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. 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, selfinterest, advocacy) 1.3. Professional behavior; 1.4. Integrity; 1.5. Confidentiality. Mnemonic: TOPIC 2. 2.1. 2.2. 2.3. 2.4. 2.5. 3. 3.1. 3.2. 3.3. Professional (audit business) area question Competence; Resources/costs; Reputation; Staff quality; Quality control: Acceptance; Directorship; Supervision; Review; Consulting; Disputes.

Audit Opinion related question Clarity; Details (standards, amounts, scope); 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. 4.1. 4.2. 4.3. 4.4. 4.5. Audit Matters (audit evidence/process) question Materiality; Standard breached (IFRS, recognition, valuation criteria etc.); Risks of misstatement; Impact on Audit Opinion; Reliability (source of evidence). Mnemonics:

5. Audit Evidence question

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!