to suggest that the audit team members should all be disciplined and / or reported to ACCA for “misconduct”.