Question 2 - Set up

In this lesson

1. 0:00 Question two overview and section B structure
2. 1:02 Forensic assignment and agreed upon procedures explained
3. 2:56 Client background and ownership structure assessment
4. 6:01 Requirement A1 quality management evaluation approach
5. 10:12 Requirement A2 terms of engagement specifics
6. 11:17 Requirement B procedures to quantify fraud loss
7. 14:57 Planning strategy for tackling all requirements

About this lesson

This question focuses on a forensic assignment—specifically an agreed upon procedure to quantify a payroll fraud loss for an insurance claim—rather than a standard audit completion question. You'll discover why the examiner has included specific details about the client (a non-audit client, wholly owned by a foreign trust, well-respected in the medical sector) and how to use that information strategically when planning your answer. The session breaks down the three requirements you'll need to tackle: evaluating quality management matters before accepting the engagement, explaining specific terms of engagement for an agreed upon procedure, and recommending procedures to quantify the fraud loss. You'll learn how to identify the relevant syllabus areas (ISQM1 and IFRS 4400), understand the mark allocation and command words (evaluate, explain, recommend), and develop a focused approach that links each requirement directly to the scenario rather than giving generic responses. The exhibit reveals the core facts: two former employees who left two years ago are still being paid into an unknown bank account, totalling $30,000, and the client needs the loss quantified within three weeks for their insurance claim and AGM. By the end of this setup, you'll have a clear framework for planning your answer and know exactly where to invest your thinking time to earn the marks available.

Duration: 15m