Nov 2025 Q1 Debrief: Score Full Marks! | FinEdge Technologies Plc ICAN AAAF | Chapter 2

Описание: Welcome to this ICAN AAAF Past Papers Debrief Session where we break down November 2025 Diet – FinEdge Technologies Plc (Question 1a & 1b) under Chapter 2: The Regulatory Environment.

This session is designed to help candidates understand not just the right answers, but how ICAN expects you to present your answers in the exam to earn maximum marks.

🎯 What This Debrief Covers
Case Scenario: FinEdge Technologies Plc

FinEdge is a fast-growing Nigerian fintech company providing:

Digital payments processing (millions of transactions daily)

AI-driven fraud detection services

Automated systems for revenue recognition, credit scoring, and risk monitoring

The audit engagement raised key professional and ethical issues including:

Audit partner rotation and audit firm rotation

Familiarity threat from long association

Fee dependence and independence concerns

Management pressure to reduce audit testing on AI systems

Weak whistleblowing protection and escalation to ICAN

Second opinion request during an ongoing audit

Identification of Key Audit Matters (KAMs) such as AI reliance, valuation of tech assets, and automated controls

🧠 Question Focus (Nov 2025 – Q1a & Q1b)
✅ Q1(a): Audit firm and partner rotation requirements (9 marks)

In this video, we explain:

Why auditor rotation exists (to strengthen independence, objectivity, audit quality & transparency)

The danger of long association and the familiarity threat

Difference between:

Audit Partner Rotation

Audit Firm Rotation

Nigeria’s regulatory guidance (FRCN Code of Corporate Governance 2018 / Audit Regulations 2020):

Audit firm maximum tenure of 10 years

Reappointment only after 7 years cooling-off period

Joint audit maximum tenure 15 years

Engagement partner maximum 5 years before rotation

We also discuss the pros and practical challenges of rotation, including onboarding complexity, business understanding delays, and transition stress.

✅ Q1(b): Fee dependence and how it undermines independence (4 marks)

We examine why disclosure alone is NOT enough, including:

How high client fees create self-interest and intimidation threats

IESBA Code guidance:

For PIEs, recurring fees exceeding 15% for 2 consecutive years triggers:

Disclosure to TCWG

Independent review (external professional/regulatory review)

Difference between:

Pre-issuance review vs Post-issuance review

ICAN ethical guidance and threshold (25%)

Additional ethical risk where the audit firm develops GRC software for the client:

Increased fee dependence

Self-review threat (auditing a system you helped design)

📌 Examiner’s Key Observations (Why Candidates Lost Marks)

According to the examiner’s report, performance was below average due to:

Weak understanding of rotation requirements

Poor grasp of second opinion and whistleblowing processes

Inability to link ethical threats to audit implications

Poor presentation and weak application to scenario

💡 What You Will Learn From This Video

By the end of this session, you will be able to:
✅ Identify regulatory/ethical issues in complex scenarios
✅ Structure your answers using examiner-friendly points
✅ Apply professional standards clearly to case studies
✅ Use mark-allocation strategy to earn maximum marks

📌 Important Reminder: Watching is not learning.
To master this topic, practice writing answers under timed exam conditions.

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