Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Copy paste when identifying risk
- This topic has 7 replies, 2 voices, and was last updated 3 years ago by Kim Smith.
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- December 7, 2020 at 9:24 am #597985
In a audit risk question if we copy paste the risk from the scenario is it okay or will Mark’s be cut for that?
December 7, 2020 at 11:39 am #598037There is no “negative marking” – so marks won’t be deducted – but nor will you get credit for mere restatement of the question scenario – please see my sticky posts at the top of this forum for sources of guidance to exam technique.
December 7, 2020 at 5:45 pm #598153Thank you for your reply I went through it, but I still have a small doubt and appreciate it if you could clarify it.
Scenario
Net pay and gross pay calculated through the payroll system and as these are computerised calculations, no review of the calculation is performed.So now when answering can we copy paste this from the scenario and then further explain how that is a risk. Then will we get the 0.5 marks for identification of risk if we copy paste it from the scenario?
Also I must mention OT has been a lifesaver for me. Keep up the good work. All the best
Thanks in advance 🙂
December 7, 2020 at 6:17 pm #598166Please tell me which question this comes from.
December 8, 2020 at 1:18 am #598242From the exam paper which I sat for yesterday
December 8, 2020 at 7:30 am #598289Ah that explains why I didn’t recognise it.
Let’s put it this way – if you go on to give a sentence which explains what the risk is with reference to inherent/control/detection risk or a financial statement assertion or under/overstatement (i.e. in accordance with the examiner’s guidance in the examiner’s report) then it gets the full mark. Or another way of looking at it is like this – you can’t really explain a risk without identifying it – so a good sentence of explanation is what is getting the mark.
So looking at it in this way it doesn’t matter whether a sentence is copied from the scenario as long as it makes sense.But if ALL a candidate did was copy and paste eight (say) sentences from a scenario and nothing else would they get 4 marks for it? I think as long as the pinpointed where the risk is then yes – but if it’s not clear that the student knows where the risk is – then no.
December 8, 2020 at 4:21 pm #598445@kim Thank you for the clear explanation.
But what I did was to save time I copy pasted the line which represented the risk from the scenario and explained how that is the risk.
So my question is will I get the 0.5 mark for identification of the risk even if I just copy pasted the sentence from the scenario. Like my example
“Net pay and gross pay calculated through the payroll system and as these are computerised calculations, no review of the calculation is performed.” I copy paste that from the scenario and then further explain saying…
There is a risk that there may be errors in the calculation which may go unnoticed as the calculations performed by the system is not reviewed which could lead to incorrect salaries being paid to employees either increasing costs or causing employee dissatisfaction.
Will I get the 0.5 for identification of risk and 0.5 for explanation. As you mentioned.
Audit is a tricky subject and I’m so grateful for OT for having responsive lecturers like you to help students out
December 8, 2020 at 5:17 pm #598484I think you get 1/2 for recognising the risk of error – but incorrect salaries paid to employees, increased costs and employee dissatisfaction are business risks – NOT audit risks.
Audit risks must be explained in terms of inherent/control/detection risk OR a financial statement assertion OR under/overstatement.
In this case the inherent risk is that systematic errors could arise because the calculations are programmed. There are no controls to reduce the risk that any errors will go undetected (control risk) – so will not be corrected. Although individual errors are small, they could accumulate to result in material misstatement. This is more likely to be overstatement than understatement because employees are hardly likely to complain if they are overpaid(!)
I could go on … if tax deduction are incorrect, there could be penalties/fines for incorrect returns/shortfalls in payments, etc. There is then a further risk of MISSTATEMENT IN THE FINANCIAL STATEMENTS that penalties have not been provided for – i.e. liabilities are understated.
The focus of an audit risk question HAS to be on what it means to the auditor – not management.
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