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Hello sir! Will the examine give marks for audit risks explanation and responses only if it is present in the marking scheme? Or will he give marks if our explanation and responses are reasonable?
The published answer is generally comprehensive in terms of relevant points. From the examiner’s report you will see that the examiner wants the explanation of risks to be expressed in a particular way – “x may be understated” or “y may be understated”.
If you suggest something that isn’t an audit risk (e.g. a business risk – remember business risk is not examinable in AA) then the marker cannot give credit (for the risk or the response). This is one of the reasons why it’s important when giving the required number of risks to choose those which can be explained (in terms of risk of misstatement) with a good and relevant auditor’s response.
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