In this knowledge question, candidates were required to explain the factors affecting the auditor’s decision on how much evidence to collect.

The question was worth 4 marks. The two requirement verbs of list and explain implied that four points were necessary to obtain full marks. For each point, 0.5 was allocated for identifying the relevant factor and 0.5 for the explanation. Most candidates identified this split and provided four points, many using headings to help identification of those points.

Example comments provided and reasons why those comments did not obtain a pass standard are noted below:

Answer comment
“Third party evidence is more reliable than client evidence”

Examiners assessment of comment
This comment is correct to identify the point; stating why the evidence is more reliable e.g. mentioning independence, would help to obtain the second half mark.

Answer comment
“High-quality internal control systems”.

Examiners assessment of comment
Again, there is a lack of explanation to show how these affect the sufficiency of evidence. Stating that good internal systems decrease control risk and therefore the amount of evidence to collect would obtain the full mark.

Other common errors included:
• Writing far too much for each of the individual points. Given the marking scheme of one mark per point, one good sentence per point only was required to obtain the full mark. A significant minority of candidates provided a full paragraph of explanation per point made, which was simply not necessary. The learning point here is that briefer answers are acceptable as long as they are full sentences.
• Not providing sufficient breadth of answer. In many answers, a significant number of points were either repeated, or the candidate focused on reliability of evidence, which is only one aspect of sufficiency. Marking was relatively lenient in this area, but candidates provide a good breadth of comment (quality, risk, controls etc) generally obtained a higher standard of answer than those simply focusing on reliability.
• A minority of candidates explained the audit risk model for this section. While some credit could be given for inherent risk and control risk, this was not the case for detection risk. The latter is a result of assessment of the other risks and as such would not be controllable by the auditor in terms of evidence to be collected.

The overall standard was satisfactory.