Table of Contents
- 1 How to Pass ACCA AAA Advanced Audit and Assurance, Answering Techniques
- 1.1 Regulatory Environment
- 1.2 Commonly Tested Requirements
- 1.2.1 1. Answering technique for Risk of Material Misstatement in Financial Statement.
- 1.2.2 2. An answering technique for Matters to consider and Audit Evidence or Audit Procedure
How to Pass ACCA AAA Advanced Audit and Assurance, Answering Techniques
How to Pass ACCA AAA
Syllabus Area A, B & C
- Law and Regulations
- Money Laundering
Professional and Ethical Considerations
- Code of Ethics
- Fraud and Error
- Professional Liability
- Obtaining and accepting professional assignments
Commonly Tested Requirements
Comment on the
- Quality Control
- And other issues
- And Recommend Further action to be taken
identify the issue from the scenario, Link to IESBA’s code of ethics and write the relevant safeguard from the code.
Identify issues from the scenario related to the WAY the audit work has been done, explain why it is wrong and what impact it will have on the audit.
identify the issue from the scenario related to the WAY the audit work has been done, explain why it is wrong and link it to the element of Quality control (ISQC or IAS) that has not been conducted properly.
Recommend further action:
what steps should the auditor take next regarding each issue identified and discussed above?
1. Answering technique for Risk of Material Misstatement in Financial Statement.
- Comment on Materiality
- Write the relevant IFRS/IAS treatment
- Explain the risk, Make sure you clearly mention which part of the F/S (Amount or Disclosure) is under or overstated
2. An answering technique for Matters to consider and Audit Evidence or Audit Procedure
Matters to consider
- Comment on Materiality
- Relevant IFRS treatment (there might be more than on IFRS!)
- Risk/other issues based on the information given in the scenario
Audit procedures OR evidence
- Substantive testing: inspection, Enquiry, External confirmation, recalculation, discussion, etc
- Audit Evidence: Start your answer with ‘I would expect to see…’
3. The answering technique for Audit Opinion and audit Report
The question would normally begin with matters that need to be discussed with the management at the completion stage or further procedures at the completion stage. These will be answered by writing further procedures/ discussions that need to be done based on the information given.
The question will then ask for an impact on audit opinion and audit reports.
Writing the opinion
- Mention whether it is a misstatement or an inability to get the sufficient appropriate evidence
- Calculate and explain whether it is immaterial OR material OR pervasive
- Decide and write the opinion: Unmodified or modified. IF modified, explain the TYPE of opinion QUALIFIED EXCEPT FOR or ADVERSE or DISCLAIMER of opinion.
Writing the impact
- if the opinion is modified (above), explain the changes to the audit report
- The heading of opinion and basis for opinion paragraph will change, explain what the headings will be
- In the basis for opinion paragraph, nature, amount, IFRS and impact will be explained
- Evaluate whether any additional paragraph will be needed, for example, MUGC, EQPM, or OMP or maybe something needs to
Critically Evaluate an Audit report extract
Find answers to the following:
- Is the type of opinion correct?
- Opinion and basic for opinion paragraph Headings correct?
- Basic for opinion (All FOUR of these mentioned? Nature, amount, impact, IFRSs)
- Additional paras: Need? if yes, placement is correct?
- KAM: Do matters identified as KAM actually fulfill the criteria of being called KAM? introduction proper i.e to explain the concept of KAM etc.? Significance of issues identified as KAM and how these affected auditors’ efforts explained? How each KAM was addressed in the audit explained? placement of the paragraph correct?
- Unprofessional wording?
- Required formate
- with a professional tone and use of language
- avoiding ambiguity, unnecessary explanations, and repetition.
- Language concise, clear and factual
- use ‘justifying’ words, such as ‘because’, For example ”I recommend you this because…..”
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