Audit Firm: ACCA exams

Audit firms are interested to hire and retain qualified accountants. For example, Big4 firms provide support to their employees during their study in college to obtain qualification.  ACCA (The Association of Chartered Certified Accountants) is one of the professional accounting bodies certifying accountants through exams and experience. ACCA exams test the students very rigorously and they are not easy to pass if you are not well prepared ahead of time for it. Here are few tips about approaching the ACCA exams that will prove to be helpful in your preparations and to get you pass these exams.

Familiarity with Syllabus

Get yourself familiar with the syllabus of ACCA certification. ACCA has two levels; one is the Fundamental level that includes 9 papers from F1 to F9. And the other Level is called Professional level that include a total of 7 papers from P1 to P7 but you will be given a choice to attempt any two papers among P4 to P7. Choose among the papers from P4 to P7 wisely as you may get stuck in one or two papers in the end and it can waste your exam attempts, time and money.

Learning material

Choosing your books from which to study for the exams is a very major step as it can determine your success or failure from the start. ACCA's new Approved Content Providers are:

• Becker Professional Education
• BPP Learning Media
• Kaplan Publishing

Exam Paper Analysis

After when you have finished your course well at least once you are ready to take a look at the exam papers. Analyzing exam papers for trends is very important as it can give you clues about which topics to give more weightage and which topics demand less preparation. Try to attempt the full paper in actual time bounded exam pressure simulated scenario. This will give you a very good idea of where you are lacking. Do you need to concentrate more on few topics or you need to grasp the important topics well so as to finish the paper in time.

On Exam day

Sleep well before exam day is a cliché we hear from our seniors and teachers. This is actually very important for your performance on exam day. If you will feel relax you will perform and deliver in a much better way. ACCA exams have 15 minutes reading time for reading the question paper. Use this time efficiently. Plan the first question you have to answer when the reading time is over. Also you can arrange the questions in the in the order of difficulty during that time. Attempt the easy questions first and then go for the difficult ones. When answering questions, understand the requirements of the question and write only to the point answers. Remember DO NOT leave any question unanswered of you have time remaining. There is no negative marking in these exams and writing one or two important concepts well, even if you don’t know the complete answer will secure you the minimum marks that will help you to cross the minimum passing threshold for the whole paper.

After the exam

Try avoid discussing the paper if you are going to attempt another paper in a day or two as all you have in your hands now is to get ready for the next paper and try not to repeat the mistakes which you have committed in today’s paper.

In the end I would share this beautiful quote with you.

The reason why most people face the future with apprehension instead of anticipation is because they don't have it well designed." -- Jim Rohn.

Sources:

• http://www.accaglobal.com/gb/en/discover/about.html
• http://www.accaglobal.com/ca/en/student/your-study-options/alp-content.html
• http://www.accaglobal.com/us/en/student/exam-support-resources.html

Disclaimer:
"This group is not associated with or approved by ACCA and the views expressed on this page do not necessarily reflect the views of ACCA".

Audit Method: Sampling

Audit sampling as defined by ISA 530 is “The application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population.”

The means available to the auditor for selecting items for testing are;

• Selecting all items (100% examination)
• Selecting specific items; and
• Audit Sampling

Audit sampling can be applied using either non-statistical or statistical sampling approaches.

Statistical approach has the following characteristics:

• Random selection of the sample items; and
• The use of probability theory to evaluate sample results, including measurement of sampling risk.

 A sampling approach which does not possess the above characteristics is called non-statistical sampling.

Steps in planning the sample are as follows:

• Determining the objectives of the test;
• Defining what errors or deviation are being sought;
• Identifying the population and sampling units; and
• Deciding the size of the sample.

Generally, larger the size of the sample, the more it will be representative of a population. Many audit firms would like to standardize the size of sample based on general and specific risk factors. Errors increase the imprecision of results from sampling. Therefore, if they are expected, a larger sample size is required. Finally in evaluating misstatements, the auditor, should exclude ‘anomalous’ error(s) which are misstatement or deviation that are demonstrably not representative of misstatements or deviations in a population from his projected misstatements. However, such errors may be considered when evaluating all misstatements within the sample and auditors shall obtain sufficient appropriate audit evidence to corroborate the fact that an error or deviation is anomalous.

Practice

Auditors need to consider the specific objectives to be achieved and the combination of audit procedures that is most likely to achieve those objectives. Audit sampling is applicable to both tests of control and substantive procedures.

Audit Exam Ultimate Pass Key

Last summer I successfully passed ACCA exam, P7 “Advanced Audit & Assurance”. While preparing for the exam, I designed succinct and universal “question tackling plan”, which helped to structure my ideas on auditing. In this post I would like to share my knowledge just before coming ACCA examination session.  

I believe it would be useful for all exams related with financial audit. So the candidates for qualifications like CPA or ICAEW are welcomed to utilize it as well. J

The logic is simple: the plan consists of common subjects/questions and points suggested to be addressed.

Question Tackling Plan

1.      Ethics area question

1.1.   Technical competence;

1.2.Objectivity/Independence (possible threats: self-review, familiarity, intimidation, self-interest, advocacy)

1.3.   Professional behavior;

1.4.   Integrity;

1.5.   Confidentiality.

Mnemonic: TOPIC

2.      Professional (audit business) area question

2.1.   Competence;

2.2.   Resources/costs;

2.3.   Reputation;

2.4.   Staff quality;

2.5.   Quality control: Acceptance; Directorship; Supervision; Review; Consulting; Disputes.

3.      Audit Opinion related question

3.1.   Clarity;

3.2.   Details (standards, amounts, scope);

3.3.   Structure (is heading on the right place?) of opinion and its Consistency (starts like “except for” and finishes like adverse opinion);

3.4.   Types of appropriate opinions. This depends on evidences (sufficient, mistake material and pervasive?);

3.5.   Prior year opinion.

4.      Audit Matters (audit evidence/process) question

4.1.   Materiality;

4.2.   Standard breached (IFRS, recognition, valuation criteria etc.);

4.3.   Risks of misstatement;

4.4.   Impact on Audit Opinion;

4.5.   Reliability (source of evidence).

5.      Audit Evidence question

Mnemonics:

Sources of evidence -  DADA3: Document Asset Director (interview/representations) Accounting record 3rd Party

Procedures AE IOU: Analytical (plausibility/predictability)   Enquiry & Confirm (written/verbal)     Inspection (documents/assets)       Observation (assets, process) RecalcUlation (opening balance check)

Elements of evidence:

5.1.   General: budgets/plans, accounting policy;

5.2.   Calculations: rates, models, risks, probabilities, impairment reviews, useful lives, assumptions reasonableness explanation;

5.3.   Disclosure: draft notes;

5.4.   Documents types:

5.4.1.      Bank statements, invoice, bill, dispatch/delivery note;

5.4.2.      Contract, agreement, insurance policy, title deed;

5.4.3.      Claim litigation copy, insurance claim;

5.4.4.      Log books, time-sheets;

5.4.5.      Minutes, orders, policies;

5.4.6.      Correspondence, letters;

5.4.7.      Tax returns;

5.5.   Reconciliations (with tax authority, debtor), confirmations;

5.6.   Record of discussion, interview, talk with employees;

5.7.   Valuation reports, surveys;

5.8.   Breakdowns (check for misclassification), samples.

Golden Rule:

Your answer should be always close to the question scenario: (1) the answer should be relevant; (2) the question text contains hint for answer.

You are welcomed to share your tips for audit exams. Good Luck! J

          Disclaimer:
"This group is not associated with or approved by ACCA and the views expressed on this page do not necessarily reflect the views of ACCA".