Requirement (c) was for 5 marks. This concerned a distribution licence that had been purchased and capitalised as an intangible asset and held at cost. Candidates seemed more comfortable with this requirement than the preceding one, and many discussed all of the relevant financial reporting concerns, particularly in relation to amortisation and / or impairment of the asset. Audit evidence points were usually provided and reasonably well explained.

Overall this was a well attempted question by many. I would however point out that candidates need to think carefully when calculating and commenting on materiality. Most candidates calculated the materiality of every figure given in the question in relation to each of revenue, profit before tax and assets.

By this stage in their studies candidates should appreciate that often this is not necessary, for example there is little relevance in calculating an item of expense in relation to assets. Performing all of these calculations must take some time, and the irrelevant calculations will not generate marks.