ACCA F8 - Audit and Assurance Revision Kit 2016

Part (c) depends on you knowing your assertions so you can stay focused on the relevant substantive procedures.
For each assertion ask yourself, what am I trying to prove with this procedure? For example, with completeness you
are trying to prove no material items are missing from non-current assets. You therefore need to suggest
procedures that might highlight missing assets.
Easy marks. Parts (a) and (c) were more straightforward than (b).
Examination Team's comments. Candidates performed satisfactorily on part (a) of the question.
Part (b) required identification and explanation of four strengths within the hospital's operating environment and a
description of an improvement to provide best value for money for the hospital. Candidates performed well in the
explanations of the strengths within Bluesberry with many scoring full marks. Where candidates failed to score well
this was due to a failure to explain their strengths. The requirement was to 'identify and explain', where a strength
was identified then ½ mark was available, another 1 mark was available for a clear explanation of each strength. In
addition, a significant minority misread the question requirement and identified weaknesses rather than strengths.
The second part of this question required improvements to the strengths identified. Performance on this question
was adequate. The majority of candidates attempted this part of the question, and were able to identify a few
relevant points. However answers were often too vague or unrealistic.
Candidates' performance was mixed for part (c), with many confusing their assertions. It was common to have
existence tests provided for completeness. In addition too many answers were vague, candidates are still giving
substantive procedures such as 'check the invoices.'
Marking scheme
Marks
(a)
(b)
(c)
Up to 1 mark per valid point
Explanation of value for money audit
Economy – description
Efficiency – description
Effectiveness – description 4
0.5 marks for identification and up to 1 mark for explanation of each well
explained strength and up to 1 mark per improvement. If not well
explained 0.5 marks for each, but overall maximum of 4 points.
Internal audit department
Centralised buying department buys from lowest cost supplier
Authorisation of all purchase orders by purchasing director
Reduction in use of temporary staff
Employee clocking in cards to monitor hours worked
New surgical equipment leading to better recovery rates
Capital expenditure committee 10
Up to 1 mark per substantive procedure
Valuation (i)
Review depreciation policies for reasonableness
Recalculate the depreciation charge
Proof in total calculation of depreciation
For revalued assets, consider reasonableness of valuer
For revalued assets, agree the revalued amounts to valuation report
Surgical equipment additions - vouch the cost to invoice 2
Completeness (ii)
Reconcile PPE schedule to general ledger
Physical inspection of assets
Reconciliation of non-current asset register to the general ledger
Review the repairs and maintenance expense account 2
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