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Examiner tips for AA

06 February 2019

AA candidates were reminded by the examiner that a fundamental factor in planning and assessing the risks of an audit of an entity is an assessment of audit risk - and this remains a highly examinable area! Audit risk questions typically require a number of audit risks to be identified (0.5 marks each), explained (0.5 marks each) and an auditor’s response to each risk (1 mark each). Typically you need to have 6-8 risks and responses in your armoury.

For December’s exam it was disappointing to see many candidates failed to score many marks in the knowledge requirements of internal controls. The examiner encourages students to look at Comet Publishing (Sept/Dec 2017) and Raspberry Co (March/June 2018). Some students were also weak at identifying key controls and the implications of deficiencies identified. Another area that needs beefing up is candidates’ descriptions of tests of controls that an auditor should perform.

When it comes to audit evidence many sitters did not seem to understand substantive procedures. Learning a generic list of tests will not translate to exam success.

Finally under the heading ‘review and reporting’ the examiner says candidates must ensure they are knowledgeable on modifications caused by insufficient evidence as that are for material misstatements.

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