ACCA Mark AI – See It In Action

✦ This is a real AA exam-style question. The student answer and feedback are exactly what you'd see after submitting.

The question

AA – Audit & Assurance

5 marks

Substantive procedures

Scenario — Quirky Quadbike Co

It is 1 July 20X5. Quirky Quadbike Co manufactures ready mixed concrete which it supplies to a wide range of customers throughout the country. The company's year end is 31 July 20X5. You are an audit supervisor at Aeroball & Co reviewing the systems documentation in preparation for the interim audit. Although payroll and inventory are stand-alone systems, the sales and purchases modules are fully integrated into the computerised accounting system.

The human resources department is responsible for setting up new permanent employees. An authorised joiner form, containing all relevant details including a unique employee number, is sent to the payroll department so that new employees can be added to the payroll. During busy periods, the company recruits temporary employees and joiner forms are not completed — instead, these appointments are processed by the production director who informs the payroll department by email.

(c) Describe substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to Quirky Quadbike Co's payroll expense. (5 marks)

The student's answer

The auditor should obtain the payroll summary for the year and agree the total payroll expense to the figure in the income statement to confirm completeness and accuracy of the recorded expense. A sample of employee records should be selected from the payroll and the employee details, including name, employee number and pay rate, agreed back to the authorised joiner forms held by HR to confirm that employees on the payroll are valid and authorised. For a sample of payroll periods, gross pay should be recalculated by multiplying hours worked by the agreed pay rate and compared to the payroll records to check arithmetical accuracy. For temporary employees, the emails sent by the production director to the payroll department should be reviewed and agreed to the payroll records to confirm that temporary staff added to payroll have been properly authorised. Finally, a sample of payslips should be obtained and the net pay amounts agreed to the bank transfer listings and bank statements to confirm that payroll payments have been made to real employees.

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Overall feedback

An excellent answer that clearly demonstrates understanding of substantive procedures in the context of this specific scenario. Each procedure has a clear source and a clear purpose, with direct reference to Quirky Quadbike Co's circumstances — exactly what an AA examiner is looking for. The point about temporary employees and the email-based authorisation process shows strong scenario awareness and picks up a key risk flagged in the question.

✓

What you did well

Every procedure has a clear source (payroll summary, joiner forms, bank statements) and a clear purpose (confirm completeness, verify authorisation, check accuracy) — this is exactly the structure AA examiners award marks for.

The point about temporary employees specifically addresses the control weakness identified in the Quirky Quadbike Co scenario — using the production director's emails as the basis for testing shows you applied the scenario rather than writing a generic list.

Agreeing net pay to bank statements to confirm payments were made to real employees directly addresses the ghost employee risk — a key payroll audit risk the examiner would expect you to pick up.

The recalculation of gross pay (hours × pay rate) tests arithmetical accuracy — a strong, specific substantive procedure and a common mark point in AA payroll questions.

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What you could improve

🎯 Full marks achieved — no improvements needed for this question.

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Tips for next time

🎯 Full marks achieved — keep using this approach in your next answer.

⚠ This answer scores 3/5 — see the feedback below to understand what was missing and how to improve.

The question

SBL – Strategic Business Leader

5 marks

Ethics

Scenario — DCS Company

DCS Company recently conducted a company-wide staff satisfaction survey. Staff were assured that responses would be anonymous, but the survey required personal information including employee number and department. Following analysis of the results, it emerged that certain employees who gave negative feedback were identified and called in for individual interviews with senior managers. Some of these employees felt intimidated during the meetings. The results were presented to the board using graphs that emphasised positive findings. It later emerged that questions about confidence in senior management had been omitted from the survey, reportedly based on informal feedback obtained through the grapevine.

(b) Criticise the CEO's and HR director's ethical and professional behaviour relating to the design, conduct, and reporting of the staff satisfaction survey. (5 marks)

The student's answer

There are a number of ethical issues with the design and conduct of the staff satisfaction survey at DCS Company. The survey lacks integrity as staff were told their responses would be anonymous, yet the personal information collected means management could identify individual respondents. This is misleading and undermines trust in the process. The survey also lacks objectivity as questions appear to have been designed to discourage negative feedback, particularly about confidence in management, and key questions were omitted entirely. This means the results do not give a true picture of staff opinion. The results were then presented using graph styles that focused on positive aspects, which misrepresents the true findings to the board and is unprofessional. Finally, confidentiality has been breached as employees who gave negative responses were identified and called in for interviews with senior managers, which was never disclosed to staff when they completed the survey.

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Overall feedback

A reasonable attempt that identifies several of the key ethical issues from the DCS Company scenario. The integrity, objectivity and confidentiality breaches are all correctly identified and linked back to the scenario. However, two important points are missing — the double standards issue and the professional behaviour criticism around interviewing and potentially intimidating staff — both of which are clearly signalled in the question and would each earn a mark.

✓

What you did well

Correctly identified the lack of integrity — the promise of anonymity was undermined by the personal information collected, and this was applied specifically to DCS Company rather than stated generically.

The objectivity point is well made — omitting questions about confidence in management and designing questions to discourage negative feedback are both picked up and linked to the scenario.

The misrepresentation of results through selective graph styles is correctly identified as unprofessional and applied to the specific board reporting context in DCS Company.

The confidentiality breach is correctly identified — identifying employees from their responses and calling them in for interview breaches the confidentiality assurance given at the start of the survey.

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What you missed

The double standards point is missing — staff were told the survey was anonymous, but those called in for interview were themselves told to keep the interviews confidential. This contradiction is a separate ethical issue from the confidentiality breach and is worth a mark in its own right.

Professional behaviour is not addressed — calling in identified employees and conducting meetings where some felt intimidated or threatened is itself unprofessional behaviour by the CEO and HR director. The question specifically asks you to criticise their professional behaviour, so this is a clear missed mark.

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Tips for next time

When a question asks you to criticise ethical AND professional behaviour, treat these as separate requirements — ethical issues (integrity, objectivity, confidentiality) and professional behaviour (how they conducted themselves) can each earn marks independently. Don't conflate them into a single point.

Look for contradictions within the scenario — when DCS Company told staff the survey was anonymous but then told interviewees to keep the meetings secret, that contradiction is itself an examinable point. Always ask yourself whether any two facts in the scenario sit uncomfortably next to each other.

Always re-read the question requirement before finishing your answer. This question asked specifically about the CEO and HR director's behaviour — keeping your answer focused on named individuals and specific actions is what earns marks.

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See it in action

Scenario — Quirky Quadbike Co

Scenario — DCS Company

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