Professional Skills Analysis for CBE Specimen Paper 1.

Question 1 (10 marks)- Rick Group.

Communication (4m)
 (Using the right format (To, From Subject), with suitable sub headers, Intro, Conclusion and
language style)
• Briefing note format and structure use of headings/subheadings and an introduction

• Style, language and clarity appropriate layout and tone of briefing notes, presentation of materiality
and relevant calculations, appropriate use of the CBE tools, easy to follow and understand

• Effectiveness and clarity of communication and answer is relevant and tailored to the scenario

• Adherence to the specific requests made by the audit engagement partner

Analysis and Evaluation (2m)

 (Analysis:-Appraising the information in the case, do calculations where necessary, interpreting case
information)
 (Evaluation:- Providing the necessary implications to issues..)

• Appropriate use of the information to determine and apply suitable calculations (Analysis)

• Appropriate use of the information relating to the sale of the property to design appropriate audit
procedures . (Analysis)

• Effective prioritisation of the results of the audit risk evaluation to demonstrate the likelihood and
magnitude of risks and to facilitate the allocation of appropriate responses. (Evaluation- Do not have to
rank each risk according to their significance one by one, just type the few 2 or 3 most significant risks
on top, followed by the rest..do not need to strictly rank 1 by 1.)

• Balanced discussion of the professional and practical issues when evaluating working with
component auditors in a Group engagement. (Evaluation:- Implications of relying on component
auditors- what happens if they are not competent and objective)

Professional scepticism and professional judgement (2m)

 (Scepticism: Challenging information, disagreeing with client, finding mistakes or errors done by
someone, identifying management biasness, attitude issues, auditor do something wrong(QC control
question)
 (Judgement: - evaluating and prioritizing risks, using judgement to make good decisions and to give
best solutions based on the case scenario)

• Appropriate application of professional judgement to draw conclusions and make informed decisions
following recognition of unusual or unexpected movements, missing/incomplete information or
challenging presented information as part of the risk evaluation
• Determination and justification of a suitable materiality level, appropriately and consistently applied.
(judgment)
• Identification of possible management bias and consideration of the impact on the financial
statements and the possible reasons for management’s preference for certain accounting treatments
• Effective application of technical and ethical guidance to effectively challenge and critically assess
how management has responded to the legal claim and the adequacy of any provision or disclosure
requirements.

Commercial acumen (2m)

 (Having a good know how of the client’s situation and background and being able to make logical
and practical suggestions, and
 have a a good anticipation of what may happen in the future for selected issues

• Use of effective examples and/or calculations from the scenario to illustrate points or
recommendations
 •Appropriate recognition of the wider implications when considering entering into a joint audit
engagement
(A reasonably well prepared student will have no issues to score 3+1+1= 6/10m)

Question 2 (5 marks) (Target between 2 to 3m out of 5)

Professional marks

Analysis and evaluation

 Effective analysis and identification of issues related to fraud and development cost and omissions
in the draft auditor’s report (There is a cross over with Scepticism)

 Appropriate use of the information to support discussion, draw appropriate conclusions and design
appropriate responses (All the procedures and actions suggested, do they related to the
information in the case study or too speculative)

 Appropriate recommendations in relation to necessary actions which reflect the stage of

engagement (Any answers that does not reflect the fact that it is now completion stage will be
affected, e.g some students may assume that we are in planning, e.g for development cost issues,
start writing about audit risk and etc, for the fraud, talking about not accepting the client, not
signing the engagement letter)

Professional scepticism and judgement

 Effective challenge and critical assessment of the conduct and extent of the audit work and
evidence obtained with appropriate conclusions. (Were you able to identify the fact that evidence
obtained from development costs were in sufficient and inappropriate, finance director don’t want
audit team to do work on the fraud- did u challenge this? The amount may not be material becos
the criminal may have given the wrong value? Did u realise this?)

 Appropriate application of professional judgement to draw conclusions and make informed

decisions about the actions which are appropriate in the context and stage of the engagement.
(Relates to having proper judgement in creating the correct actions and procedures for fraud, and
dev cost)

 Demonstration of the ability to probe for further information. Did u try to investigate further?
Through ur actions? Did u question finance director for his instructions to the audit team with
regards to the fraud_

 Also includes the ability to identify the issues or problems in the audit report for critical appraisal.

Commercial acumen

 Inclusion of appropriate recommendation regarding how Those Charged with Governance and
the audit firm should respond to the situation. (Related to actions and procedures designed for
fraud and development cost…can also include the recommendations made to the audit report.)
Question 3 (5 marks)- Target 2 to 3 marks.

Analysis and evaluation

 Appropriate use of the information to support discussion and draw appropriate conclusions

 Appropriate assessment of the ethical and professional issues raised, using examples (from the
case)_ where relevant, to support overall comments

 Balanced discussion of the issues connected to a non assurance engagement, resulting in a

justified conclusion and proposed course of action (preparation of share prospectus)

Professional Scepticism and Judgment

 Effective challenge and critical assessment of the assumptions used by Management in preparing
the cash flow forecast (through the review procedures)

 Demonstration of the ability to probe for further information in order to make an assessment of the
completeness of the cash flow forecast (did u find out anything that could have been missing from
the forecast??)

 Appropriate recommendations and justification of the assurance procedures to be undertaken in

respect of the cash flow forecast (review procedures)

Commercial acumen

 Demonstration of commercial awareness by recognizing wider issues which may affect the
forecast and the assumptions by management. The client acceptance issue that u raised, were
they linked to the client? Ur safeguards for ethical issues- are they logical? Make sense?
Reflecting the reality in the case study?