Question 1 - Set up

In this lesson

1. 0:00 Question one overview and exam structure
2. 0:40 New client context and industry analysis
3. 2:01 Understanding mark allocation and professional marks
4. 4:27 Setting materiality using revenue basis
5. 8:15 Identifying and prioritising significant risks
6. 10:04 Inventory risk analysis and audit procedures
7. 13:21 Ethical and professional issues evaluation
8. 18:26 Communication and professional marks breakdown
9. 22:10 Time management and exam technique
10. 26:00 Accounting standards as foundation knowledge

About this lesson

You'll discover how to extract critical information from the scenario, understand what the examiner is really testing, and develop a strategic approach to planning your answer. The session covers the essential foundations for tackling this question effectively. You'll learn how materiality is set and justified using revenue figures, how to identify and prioritise significant risks of material misstatement, and why scenario-specific information matters far more than rote-learned audit procedures. The video walks you through each part of the question structure: evaluating risks using the right exhibits, designing audit procedures that directly address the risks you've identified, and handling the ethical and professional issues section with appropriate depth and explanation. A key theme throughout is that this question tests your professional judgement and commercial acumen, not just technical knowledge. You'll understand how the 40 technical marks and 10 professional marks are earned together—through well-reasoned answers that demonstrate analysis, evaluation, professional scepticism, and clear communication. The session also emphasises the critical importance of your accounting standards knowledge from SBR and FR, since the vast majority of audit risks relate directly to specific accounting requirements. Finally, you'll get practical guidance on time management for the 50-mark question, how to plan your answer efficiently, and why following the examiner's instructions precisely—including which exhibits to use for each part—directly affects both technical and professional marks.

Duration: 27m