TARC ACCA 2005

tips june 2005 paper 3.1 Audit & Assurance Services

source:- BPP
Section A
Questions 1 and 2
Scenario questions in the context of audit risk/business risk.
May also include:
• Control suggestion and/or evaluation
• Audit evidence on Paper 2.5 accounting areas (see Q3)
• Group audit issues (including audit work on fair values)
• Planning/practice management/quality control issues
• Assurance services
try out: 14 Signet, 24 Alakazam, 25 Amber Pan Europe, 44 Azure, Q2 Mock 1 Imperiol

Question 3
Audit evidence. Comment on the matters you would consider and the audit evidence you
would expect to find as audit manager conducting a review of audit files.
Likely to be several scenarios covering various Paper 2.5 level accounting standards, e.g:
• Earnings per share
• Borrowing costs
• Revenue recognition
• Standard costing
• Impairments
• Deferred tax
• Discontinued operations
• Intangible assets
• Related party disclosures
try out: 34 Aspersion, 35 Phoenix, 37 Alphasweeter, Q3 Mock 2 Visean

Section B
Question 4
Part (a): Any syllabus area. Part (b): A related question on reporting.
try out: 53 Capri, 54 Arid, Q4 Mock 1 Cinnabar

Question 5
Ethics, professional and quality control issues scenario question.
try out: 3 Aventura, 5 Isthmus, Q5 Mock 2 Corundum

Question 6
Discussion question on current issues, e.g:
2 of 2
• Money laundering (make sure you read the examiner's recent article as likely to be
examined!)
• International convergence
• Audit exemption for small companies
• Risk-based auditing
• Corporate governance
• Laws and regulations
try out: 1 Assurance provision, 6 Convergence, 51 Environmental issues

Relevant Articles
The examiner, Kim Smith, has written many articles and expects you to have read them and know them.
She often comments that students fail for not having read the articles explaining how to tackle questions.
Read as many as you can, particularly the following:
• Money laundering, 4 February 2005
• Revised group auditing standards 29 Oct 2004
• 'Professional ethics – a kloser look', 30 April 2003
• Reporting on reports on reporting 23 Apr 2003
• 'Divided opinion' (auditors' reports), 5 November 2002
• 'Tackling the 'Discussion' question', 1 November 2001
• 'Technique in auditing questions – part 2', 17 October 2001
• 'Technique in auditing questions', 4 September 2001
• 'Audit and assurance services', 27 July 2001
• 'Rest assured' (assurance), 1 June 2001

source: LVMT
• Business risks/financial statement risks
• Audit planning and audit strategy
• Audit implication of accounting standards; FRSs 10, 11, 12 and 15 are of particular relevance
• Comment on suitability of audit opinion involving going concern
• Comments on ethical and professional issues involving confidentiality/non- compliance with laws and regulations
• General discussion on money laundering and its implication on the responsibilities/liabilities

Source: FTC UK
• Risk analysis and audit strategy … possibly with Money Laundering thrown in to the case study
• Assurance Services - Performance measurement / prospective financial information
• Accounting treatments / Materiality / Audit evidence –applied to 3 scenarios – covering usual FRSs – 3, 8, 10, 11, 12, 15, 18, 21
• Audit reporting – First-Time Application of IFRSs in the UK
• Professional / Ethical Issues or Practice Mamangement – Quality Control
• Current Issues – SOX / Liability / Money Laundering


Source: FTC S'pore
Lecturer - Mr Rhys Johnson
Q1:Risk assessment and implications of an acquisition for the conduct of an audit. Group audits
Q2:Approach to an assurance engagement - engagement process, planning, procedures. Will include “how to audit” certain specified balance sheet or income statement items. Possibly PFI.
Q3:Three accounting issues - discussion of matters (accounting treatment, risks, materiality and reporting) and audit evidence. Provisions, impairments, asset valuation, RPT's are all favourite topics
Q4:Audit report - suitability of the audit report in the specified circumstances
Q5:Ethical and professional issues – likely to focus on independence, quality control, publicity, fees
Q6:Discussion question - possible topics are environmental reporting/international standards/ corporate governance/independence and the provision of other services

Money laudering will feature at some point in the examination –
most likely Q6.

Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.

Disclaimer : All the above are reproduced materials,all the copyright remained to the original sources and i shall not take any responsibility towards the accuracy and reliance on the tips.

posted by Unknown @ 12:48 AM