EAUD3714: Auditing Past Papers – Comprehensive Exam Notes and Study Guide (UFS BAcc)

EAUD3714 is a core auditing module in the University of the Free State (UFS) BAcc and BAccHons streams, closely aligned with South African Auditing standards and SAICA expectations. This guide uses the structure and trends of auditing past papers—including those from EAUD3714 itself and comparable modules at UNISA (e.g. AUE3702, AUE3761) and CUT (e.g. AUD300, AUD400)—to explain content, exam technique, and marking logic. It focuses on what examiners repeatedly test: risk assessment, internal control evaluation, substantive procedures, reporting, and ethics/independence, and is specifically tailored to South African university auditing syllabi and the IRBA/ISA framework.

1. Exam Landscape for EAUD3714 and Similar South African Auditing Modules

1.1 Where EAUD3714 Fits in the UFS BAcc Path

EAUD3714 is typically a third-year auditing module for BAcc students at the University of the Free State (UFS), sitting after introductory courses such as:

EAUD1614 / EAUD1624 (introductory auditing concepts, assurance, basic internal control)
EAUD2614 / EAUD2624 (intermediate auditing, detailed audit process, assertions)

By the time students reach EAUD3714:

The focus moves from “learning definitions” to applying standards in scenario‑based questions.
Exams start to look very similar to SAICA ITC-style case study questions, though at an undergraduate depth.
Past papers from EAUD3714 often mirror the style of:
- UNISA AUE3702: Auditing – Risk and Internal Control
- UNISA AUE3761: Auditing – Evidence and Reporting
- CUT AUD300: Auditing IIIA and AUD400: Auditing IV

Understanding this ecosystem helps you leverage non-UFS past papers (UNISA and CUT) to reinforce patterns in questioning.

1.2 Typical Exam Structure in EAUD3714 Past Papers

Although formats can change slightly each year, most EAUD3714 past papers follow a consistent pattern:

Question 1 (35–40 marks)
Large case-study on risk assessment and planning, including:
- Identification and explanation of business risks and risk of material misstatement.
- Required audit responses at assertion or overall level.
- Sometimes includes materiality calculation and evaluation.
Question 2 (25–30 marks)
Focus on internal controls, often including:
- Documentation and evaluation of sales/receivables, purchases/payables, inventory, or payroll cycles.
- Control deficiencies, their impact, and recommendations.
- Tests of controls design vs implementation.
Question 3 (20–25 marks)
Usually substantive procedures and audit evidence:
- Design of procedures for particular assertions.
- Use of external confirmations, analytical procedures, and sampling.
Question 4 (15–20 marks)
Often reporting, ethics, and corporate governance:
- Modifications to the auditor’s report (qualified, adverse, disclaimer).
- Independence threats and safeguards (aligned with IRBA Code).
- SA‑specific contexts like the Companies Act, King IV, and public interest entities.

UNISA (e.g. AUE3702, AUE3761) and CUT (e.g. AUD300, AUD400) past papers show similar weighting and style, so they are excellent supplementary practice, especially when specific EAUD3714 past papers are limited.

1.3 Mark Allocation and Time Management

A recurring theme in UFS, UNISA, and CUT auditing exams:

1,5 minutes per mark is a safe rule of thumb.
- 20-mark sub-question → ±30 minutes
- 40-mark question → ±60 minutes
Past papers often warn indirectly: students fail not for lack of knowledge, but poor time allocation.

Exam markers generally follow a mark-per-point approach:

1 mark: Clear, correct, relevant point.
0,5 mark: Partially correct or vague point.
No mark: Generic theory not linked to the scenario.

Implication: you must write points, not essays. In EAUD3714, markers prefer:

Bullet points/short paragraphs.
Each point structured as: Issue → Explanation → Impact / Reference.

1.4 Core Themes Across South African Auditing Past Papers

Analysing multiple years of:

UFS EAUD3714 sample past papers and tutorial tests,
UNISA AUE3702, AUE3761 and AUE4861 past exams,
CUT AUD300/AUD400 assessment exemplars,

reveals recurring clusters:

Risk assessment & planning
- ISA 315 & ISA 330 application.
- Business and fraud risk identification.
- Linking risks to assertions and procedures.
Internal control systems
- Control environment and control activities.
- Deficiencies and recommendations.
- Reliance vs non-reliance approach.
Substantive procedures and evidence
- Tests of details vs analytical procedures.
- Inventory, revenue, receivables, PPE, cash, provisions.
Audit reporting
- Types of modification (qualified, adverse, disclaimer).
- Emphasis of Matter vs Other Matter paragraphs.
- Going concern and subsequent events.
Ethics and independence
- IRBA Code of Professional Conduct.
- Threats and safeguards.
- Engagement acceptance and continuance.
Regulatory and South African context
- Companies Act 71 of 2008.
- King IV and public interest score.
- IRBA oversight and reportable irregularities.

EAUD3714 sits right in the middle of this matrix. The rest of this guide unpacks each of these clusters through the lens of past exam questions and expected answering techniques.

2. Mastering Risk Assessment and Planning in EAUD3714 Past Papers

2.1 Typical Risk Assessment Question Format

Risk questions in EAUD3714 (and similar UNISA modules like AUE3702) often look like:

You are the senior on the audit of LekkerTech (Pty) Ltd, a technology reseller. The draft financial statements show revenue of R60 million and profit before tax of R4,5 million. The following information is extracted from a meeting with management.

Required:
(a) Identify and explain the business risks facing LekkerTech. (8 marks)
(b) For each business risk, identify the related risk of material misstatement at financial statement/ assertion level. (10 marks)
(c) Describe the audit responses to address these risks. (12 marks)

This structure is consistent in both UFS and UNISA past papers:

First: Understand and explain the business context.
Second: Translate business issues into audit risks.
Third: Propose audit responses grounded in ISA 330.

2.2 Business Risks vs Risk of Material Misstatement

Business risk: A risk that an entity’s objectives will not be achieved, affecting its operations, reporting, or compliance. Not all business risks translate directly into material misstatements, but many create conditions for misstatement.

Risk of material misstatement (RMM): A risk that the financial statements are materially misstated prior to audit (inherent risk × control risk).

Past papers test:

Ability to distinguish these concepts.
Ability to articulate the link between them.

Example (drawn from typical EAUD3714 scenarios):

Business risk: LekkerTech relies heavily on one large customer that contributes 40% of revenue. This customer is experiencing financial difficulty.
RMM: There is a risk of overstated revenue and trade receivables (valuation assertion) if LekkerTech fails to recognise an allowance for credit losses for this major debtor.

Recommended answer structure (high-scoring pattern in UFS scripts):

State the business risk
- “Reliance on a single customer (40% of revenue) that is in financial difficulty.”
Explain the business consequence
- “If the customer fails, LekkerTech may suffer significant cash flow shortages and losses.”
State the RMM
- “Trade receivables and revenue may be overstated if bad debts and credit loss allowances are not recognised.”

2.3 Assertions and Risk Linking

EAUD3714 past questions frequently require assertion-level linkage. Typical financial statement assertions:

Classes of transactions: occurrence, completeness, accuracy, cut-off, classification.
Account balances: existence, rights & obligations, completeness, valuation & allocation.
Presentation and disclosure: occurrence, completeness, accuracy, valuation, classification, understandability.

Consider a typical past-paper inventory risk:

The client carries inventory of R25 million, including high-value electronic components. The inventory is held in multiple warehouses across South Africa and is subject to rapid technological obsolescence.

Risk analysis:

Inherent risk: High value, geographically dispersed, subject to obsolescence.
Relevant assertions:
- Existence: Risk of recording inventory that is stolen or lost.
- Valuation: Risk of obsolete stock still carried at cost instead of NRV.
- Completeness: Usually less of a concern in this type of inventory unless consignment stock or third-party warehouses are involved.

For EAUD3714 answers:

Explicitly name the assertion.
Show why that assertion is at risk.
Suggest an audit response that directly addresses the assertion (see 2.6 below).

2.4 Materiality Calculations in Planning Questions

Planning questions often combine risk with materiality (especially in UFS EAUD3714 and UNISA AUE3702).

Typical requirement:

Calculate planning materiality for LekkerTech (Pty) Ltd and briefly explain your basis.

Common benchmarks in South African exams (not strict rules, but exam patterns):

Profit before tax: 5–10%
Revenue: 0,5–1%
Total assets: 1–2%

Example:

Revenue: R60 million
Profit before tax: R4,5 million
Total assets: R30 million

You might choose 7% of profit before tax:
Planning materiality = 7% × R4,5 million = R315 000

Commentary expected in EAUD3714:

“Profit before tax is a common benchmark for profit-oriented entities.”
“7% is within the acceptable range (5–10%) given stable profitability.”

Past papers sometimes ask for performance materiality:

Often set at 50–75% of planning materiality.
Example: Performance materiality = 70% × R315 000 = R220 500.

Marks awarded for:

Correct calculation.
Justification of benchmark and percentage.
Brief explanation of how this informs audit strategy (e.g. sample sizes, focus on higher-risk balances).

2.5 Fraud Risk and ISA 240

EAUD3714 exams often include at least one explicit fraud risk element, aligned with ISA 240. Typical red flags used in past papers:

Significant management bonus tied to profit.
Pressure from lenders to meet covenants.
Unusual journal entries at period end.
Complex related-party transactions.

Expected exam approach:

Identify fraud risk factor (incentive/pressure, opportunity, rationalisation).
Link to risk of material misstatement due to fraud.
Explain audit response, including:
- Expanded journal entry testing.
- Unpredictable audit procedures.
- Increased level of professional scepticism.
- More extensive inquiries of those charged with governance.

Example answer snippet:

“Management’s bonuses are based on reported profit. This creates an incentive to overstate revenue or understate expenses, representing a risk of material misstatement due to fraud at the financial statement level. The auditor should increase the extent of substantive testing on revenue recognition, perform detailed cut-off testing, and perform journal entry testing around year end.”

2.6 Designing Audit Responses in Planning Questions

ISA 330-based audit response questions are a major mark area. UFS markers typically expect specific, assertion-linked procedures, not generic statements like “increase sample size”.

To respond appropriately:

State the overall strategy (reliance vs substantive approach) if asked.
Design specific procedures to address each identified risk.

Example (drawn from typical EAUD3714 style):

Risk:

Revenue was recognised on goods despatched at year-end without proof of delivery. Contract terms state that control passes on delivery, not dispatch.

Procedures:

Inspect a sample of dispatch notes around year-end and trace to proof of delivery and invoices to ensure revenue is recognised when control passes (occurrence and cut-off).
For goods dispatched before year-end but delivered after year-end, confirm whether they are recorded as inventory in transit or deferred revenue, in line with contract terms (cut-off and classification).
Perform analytical procedures on monthly revenue patterns to identify unusual spikes at year-end requiring further investigation.

Marks are given for:

Linkage to the described risk.
Relevance and specificity to the scenario.
Correct assertion focus.

2.7 Planning Documentation and Engagement Acceptance

Past papers often combine planning with engagement acceptance/continuance and ethical considerations, focusing on:

Client integrity.
Competence and capacity of the firm.
Independence (fee dependence, family relationships, etc.).
Predecessor auditor communication.

Example past-paper style requirement:

Based on the information provided, discuss whether your firm should accept the appointment as auditor of SupaBuild Ltd.

High-scoring structure:

Discuss client integrity:
- History of late tax filings, regulatory non-compliance, frequent auditor changes, questionable business practices.
Independence threats:
- Existing consulting relationships.
- Close family relationships with directors.
- Outstanding fees from prior work.
Competence and resources:
- Does the firm have sufficient staff with industry expertise?
Professional clearance:
- Need to communicate with predecessor auditor and review any reasons for change.

Link to relevant ethics principles (integrity, objectivity, professional competence and due care) and the IRBA Code. Conclude clearly: accept or decline, with justification.

3. Internal Control and Systems Questions: What EAUD3714 Past Papers Reveal

3.1 The Central Role of Internal Control in SA Auditing Exams

Internal control questions are heavily tested in:

UFS EAUD3714 (usually Question 2 or part of Question 1).
UNISA AUE3702 and AUE4861.
CUT AUD300/AUD400.

They often relate to key transaction cycles:

Revenue and receivables.
Purchases and payables.
Inventory.
Payroll.
Cash and bank.

And frequently test:

Understanding of the components of internal control (ISA 315).
Evaluation of design and implementation.
Identification of deficiencies.
Design of compensating controls and tests of controls.

3.2 Components of Internal Control (ISA 315) – Exam-Oriented View

ISA 315 identifies five interrelated components, which examiners at UFS and UNISA repeatedly reference:

Control environment
- Tone at the top, governance, HR practices.
Entity’s risk assessment process
- How management identifies and responds to business risks.
Information system and business processes relevant to financial reporting.
Control activities
- Authorisation, segregation of duties, reconciliations, physical controls.
Monitoring of controls
- Internal audit, review of management accounts, corrective actions.

In EAUD3714, internal control case studies usually focus on control activities, but high performers also reference:

Weak control environment as a root cause.
Weak monitoring when controls are not reviewed.

For example, if an entity allows the same person to record sales, approve credit notes, and reconcile the debtors ledger, you can:

Identify the immediate segregation of duties issue (control activity).
Link to a weak culture of control environment and lack of oversight.

3.3 Typical Internal Control Case Study Structure

Common exam pattern (in UFS and UNISA):

The following is a description of the revenue and receivables system of Rainbow Retail (Pty) Ltd.
Required:
(a) Identify the strengths and weaknesses in the system. (14 marks)
(b) For each weakness, explain the possible error or fraud that may occur. (10 marks)
(c) Recommend an improvement or control, and indicate a suitable test of control. (12 marks)

This type of question rewards:

Systematic reading and annotation.
Organised presentation in tabular form.
Precise linking of weakness → risk → recommendation → test.

3.4 Common Control Weaknesses and How to Answer Them

Below is a condensed “cheat sheet” of frequent weaknesses and expected answers, aligned with EAUD3714 marking trends.

Weakness (example)	Possible error/fraud	Recommendation	Test of control (example)
One person captures sales orders, approves credit limits, and records receipts in the cashbook.	Fictitious sales or receipts misappropriated; misposted receipts; unauthorised credit.	Segregate duties: different individuals should authorise credit, capture sales, and record receipts.	Inspect a sample of sales and receipts for evidence of separate authorisation and independent review.
No review of monthly debtors reconciliation to general ledger.	Errors in debtors balances may go undetected; misstatements in receivables and revenue.	Prepare and review monthly debtors reconciliations with follow-up of differences.	Inspect reconciliations for signatures and evidence of follow-up; reperform reconciliation for one month.
Pre-numbered invoices not used, or sequence not checked.	Unrecorded or duplicate sales; misappropriation of cash.	Implement pre-numbering and periodic sequence checks.	Inspect invoice registers and review evidence of sequence checks performed.
Stock counts not observed or supervised; count sheets not controlled.	Theft or errors in inventory records; misstated inventory quantities.	Formal stock count instructions; supervised counts; controlled issue and return of count sheets.	Observe stock counts; inspect completed count sheets for supervisory sign-off.
Suppliers’ statements are not obtained or reconciled.	Unrecorded liabilities; overstatement of profit.	Obtain monthly supplier statements and reconcile to creditors ledger.	Inspect reconciliations; reperform reconciliation for selected suppliers.

EAUD3714 examiners award marks for:

Specific identification of what is wrong.
Clear link to financial statement risk (e.g. receivables overstated).
Practical and realistic recommendations.

3.5 Reliance vs Non-Reliance Approach in EAUD3714

Questions often require you to decide if the auditor can rely on internal controls. Factors influencing this decision:

Design effectiveness: Are the controls designed to prevent/detect errors?
Implementation: Are the controls actually in operation?
Control environment: Does management support compliance?

EAUD3714 scenario example:

The client has sophisticated IT systems with automated controls, but there is evidence that management frequently overrides controls and instructs staff to bypass procedures to “save time”.

Conclusion:

Even if controls are well-designed, management override reduces their reliability.
The auditor is likely to place limited reliance on controls and adopt a substantive approach, particularly for revenue and related accounts.

Answer approach:

Describe the weakness (management override).
Explain its impact (increases control risk, reduces reliance).
Conclude that the auditor should:
- Limit tests of controls.
- Increase substantive procedures (detailed tests and analytics).
- Extend journal entry testing and enquiry of personnel.

3.6 IT Controls and Automated Systems – Exam Trends

South African auditing exams increasingly include IT environment and automated controls:

General IT controls: access security, change management, backup and recovery.
Application controls: input, processing, and output controls.

Typical EAUD3714-type question:

The entity’s sales system automatically checks credit limits and calculates discounts. However, user IDs and passwords are shared among sales staff, and there are no logs of override activities.

Issues to highlight:

Sharing of user IDs:
- Weak access control.
- Lack of accountability.
No logs:
- Inability to trace unauthorised overrides.
Impact:
- Increased risk of unauthorised sales or discounts.
- Possible misstated revenue and gross profit.

Recommendations:

Enforce unique user IDs and strong passwords.
Implement access rights aligned with job roles.
Enable and regularly review override logs.
Monitor exception reports.

Marking in EAUD3714 rewards explicit recognition that:

Automated controls can be powerful, but only if general IT controls are strong.
Weak general controls undermine trust in automated controls.

3.7 Payroll and Cash Cycle Controls

EAUD3714 and similar CUT/UNISA modules regularly test payroll and cash because of their fraud risk.

Common payroll control points:

Appointment and termination documentation authorised by HR.
Independent verification of hours worked (time records).
Segregation between payroll preparation, authorisation, and payment.
Regular review of payroll masterfile changes.
Reconciliation of payroll to general ledger and bank statements.

Common weaknesses:

Personnel clerk both prepares payroll and can change masterfile data.
Lack of periodic review of payroll list for ghost employees.
Wages paid in cash with inadequate controls.

Cash controls:

Bank reconciliations prepared monthly by a person independent from cash handling.
Daily banking of cash receipts.
Use of pre-numbered receipts and deposit slips.
Separation of cash handling, recording, and reconciliation roles.

In exam answers:

Show understanding of fraud opportunities:
- Ghost employees.
- Skimming of cash receipts.
Link to financial statement assertions (existence, completeness, accuracy).
Provide concrete controls and appropriate tests of controls.

4. Substantive Procedures, Audit Evidence and Reporting: Patterns from Past Papers

4.1 Designing Substantive Procedures – The Heart of EAUD3714

Substantive procedure questions are central in EAUD3714, UNISA AUE3761, and CUT AUD400. They usually take one of these forms:

“Describe substantive procedures you would perform to obtain sufficient appropriate audit evidence regarding [account / assertion].”
“For each of the following assertions relating to [revenue, inventory, PPE, etc.], list substantive procedures to test the assertion.”

Common topics:

Inventory (existence and valuation).
Revenue and receivables (occurrence, cut-off, valuation).
Property, plant and equipment (existence, valuation, rights, depreciation).
Provisions and contingent liabilities.
Cash and bank.

4.2 Principles for High-Scoring Substantive Procedure Answers

Markers in EAUD3714 give full marks when procedures are:

Specific (who/what/how/why).
Linked to a particular assertion.
Feasible and relevant to the scenario.

General template for phrasing:

“Inspect [document] and [perform action] to confirm [assertion] for [item].”

Example:

Poor: “Check that inventory exists.”
Good: “Attend the year-end inventory count and perform test counts of selected items from the inventory listing to the physical stock (and vice versa) to verify the existence and completeness of inventory.”

4.3 Commonly Examined Areas and Model Procedures

4.3.1 Inventory

Assertions often tested: existence, valuation, completeness.

Example EAUD3714 requirement:

Describe substantive procedures to obtain sufficient appropriate audit evidence regarding the existence and valuation of inventory at year-end.

Possible answer points:

Existence:
- Attend the year-end inventory count and perform:
  - Floor-to-list test: Select items from the warehouse floor and trace to the final inventory count sheets and inventory records.
  - List-to-floor test: Select items from the inventory listing and verify their physical presence in the warehouse.
Valuation:
- For a sample of inventory items, agree cost to supplier invoices or production cost records.
- Compare cost to net realisable value (NRV) by inspecting subsequent sales invoices and selling prices after year-end.
- Discuss with management and inspect evidence supporting any provisions for obsolete or slow-moving stock, including inventory ageing analyses.
- Perform analytical procedures comparing gross profit margins by product line to prior year, investigating significant deviations for possible valuation issues.

Each bullet is potentially a separate mark in UFS marking schemes.

4.3.2 Revenue and Receivables

Assertions: occurrence, accuracy, cut-off, valuation, existence.

Example requirement:

Describe substantive procedures to test the occurrence of revenue and the existence of trade receivables.

Occurrence of revenue:
- Select a sample of sales transactions from the sales journal and trace to:
  - Customer orders.
  - Delivery notes or proof of delivery.
  - Invoices.
- Check that the goods or services were actually provided, and that the customer accepted them.
Existence of receivables:
- Send positive external confirmations to a sample of trade debtors, requesting them to confirm the balance owed at year-end.
- For non-respondents, perform alternative procedures:
  - Inspect subsequent receipts after year-end.
  - Review correspondence with customers.

Valuation of receivables:

Review the age analysis of debtors and compare to prior periods.
Inquire about significant overdue balances and assess the adequacy of the allowance for credit losses.
Test subsequent receipts to determine whether long-outstanding debts have been collected.

EAUD3714 examiners expect you to:

Emphasise external confirmations as high-quality evidence.
Link ageing and subsequent receipts to valuation.

4.3.3 Property, Plant and Equipment (PPE)

Assertions: existence, rights & obligations, valuation, completeness.

Typical exam sub-question:

Describe substantive procedures to test the existence and valuation of PPE additions during the year.

Suggested procedures:

Existence:
- Select a sample of additions from the PPE register and physically inspect the assets on site.
- Inspect asset tags and compare with register details (asset number, location, description).
Valuation:
- For selected additions, inspect supplier invoices and payment documentation to confirm cost.
- Verify that directly attributable costs (installation, delivery) are included and that revenue expenditure is not capitalised.
- Recalculate depreciation for a sample of assets, ensuring correct useful lives, residual values, and methods are applied in line with accounting policies.
- For any revalued assets, inspect independent valuation reports and assess the valuers’ competence and independence.

4.3.4 Provisions and Contingent Liabilities

Assertions: completeness, valuation, presentation and disclosure.

Common exam angle:

Explain substantive procedures to obtain evidence regarding the completeness of provisions and contingent liabilities.

Answer points:

Inquire of management and those charged with governance about:
- Ongoing legal disputes.
- Environmental obligations.
- Warranty obligations.
Inspect legal correspondence and obtain direct confirmation from the entity’s external legal counsel about the existence, status, and likely outcome of legal cases.
Review board minutes and audit committee minutes for discussion of potential liabilities.
Examine after-year-end events (post balance sheet events), such as settlements of disputes, which might indicate an obligation existing at year-end.
Review contracts, loan agreements, and other documents for clauses that may generate obligations (e.g. guarantees).

4.4 Audit Evidence Quality and ISA 500

EAUD3714 often includes conceptual questions about sufficient appropriate audit evidence:

Sufficiency: Quantity of evidence.
Appropriateness: Quality (reliability + relevance).

Key principles examiners want:

External evidence from independent sources is more reliable than internal evidence.
Evidence obtained directly by the auditor is more reliable than that obtained indirectly.
Documentary evidence is usually more reliable than oral representations.
Original documents are more reliable than photocopies.

Application example:

Management verbally states that all inventory is readily saleable and no obsolescence provision is needed.

This is low-quality evidence (management representation).
Auditor should obtain higher-quality evidence:
- Inspect subsequent sales.
- Review ageing analyses.
- Inspect warehouse conditions.

4.5 Analytical Procedures – Planning, Substantive and Final Review

Analytical procedures appear in:

Planning stage (ISA 315).
Substantive stage (ISA 520).
Final review stage.

Exam patterns in EAUD3714 and UNISA AUE3761:

Explain the purposes at each stage.
Design specific analytical procedures for given scenarios.

Example (inventory and gross profit):

Gross profit percentage has declined from 30% to 22% while revenue increased by 10%. Discuss possible reasons and additional procedures.

Possible explanations:

Increased cost of sales due to higher supplier prices.
Pricing pressure and discounts to customers.
Inventory write-downs or errors in inventory valuation.
Fraud (e.g. theft not properly recorded).

Additional procedures would include:

Comparing unit margins by product line.
Reviewing discount policies.
Testing inventory valuation (cost vs NRV).
Investigating any errors in recording purchases or inventory.

4.6 Reporting: Types of Audit Opinions in South African Exams

EAUD3714 past papers frequently include a reporting question, often referencing ISA 700, ISA 705, ISA 706, and ISA 570 (going concern).

Key opinion types:

Unmodified (clean) opinion.
Qualified opinion (material but not pervasive).
Adverse opinion (material and pervasive misstatement).
Disclaimer of opinion (inability to obtain sufficient appropriate evidence – pervasive).

Plus additional paragraphs:

Emphasis of Matter (EOM): Refers to a matter appropriately presented/disclosed in the financial statements, fundamental to users’ understanding.
Other Matter paragraph: Refers to matters not presented or disclosed in the financial statements but relevant to users’ understanding of the audit, auditor’s responsibilities, or the report.

Typical EAUD3714 requirement:

Indicate the type of audit opinion that would be appropriate in each of the following unrelated situations and justify your answer.

Scenarios examiners like:

Inventory representing 35% of total assets is located at a third-party warehouse; the auditor was unable to attend the physical count and could not obtain sufficient alternative evidence.
- Likely: Qualified opinion or disclaimer, depending on pervasiveness.
Material misclassification of a major loan as equity, which management refuses to correct.
- Likely: Qualified opinion (if limited) or adverse (if pervasive).
Going concern uncertainty adequately disclosed, but significant.
- Likely: Unmodified opinion with an Emphasis of Matter relating to going concern.

Markers look for:

Correct identification of modification type.
Explanation using terms “material”, “pervasive”, and “sufficient appropriate evidence”.
Reference to disagreement vs limitation of scope.

4.7 Going Concern, Subsequent Events and Their Reporting Impact

Going concern (ISA 570) and subsequent events (ISA 560) are regular exam visitors:

Identify indicators that cast significant doubt on going concern:
- Financial losses, negative cash flows, net current liability position.
- Default on loans or inability to pay creditors.
Distinguish between:
- Material uncertainty related to going concern – requires disclosure; unmodified opinion with EOM.
- Inadequate disclosure – may lead to a qualified or adverse opinion.
Subsequent events:
- Adjusting events: Provide evidence of conditions existing at year-end; require adjustment.
- Non-adjusting events: Occur after year-end; require disclosure if material.

EAUD3714 reporting questions often involve:

A post‑year‑end fire destroying inventory (non-adjusting, but disclosure if material, plus potential going concern effect).
Discovery after year-end of a major fraud that occurred before year-end (adjusting).

Students must comment on financial statement adjustment/disclosure and effect on the audit report.

5. Ethics, Independence, and Exam Strategy Using Auditing Past Papers (EAUD3714, UNISA, CUT)

5.1 Ethics and Independence in the South African Context

EAUD3714 aligns with the IRBA Code of Professional Conduct, similar to content in:

UNISA AUE2601 / AUE3702 / AUE4861.
CUT AUD200 / AUD300.

Ethics questions in past papers generally test:

Fundamental principles:
- Integrity.
- Objectivity.
- Professional competence and due care.
- Confidentiality.
- Professional behaviour.
Independence in mind and appearance.
Threat categories:
- Self-interest.
- Self-review.
- Advocacy.
- Familiarity.
- Intimidation.
Safeguards:
- At the level of the profession/legislation.
- At the firm level.
- At the engagement level.

Typical exam requirement:

Identify the independence threats in each of the following situations, indicate which fundamental principle is affected, and suggest appropriate safeguards.

5.2 Common Threat Scenarios in EAUD3714 and Related Past Papers

Some classic scenarios used in UFS/UNISA/CUT exams:

Fee dependence
- The audit firm derives 20% of its total income from one client.
- Threat: Self-interest; may impair objectivity.
- Safeguards:
  - Independent quality control review.
  - Rotate senior partners.
  - Consider reducing non-assurance services to the client.
Provision of non-assurance services
- Firm provides tax planning and internal audit outsourcing to the audit client.
- Threat: Self-review (auditor might audit their own work); advocacy.
- Safeguards:
  - Separate teams for assurance and non-assurance services.
  - Independent review of tax work by another firm (if high risk).
  - In some cases, decline certain services for public interest entities.
Family and personal relationships
- Audit manager’s spouse is the financial director of the client.
- Threat: Familiarity and self-interest.
- Safeguards:
  - Remove the manager from the engagement team.
  - Review whether the firm can remain auditor; consider resignation if relationship is too close.
Gifts and hospitality
- Client offers sports event tickets and overseas trips.
- Threat: Self-interest and familiarity.
- Safeguards:
  - Decline gifts not of trivial or inconsequential value.
  - Firm policies on acceptable gifts and hospitality.

Past papers often expect the answer structure:

Identify threat type.
Link to fundamental principle.
Suggest specific safeguard.
Conclude whether engagement can continue.

5.3 South African Regulatory Anchors: IRBA, Companies Act, King IV

Examination questions for EAUD3714 sometimes push beyond textbook IRBA Code into local regulation:

Independent Regulatory Board for Auditors (IRBA):
- Regulates auditors in South Africa.
- Issues South African Auditing Practice Statements.
- Investigates reportable irregularities.
Companies Act 71 of 2008:
- Requirements for the appointment, rotation, and removal of auditors.
- Public interest score and audit vs review requirements.
King IV Report on Corporate Governance:
- Principles of good governance.
- Role of the audit committee:
  - Appointment and oversight of external auditor.
  - Monitoring independence.
  - Recommending audit fees and scope.

Past paper example:

Explain the role of the audit committee in safeguarding auditor independence, with reference to King IV and the Companies Act.

Expected points:

Recommends appointment and removal of external auditor to shareholders.
Evaluates the auditor’s independence and non-audit services.
Approves the nature and extent of non-assurance services.
Reviews audit fees to ensure they are fair and not creating undue pressure.

5.4 How to Use Past Papers from EAUD3714, UNISA, and CUT Effectively

Given limited access to some university-specific past papers, students in the UFS BAcc EAUD3714 module can leverage cross-university materials:

UNISA:
- AUE3702 (risk & internal control) → excellent for risk and control questions.
- AUE3761 (evidence & reporting) → strong for substantive procedures and opinion questions.
- AUE4861 (advanced auditing) → deeper, but conceptually aligned; use selectively for EAUD3714 consolidation.
CUT:
- AUD300 / AUD400 past papers → practical, scenario-oriented questions similar to EAUD3714, often slightly more concise.

Study approach:

Group past papers by topic, not by year or institution:
- Risk/planning.
- Internal control.
- Substantive procedures.
- Reporting.
- Ethics/governance.
For each topic:
- Compile 5–10 typical exam scenarios.
- Practise writing outline answers under time pressure.
- Compare to suggested solutions where available (UNISA releases some solutions).
Focus on keyword patterns used in requirements:
- “Identify and explain”.
- “Describe substantive procedures”.
- “Discuss the auditor’s responsibility”.
- “Indicate the type of opinion and justify your answer”.

These phrases hint at marking expectations (explain vs list vs discuss vs justify).

5.5 Exam Technique: Answer Structure, Presentation and Time

From UFS EAUD3714 and comparable UNISA scripts, common issues among failing candidates include:

Writing too much generic theory without applying it to the scenario.
Not labelling assertions clearly.
Answering in continuous prose instead of structured points.
Poor time management leading to incomplete questions.

A high-performing approach:

Read the requirement first, then scan the scenario; highlight facts linked to the requirement.
Plan quickly:
- Rough outline in the margin (e.g. 5–6 headings for a 20-mark answer).
Use clear headings and subheadings:
- “Business risk”, “RMM”, “Audit response”.
Use bullet points for individual marks:
- Each bullet = one potential mark.
When asked to “explain”, follow the “Point – Why – Impact” structure:
- Point: identify risk/weakness/procedure.
- Why: explain how it works / why it is relevant.
- Impact: on financial statements or audit.

5.6 Common Pitfalls and How to Avoid Them

Confusing business risk with audit risk
- Business risk: affects entity’s operations.
- Audit risk: risk of incorrect opinion due to misstatements.
- Solution: Always phrase business risk from entity’s perspective, then translate to financial statement assertion.
Listing procedures without purpose
- Markers reward linking procedures to assertions and risks.
- Solution: Always add “to verify [assertion]” in your mind, even if you don’t write every time.
Over-general answers
- “Check documents” or “verify balances” gets minimal marks.
- Solution: Specify documents, specify actions, specify what you’re checking.
Ignoring mark allocation
- A 10-mark question needs about 10–12 solid points.
- Solution: Count your bullets; if you have 4 bullets for 10 marks, you’re undershooting.
Misunderstanding modifications to the audit opinion
- Students mix “qualified opinion” and “disclaimer”.
- Solution: Remember:
  - Disagreement with management → qualified or adverse.
  - Inability to obtain evidence → qualified or disclaimer.
  - Material but not pervasive → qualified.
  - Material and pervasive → adverse/disclaimer.

5.7 Consolidated Checklist for EAUD3714 Exam Preparation

To convert past paper practice into success in EAUD3714 and related courses:

Content mastery (conceptual):
- Understand ISA 200 series, ISA 300–330, ISA 500–520, ISA 560–570, ISA 700–706, and the IRBA Code at a summarised level.
- Internal control components and assertions must be second nature.
Application practice:
- Work through at least 5–7 full past papers from:
  - EAUD3714 (UFS).
  - AUE3702/AUE3761 (UNISA).
  - AUD300/AUD400 (CUT).
- Time yourself and mark critically.
Technique refinement:
- Practise writing in structured bullet format.
- Develop standard templates (e.g. for risk questions, control evaluation, substantive procedures).
South African context:
- Integrate knowledge of Companies Act, King IV, and IRBA requirements into answers where relevant.
Exam-day strategy:
- Scan the paper, decide the order of questions.
- Stick rigidly to 1,5 minutes per mark.
- If stuck on a sub-question, move on and return if time allows.

This study guide synthesises patterns from EAUD3714 at the University of the Free State (UFS) and aligns them with auditing modules at UNISA and CUT, providing a context-rich, exam-targeted resource. Used together with actual past papers and official solutions where available, it can form the backbone of a structured, effective preparation plan for auditing exams in the South African BAcc context.