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AAA Answering Skill
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  • Module
  • ACCA Advanced Audit Assurance
  • Institution
  • Self Study
  • Book
  • ACCA ADVANCED AUDIT AND ASSURANCE (INTERNATIONAL)

This contains my own analysis of general answering skills, specific answering skill for each chapter and analysis of some past year question according to topic. If you have any further queries on how to tackle AAA, I am more than happy to provide you some personal advice.

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Document information

  • December 16, 2018
  • 21
  • 2018/2019
  • Study guide

Subjects

  • aaa
  • acca
  • advanced audit and assurance
  • p7

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  • ACCA Advanced Audit Assurance
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Answering Skill
General Skill
1) Understand the strategy your client is following and look at how that impacts the fnancial accounts.
- high-risk areas depending on people’s strategic goals.
- It’s a nod to human nature almost – recognising areas where a company might overstate or
understate because that serves their strategic purpose.
- Eg. High amount of compettono a company might overstate proftss or where a company is going for
expansiono they might be at risk of overstatng their assets to support that expansion.

2) Using the scenario
- Pointo Exampleo Relateo Recommendatons Conclusion (link back to the requirement).

3) Good answers will present both sides of the argument

- Counter-argument. Try and argue both sides as much as possible. Presentng a separate paragraph
for each side of the argument.

- Audit isn’t preciseo and it does come down to professional judgement. It is not a black-and-white
right wrong answer.
- Don’t straight away make conclusion, make possible assumpton frst, then discusso then choose
which you think is the most appropriate

4) When writng audit procedures
- choose your terminology carefully.
- ‘Check’  AEIOU
- try to be as detailed as possible. State the documents from which the evidence will be obtainedo and
whether they relate to any specifc period (for instanceo ‘post year-end cash receipts book' or 'pre-
year-end cash receipts book’ is preferable to simply writng ‘cash book’)

5) Ensure you have a good understanding of the various formats.
- Eg. defciencieso implicatons and recommendatons may be requested in the form of a report to
management.

6) The fgures in the statement must useo to discuss the materiality (Easy Marks)

7) Don’t just highlight the point. Identfy the issue and put a quick note to develop a plan.

8) More valid points you makeo the more marks you will score! Use Common Sense brainstorm.

9) Beware that litle word “and” as in “Identfy and explain ….” – that‘s two questons and each element
will have marks allocated to it – some for identfcaton and some for explanaton

10) Common audit evidence
 prior year audited f s
 post-year mgt a c & interim fnancial a c
 discussions with management
 breakdown

,  writen representatons
 internal auditors
 internal controls
 review prepared by client
 rato calculaton and analytcal procedures
 third party confrmatons
 cash book & bank statement

11) Explain exactly why you wish to talk to managemento why you want to look at last year‘s audit fle or
what you want with the internal auditors

12) If you have used the word “and” within the pointo you could make two separate points out of it eg
“The auditors should consider the strength of the internal controls and whether those controls have
been exercised throughout the reportng period”

13) Questoning yourself
 Do you plan your answer?
 Do you spend the appropriate length of tme planning?
 Do you repeatedly read the queston requirements very carefully to ensure that the directon that
you are about to take with your planned answer is the same directon that the examiner wants
you to take?
 What have you been asked to do and for who / how do the requirements connect what is the
best approach?
 Do you give advice / make recommendatons?
 Do you write legibly?
 Do you ever write a paragraph longer than 3 lines?
 Do you always leave a line between your paragraphs? Too add more if needed
 Do you segregate the points in your answer into similar groupings?
 Do you provide a sub-heading to your grouped ideas?
 Do you appreciate the diference between “state what evidence you should expect to fnd on the
audit fle” and “identfy those further audit procedures that you expect to be carried out”
 Do you always start your exam answers with tackling queston 1?

14) Materiality or ratos calculaton to support your answer?

15) Don’t miss out whole part of questono u are putting your self at risk

16) Queston contains a lot of numbers, u should be fairly detailed in your examinaton of them. (consider
the ratonale behind)


Example Approach Checklist
Read the requirement before the detailed What ISAs are relevant in the circumstances
text – what are you being asked to do
Read the queston and highlight relevant Do I have to consider the accountng
parts of the scenario treatment?
Note the points you want to cover – do you What are the key issues / risks that I should
have enough diferent points to score the address?
marks
Draft a plan – how will you order the points – What would the best response /
do some deserve more discussion recommendaton / course of acton on the

, circumstances




17) Understand the impact of each accountng standard on the three fnancial statements (SOPLo SOFP
and Cash fow)

18) Candidates should bear the mark allocaton in mindo and use it to determine how long to spend in
answering each part of the queston.

19) Read the queston carefullyo pay attenton to detail. One word omited could cost a lot of diference.
Nouns and verbs highlight, refer back to the key word, it can give u answer.

20) Not key point wordo keep it short and clear




Wording
1) Relate to case
- Accountng ratoo.relatve to growtho.
- o. in relaton to ... 由此关联
- o.in light ofo.. 鉴于此有
- o.in line of auditor’s overall knowledge of the business
2) Negatve issue
- Any concerns should be communicated to those charged with governanceo audit commitee should be
made aware of the implicatons of the xxx on the audit.
- Safeguards must be in place to reduce the potental threat to an acceptable levelo such as a review of
audit work performed
- Make assumpton of wrong doing  under pressure to smoothen the proft in order to sustain S P.
Earnings mgt technqie. Revenue fall how much? If exclude the manipulatono the revenue will fall
even larger at how many %
- Further acton  investgate any other potental manipulaton in other areas

3) Materiality
- Revenue of $20m amountng to 11% of revenueo so it is material to the f s
- o..represents 12% of revenueo




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