ACCA Exam Tips

June 2013 Exam Tips by Mr. Fung Chee Kong (CK)

Hot Topics

Professional ethics – Likely to have a question this June on ethical threats and safeguards/responses. (See June 2006 Q4, June 2007 Q1a, Pilot F8 Q3, Dec 2008 Q3a, June 2010 Q4, June 2011 Q4, June 2012 Q3b).

Acceptance/Continuance decisions – factors to consider before accepting/continuing with an engagement. Including communication with existing auditor before acceptance. See June 2010 Q4. See an ACCA article on acceptance of a job.

Theory of evidence – Factors affecting sufficiency and/or reliability of evidence (important). Identify the assertions for class of transactions (see recent June 2009 Q2b, Dec 2009 Q2a and Q5a).

Procedures used to obtain evidence. (AEIOU) – See June 2005 Q6 and June 2011 Q3a.

Internal audit (IA) may be featured this exam. The roles of IA in corporate governance and in risk management. Outsourcing of IA – Adv and Disadv, issues to consider (see Dec 2005 Q2, June 2011 Q4) Beware of relying on service auditor’s report on the internal controls of a service organization (ISA402).

Planning is still important, using June 2009 Q1a and Dec 2009 Q1a. Overall audit strategy vs the detailed audit plan doc (content of each doc, see 2009 both exams Q1). See also Dec 2006 Q1a for risk assessment procedures (RAP), and Dec 2009 Q3a.

Must read up on audit risk and responses to risk (see Pami’s June 2010 Q1a, Dec 2010 Q3, June 2011 Q3, Dec 2011 Q3 and Dec 2012 Q3). She may set it again. The control objectives and internal control you would expect to find in the sales OR cash receipt system (see June 2010 Q3). Identify weaknesses and recommend improvements.

Perform test of controls (see June 2011 Q1a and June 2012 Q1aiii for sample) for sales system.

Important - VFM audit, definition of 3E (see Dec 2006 Q2, Dec 2010 Q4). Identify improvements to 3E in a case study.

The substantive tests used to gather audit evidence in respect of major assertions (completeness, existence, valuation and allocation, accuracy, cutoff), especially in relation to debtor (see June 2009 Q1 and June 2011 Q1b), bank (Dec 2006 Q3 and June 2008 Q3) and cash on hand (petty cash, see Dec 2007 Q3b).

Engagement letter – Purposes, content. (See June 2011 Q2b) Interim vs Final audit – See Dec 2009 Q4a. Define true and fair – See Dec 2010 Q2a.
Assurance engagement – 5 elements (see June 2010 Q2a).

Define materiality and how materiality affects the audit (see June 2010 Q2b).

Corporate governance is important. Case study, identify improvements to corporate governance. See June 2006 Q3, Pilot Q3, Dec 2011 Q4.

Audit of non-profit organization – Characteristics of non-profit organization, the risks and how these risks affect the audit approach. (Dec 2006 Q4, Dec 2008 Q4) Subsequent event is important! Definition, responsibility and procedures (see Dec 2011 Q5, Dec 2008 Q5, Pilot paper Q5 and Dec 2005 Q4).

Treatment of misstatements identified in the audit – See June 2011 Q5a.

Audit of opening balance (first year audit) – New topic.

Elements of audit report and what each para means (see June 2007 Q4), different types of audit opinion (see Pilot paper Q2c and June 2009 Q2c), emphasis of matter para, limitation of scope (see Dec 2007 Q5).

Regulation of auditor – Why regulates? (objectives?) How ACCA regulate auditors? Other misc topics – Purposes/benefits of audit, how to remove an auditor (Dec 2005 Q5c).

There is an article recently in Sept 2012 on going concern (although this topic was examined in the recent June 2012 Q5 and a bit of it in Dec 2012 Q5), better to review the article and look out for this topic. Read up on definition of going concern, indicators of going concern, procedures to see if company faces a going concern problem.

Look out for any new article on topics relevant to F8, especially written by F8 examiner.

The above topics are just my GUESSES. Use at own risk!

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