The Audit and Assurance Examiner's Report for September/December 2025 provides insights into candidates' performance in the exam. It highlights strengths and weaknesses observed during the marking process, offering constructive advice for future candidates. The report covers key areas such as objective test case questions and constructed response questions, detailing common knowledge gaps and exam techniques. This resource is essential for students preparing for the Audit and Assurance exam, helping them understand critical areas for improvement.

Key Points

  • Analyzes candidates' performance in the Audit and Assurance exam
  • Identifies strengths and weaknesses in exam responses
  • Offers guidance on improving exam techniques and knowledge gaps
  • Covers both objective test questions and constructed response questions
Cookie Babu
21 pages
Language:English
Type:Report
Accounting
Cookie Babu
21 pages
Language:English
Type:Report
Accounting
329
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Examiners report – AA September/December 2025 1
Audit and Assurance
(AA)
September/
December 2025
Examiner’s report
The examining team share their observations from the
marking process to highlight strengths and weaknesses
in candidates’ performance, and to offer constructive
advice for those sitting the exam in the future.
Contents
General comments ....................................................... 2
Section A ..................................................................... 3
Question one ............................................................ 3
Question two ............................................................ 4
Question three .......................................................... 4
Question four ............................................................ 5
Question five ............................................................. 5
Section B ..................................................................... 7
Quirky Quadbikes Co ................................................ 7
Requirement (a) – 3 marks ...................................... 7
Requirement (b) – 18 marks .................................... 8
Requirement (c) – 5 marks .................................... 10
Requirement (d) – 4 marks .................................... 11
Survival Solutions .................................................... 13
Requirement (a) – 3 marks .................................... 13
Requirement (b) – 3 marks .................................... 13
Requirement (c) – 14 marks .................................. 14
Flatiron & Co ........................................................... 17
Requirement (a) – 5 marks .................................... 17
Requirement (b) – 5 marks .................................... 18
Requirement (c) – 5 marks .................................... 19
Requirement (d) – 5 marks .................................................. 20
Examiners report – AA September/December 2025 2
General comments
The Audit and Assurance exam is offered in computer-based (CBE) format. The model of delivery
for the CBE exam means that candidates do not always receive the same set of questions. In this
report, the examining team share their observations from the marking process to highlight
strengths and weaknesses in candidates’ performance, and to offer constructive advice for
future candidates.
• Section A objective test (OT) case questions – here we look at the key challenge areas for this
section in the exam.
• Section B constructed response questions - here we provide commentary around some of
the main themes that have affected candidates’ performance in this section of the exam,
identifying common knowledge gaps and offering guidance on where exam technique could
be improved, including in the use of the CBE functionality in answering these questions.
There are two sections to the examination and all the questions are compulsory. Section A
consists of three OT cases each comprising five OT questions for a total of 30 marks, which cover
a broad range of syllabus topics. In Section B candidates are presented with one constructive
response question worth 30 marks and two constructive response questions worth 20 marks
each testing the candidates’ understanding and application of audit and assurance in more
depth.
In order to pass this examination, candidates should ensure they devote adequate time to obtain
the required level of knowledge and application. Candidates who do not spend sufficient time
practicing questions are unlikely to be successful as the written questions in particular aim to
test candidate’s application skills.
Examiners report – AA September/December 2025 3
Section A
Example of a case scenario
It is 1 July 20X5. You are an audit manager at Red & Co and your firm has recently been
approached by the directors of Colour Co to accept appointment as the company's auditor. The
directors are unhappy with the services being provided by the existing auditor, Blue & Co, and the
company is in the process of removing them.
Services to be provided
The directors of Colour Co have requested that Red & Co provides several services including the
following:
(1)
Preparation of the 20X5 financial statements
(2)
Assessment of the effectiveness of internal controls
(3)
Installation and set-up advice in relation to new accounting software
(4)
External audit for the year ending 30 September 20X5
In addition, the finance director of Colour Co has prepared a five-year profit forecast which is
needed to support a bank loan application. The figures have been based on the most recent
management accounts. Colour Co has requested that Red & Co reviews this forecast as an
additional service.
Question one
Which of the following are rights of Blue & Co relating to its removal as auditor of Colour Co?
(1)
To receive notice of the intended removal
(2)
To access the books and records of the company
(3)
To attend the meeting of the board of directors where the removal is discussed
(4)
To speak at the general meeting of shareholders at which its term of office would have
expired
A. 1 and 4 only
B. 2 and 4 only
C. 1 and 3 only
D. 1, 2, 3 and 4
The correct answer is A.
(1) and (4) are rights on removal.
(2) is a right of the auditor during the engagement.
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End of Document
329

Figures

When issuing a report on the five-year profit forecast, the level of assurance given will be limited

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FAQs

What are the key components of Section A in the Audit and Assurance exam?
Section A of the Audit and Assurance exam consists of three objective test case questions, each containing five questions for a total of 30 marks. This section covers a broad range of syllabus topics, requiring candidates to demonstrate their knowledge and application skills. The questions are designed to test candidates' understanding of key concepts in audit and assurance.
What is the purpose of obtaining an understanding of internal control in an audit?
Auditors obtain an understanding of internal control to identify risks and assess the design and implementation of controls. This understanding helps auditors determine whether they can rely on the controls to reduce substantive testing. It is crucial for identifying potential misstatements and ensuring that the audit is conducted effectively.
How are marks awarded in the requirement for identifying deficiencies in internal controls?
Marks are awarded for identifying deficiencies based on specific criteria: ½ mark for identification of each deficiency, ½ mark for explaining the implication of the deficiency, 1 mark for recommending a control to address each deficiency, and 1 mark for describing a test of control for each recommendation. Candidates must provide detailed and relevant responses to gain full credit.
What are the common themes affecting candidates' performance in Section B of the exam?
Common themes affecting candidates' performance in Section B include a lack of understanding of the requirements, insufficient detail in answers, and failure to apply knowledge to the specific scenario provided. Candidates often struggle with identifying relevant deficiencies and providing practical recommendations. It is emphasized that thorough reading and comprehension of the scenario are critical for success.
Which two services requested by Colour Co are considered assurance engagements?
In the case of Colour Co, the services considered assurance engagements are the assessment of internal controls and the external audit. These services provide an opinion or conclusion, which is a key characteristic of assurance engagements. Other services, such as preparation of financial statements and installation advice, do not qualify as assurance engagements.
What is the significance of limited assurance in the review of a profit forecast?
Limited assurance in the review of a profit forecast indicates that the auditor can only provide a negative conclusion regarding the appropriateness of the assumptions used. This means the auditor cannot guarantee that actual results will align with the forecasted figures. The conclusion reflects the inherent limitations of a review engagement, emphasizing the need for careful assessment of the underlying assumptions.
What are some recommended substantive procedures for auditing payroll expenses?
Recommended substantive procedures for auditing payroll expenses include agreeing net pay to payroll records and bank statements, recalculating gross to net pay for a sample of employees, and performing analytical review procedures. These procedures aim to ensure the accuracy and completeness of payroll records, providing sufficient and appropriate audit evidence.

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