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ACCA AA (Audit & Assurance)
Notes, Practice, Mock Exam & Guides
ACCA AA (Audit and Assurance, was F8) is one of papers in Applied Skills Module. The syllabus states its aim is to develop knowledge and understanding of the process of carrying out the assurance engagement and its application in the context of the professional regulatory framework.
ACCA Audit and Assurance pass rates are relatively lower than other papers in same module which ranged from 39% to 43% in the past five sessions.
There is no significant change in the syllabus between September 2020 to June 2021 and September 2021 to June 2022 except some minor changes. Past paper questions seen in last year are still very good in preparing the exam.
In examiner’s report, it highlights some areas that many students performance can be improved such as substantive testing and procedures, test of controls and auditor’s report.
It is important to stress that the knowledge and skills in Audit and Assurance are partly relevant to Financial Reporting. Familiar with accounting standards is no doubt an advantage to take Audit and Assurance exam.
STUDY TOOLS
Exam Structure
3-hour exam
All questions are compulsory. The 3-hour (see below) exam will assess all parts of the syllabus and will test knowledge and some comprehensive or application of this knowledge.
Effective from June 2019, computer-based exam (CBE) total exam time is 3 hours and no more seeded questions in exam.
For paper-based exams, an extra 15 minutes is given to you to reflect the manual effort required as compared to the time needed for CBE. Total exam time is therefore 3 hours and 15 minutes.
Section A comprises 3 ten-mark case-based questions each containing five objective test questions.
Section B comprises one 30-mark question and two 20-mark questions. The questions will come from planning and risk assessment, internal control or audit evidence, although topics from other syllabus areas may also be included.
To know more about Computer-based Examination (CBE), please click HERE.
Syllabus
ACCA AA (was F8) is one of the Applied Skills Level papers in your ACCA professional qualification journey.
The syllabus begins with the conceptual framework for financial reporting with reference to the qualitative characteristics of useful information and the fundamental bases of accounting introduced in the Financial Accounting (FA) syllabus within the Knowledge module. It then moves into a detailed examination of the regulatory framework of accounting and how this informs the standard setting process.
The main areas of the syllabus cover the reporting of financial information for single companies and for groups in accordance with generally accepted accounting principles and relevant accounting standards.
Finally, the syllabus covers the analysis and interpretation of information from financial reports.
The syllabus starts with the nature, purpose and scope of assurance engagements, including the statutory audit, its regulatory environment, and introduces governance and professional ethics relating to audit and assurance.
It then leads into planning the audit and performing risk assessment.
The syllabus then covers a range of areas relating to an audit of financial statements including the scope of internal control and the role and function of internal audit. These include, evaluating internal controls, audit evidence, and a review of the financial statements.
In addition to final review procedures, the final section concentrates on reporting, including the form and content of the independent auditor’s report.
There are 5 sections in the syllabus, which are –
A Audit framework and regulation
Explain the concept of audit and assurance and the functions of audit, corporate governance, including ethics and professional conduct.
B Planning and risk assessment
Demonstrate how the auditor obtains and accepts audit engagements, obtains an understanding of the entity and its environment, assesses the risk of material misstatement (whether arising from fraud or other irregularities) and plans an audit of financial statements
C Internal control
Describe and evaluate internal controls, techniques and audit tests, including IT systems to identify and communicate control risks and their potential consequences, making appropriate recommendations. Describe the scope, role and function of internal audit.
D Audit evidence
Identify and describe the work and evidence obtained by the auditor and others required to meet the objectives of audit engagements and the application of the International Standards on Auditing (ISAs)
E Review and reporting
Explain how consideration of subsequent events and the going concern principle can inform the conclusions from audit work and are reflected in different types of auditor’s report, written representations and the final review and report.
In the exam, you will see questions from every section in the summary above. There is no one area you can ignore as all of them will be in your exam. Perhaps you find the topics above are separated, however, they are linked together in real business world as well as the syllabus design.
Time Management
The general principle in ACCA Performance Management Paper exam is 1 mark per 1.8 minute which means you have 100 marks to complete an exam within 180 minutes (CBE).
It is observed that many good attempts in Section A but not in Section B. You should be careful that the time spent on Section B questions of the exam. Examiners suggest you should allocate 126 minutes (or 70%), the minimum, of your total time in attempting Section B. It is probably more than what you need to work.
It is wise for you to practice pass papers and mock exam to train your time management skills before you need to attempt the paper.
A lot of students ask whether they need Paper AA textbook and some tutors said it's their own choice.
If your answer to either of question below is yes, buy the book:
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Are you doing self-study with some popular tutor's notes?
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Do you commit to ACCA study?
Draft your study plan, buy a textbook and follow the plan strictly is the path to success.
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Exam Tips
ACCA Audit and Assurance pass rates are relatively low which is below 40%. How to study it to pass in exam is one of the questions asked frequently by students.
ACCA AA is different from other Skills Module papers, it has only 2 sections while Section A is 3 case-based objective test questions and Section B is divided into 1 30-mark question and 2 20-mark questions.
From Examiner’s report, it seems Section B performance is generally worse than Section A while it is very critical to pass the exam with well performance in Section B.
Difficult Subjects
The following areas are considered challenging in Section A to a lot of students, they are –
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Importance of disclosures to the audit and the need to have accounting knowledge;
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Opinion in auditor’s report.
For Section B, examiner recently shares which areas are performed relatively weak by students –
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Purchase cycle and inventory cycle audit risk;
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Auditor responses;
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Knowledge area in internal control;
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Descriptions of tests of controls that an auditor should perform;
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General substantive procedures to the specific issues;
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Discuss an accounting issue, assess whether the error is material, consider the type of modification, if any, and lastly to discuss the impact on the auditor’s report.
Last but not the least, Examiner always stresses you to pick “easy marks” first. We all know that it is very rare to have “full marks” in an exam. It is a test of you on how to allocate the limited resources, i.e. time, to get the maximum marks available. Sticking into the questions you are not familiar with is probably losing time to pick those “easy marks”.
