Question 1 - Part a (i)

In this lesson

1. 0:00 Setting materiality and planning part A
2. 0:57 Identifying significant risks of material misstatement
3. 3:03 Understanding the client background and context
4. 7:34 Payroll control weaknesses and outsourcing risks
5. 11:48 Joint arrangement and intangible asset recognition
6. 16:02 Historic boat valuation and accounting treatment
7. 19:11 Dockyard damage and impairment assessment
8. 23:01 Analytical review of revenue and profit movements
9. 26:03 Opening balances risk for new audit client

About this lesson

You'll discover the marking strategy that underpins a high-scoring answer—working backwards from available marks to determine how many risks to discuss in depth—and why quality of analysis matters far more than quantity. The video walks you through the complete process of setting materiality using revenue as your benchmark, then systematically extracting audit risks from the scenario exhibits. You'll see how to prioritise risks effectively by identifying which issues have the strongest evidence and greatest potential impact on the financial statements. The tutor demonstrates this using a practical example involving a boat-building company, revealing how to spot control weaknesses, accounting policy uncertainties, and asset valuation concerns that examiners expect you to identify. You'll also learn why certain details matter more than others—such as a small finance team signalling segregation of duties risks, or an outsourced payroll arrangement creating new control dependencies. The session emphasises the importance of relating risks back to the scenario using specific figures and context, and explains how to structure your briefing notes to secure communication marks alongside technical content. By the end, you'll understand how to avoid the common trap of listing many risks superficially, and instead develop fewer risks thoroughly to maximise your marks in this critical section of the Strategic Business Leader exam.

Duration: 27m