Question 1 - Set up

In this lesson

1. 0:00 Planning stage audit overview
2. 4:03 Understanding materiality calculation
3. 6:05 Structuring briefing notes format
4. 7:01 Identifying business risks vs misstatement risks
5. 10:02 Reading exhibits efficiently for both parts
6. 15:10 Designing audit procedures for specific risks
7. 17:15 Auditor responsibilities for compliance
8. 18:14 Analysing key exhibits and financial data
9. 27:47 Time management and allocation strategy
10. 34:19 Common examiner feedback and exam technique

About this lesson

You'll learn how to structure your response as briefing notes, understand what the examiner is really asking for across all four requirements, and master the critical distinction between business risks and audit risks of material misstatement. This is essential foundation work: getting the format and approach right here will transform how you tackle every planning question you'll face. The lesson breaks down each part of the question in detail. Part A asks you to evaluate significant business risks facing the company—these are threats to the business itself, nothing to do with financial statement errors. Part B, worth 16 marks, requires you to assess and prioritise risks of material misstatement; you'll learn why calculating materiality first is non-negotiable, and how to use financial analysis and accounting knowledge to identify specific areas where figures might be misstated. Part C focuses on designing audit procedures for a specific risk (in this case, investment classification), while Part D covers the auditor's responsibilities regarding compliance with laws and regulations. You'll also discover how to earn the 10 professional marks available through demonstrating judgement, commercial acumen, and scepticism in every point you make. Critically, you'll gain insight into exam technique and time management. The lesson emphasises reading and planning simultaneously as you work through the exhibits—a strategy that saves time and helps you spot both business and audit risks in one pass. You'll learn how to allocate your 90 minutes across the four requirements using the mark allocation as your guide, and why stopping at your time limit for each part (rather than overrunning) is essential to completing the full question. The lesson also highlights common examiner criticisms: students mixing up business risks with audit risks, failing to explain the impact of identified risks, not identifying which specific figures are at risk, and writing generic audit procedures instead of tailoring them to the client's circumstances.

Duration: 36m