ACCA - Paper P7 AAA

Intro to Paper P7: Advanced Audit & Assurance • Examiner: Lisa Weaver Paper P7 draws knowledge from

P2 Corporate Reporting

F8 Audit and Assurance

Paper P7: Exam structure Number of marks Section A

Section B

Two compulsory questions (Case study; usually on Planning, materiality, risk, evidence, ethics, reporting) Q1

35

Q2

25

Two out of three questions (short scenarios) Q3

20

Q4

20

Q5

20

Paper P7 Examinable documents (See list given) ISA’s

International Standards on Auditing

ISAE’s

International Standards on Assurance Engagements

IAPN’s

International Auditing Practice Notes

ISQC 1

International Standard on Quality Control 1

ISRS’s

International Standards on Related Services

ISRE’s

International Standards on Review Engagements

ED’s

Exposure Drafts

Other documents

e.g. ACCA’s Code of Ethics, IESBA’s Code of Ethics, The UK Corporate Governance Code etc

From P2 IAS’s

International Accounting Standards

IFRS ‘s

International Financial Reporting Standards

Paper P7: Technical articles from ACCA website (See list given) Auditor reporting Corporate governance and its impact on audit practice The new auditor’s report Auditing disclosures in financial statements Laws and regulations Audit quality- a perpetual current issue Professional skepticism

Using the work of internal auditors Staying on the right side of ethics Accounting issues Forensic accounting etc

Paper P7: Advanced Audit & Assurance • 4 Professional marks awarded in Section A -letter, presentation, memo, report, briefing notes etc -structure, content, style & layout -logical flow of arguments in your answer -clarity of explanation -use of professional judgement

Paper P7: Advanced Audit & Assurance • Planning & risk assessement -will be examined in every sitting -part of at least one of the compulsory questions • Planning could relate to a non-audit engagement • Evidence gathering -will be examined in every sitting -will focus on specific assertions and specific f/s balances or transactions

Paper P7: Advanced Audit & Assurance • P2 Financial Reporting knowledge -when asked to explain “matters to consider” for an audit of f/s: one of the key matters to consider is whether the relevant IFRS has been adhered to!

Ensure that P2 knowledge is up to date!

Paper P7: Advanced Audit & Assurance • The audit report (ISA 700) -will also feature in every sitting (either in Section A or B) • Knowledge of IFRS is very important!

• -how can one reach an opinion whether f/s have been properly prepared if one doesn’t know the financial reporting rules that must be used in their preparation?

Paper P7: Advanced Audit & Assurance • Ethics & professional issues -will also feature in every sitting (either in Section A or B or both) • Ethics is not just about independence • Also covers: -conflicts of interest -confidentiality -fraud & error -professional liability

Paper P7: Advanced Audit & Assurance • Peripheral areas of the syllabus (Section B) -regulatory framework -money laundering -obtaining professional work -corporate governance -transnational (group) audit

Paper P7: Advanced Audit & Assurance • Current issues (5 or 6 marks) -Always in exams; at least one requirement -not in isolation; discuss it in the context of the client scenario provided -current issues have an impact on the planning & execution of an audit or assurance engagement -therefore, could feature as part of the case study scenario in Section A

Paper P7: Advanced Audit & Assurance • Current issues -Sources of information: • Good quality newspapers • Professional journals • ACCA website (www.accagolbal.com) • IFAC website (www.ifac.org) • FT website (www.ft.com) -Candidates should take responsibility for developing their own opinion on a current issue and be able to reach their own conclusion!

Paper P7: Advanced Audit & Assurance • To secure a PASS a candidate must have: -a thorough understanding of the syllabus -an ability to apply knowledge to specific client scenarios -an ability to have an independent opinion backed by reasoned argument -practiced past exam questions & have developed strong exam technique!!

-an appreciation of commercial factors which influence practice management -an appreciation of the fast moving developments in audit & assurance practices

Paper P7: Pass rates Paper

Jun 12

Dec 12

Jun 13

Dec 13

Jun 14

Dec 14

Jun 15

Sep 15

Dec 15

Mar 16

Jun 16

Sep 16

Dec March 16 17

P1

53

50

49

48

52

52

48

48

47

50

48

45

49

45

P2

49

49

49

49

47

50

48

44

47

47

46

50

51

52

P3

48

48

51

49

46

48

46

45

47

48

48

47

49

51

P4

37

33

34

42

35

33

36

36

25

38

40

37

33

35

P5

35

33

31

30

29

30

28

30

29

33

38

35

30

28

P6

42

44

45

41

39

38

34

45

42

44

35

35

34

38

P7

32

32

31

33

36

42

40

29

39

30

32

32

31

32

Paper P7: Reasons for failure!

Examiners comments : 1. Poor exam technique, esp. bad time management 2. Not practicing enough past papers 3. Lack of technical knowledge (ISA’s & IFRS’s) 4. Failure to answer the specific question asked 5. Failure to make enough different comments given the mark allocation

Paper P7: Exam technique! • Separate presentation later!

Paper P7: Advanced Audit & Assurance

• The end!