Part (d) for 4 marks required substantive procedures in respect of the year end accrual for tax payable on employment income. Where answered, performance on this requirement was disappointing.

Candidates were provided with a short scenario to explain how the employment taxes were remitted to the taxation authorities and that at the year end there would be an accrual for any outstanding amount. The scenario was provided so that candidates could apply their knowledge of accruals to the specific circumstances; however from the answers provided it seems that some did not take notice of detail provided.

Many answers demonstrated that candidates did not know what a tax accrual was and hence suggested procedures focused on “discussions with management” or “obtaining written representations”.

This accrual was not judgemental and so the above procedures would not have scored many marks. Those candidates that scored well suggested answers such as “recalculation of the accrual,” “comparison with prior year or months” and “verifying the subsequent payment after the year end”.