Part (d) for 7 marks required substantive procedures for bank and cash at the year end. Performance on this question was unsatisfactory. Substantive procedures are a key area of the paper and may feature in each session.

Some scripts were with hardly any valid bank and cash procedures. Tests which start with “to ensure that” are unlikely to gain any marks as these are objectives rather than audit tests. Also some candidates failed to read the question requirement which stated that the audit was of year end cash and bank; these answers focused more on tests of controls over the whole of the year for cash and bank, these did not gain any credit.

Some candidates focused on the bank reconciliation and auditing its detail, such as unpresented cheques and outstanding lodgements. Most candidates were able to suggest obtaining a bank confirmation letter and counting petty cash, however this seemed to be the extent of many answers.

It was unsatisfactory to see that many candidates did not understand the purpose of the bank reconciliation as a common answer was “to agree the bank confirmation letter to the financial statements” as opposed to the bank reconciliation. Many provided vague answers such as “cast the ledger” and a minority misunderstood the question and focused on auditing payables and receivables.