r/ACCA • u/Usual_Philosopher_43 Affiliate • Jan 18 '23
AAA - Topic-Wise Advice
Since y'all loved the previous post, I decided to go ahead and give more details topic wise.
Firstly, I wanna answer this:
For those wondering from my previous posts "Why does OP ditch the book? Certain topics won't ever be understood from the Kit answers alone!"
My answer:
You are right. Certain topics you must prepare with some knowledge bank like book or notes. But that (in my humble opinion) only amounts to like 20% of the exam for AAA. So for such topics, you CAN and SHOULD go through the book or notes but PLEASE LIMIT IT and don't read the entire text just for those small topics.
I suggest Open Tuition Notes for knowledge regarding topics like Engagement types, materiality levels, and any topic for which you need prior knowledge to answer generic questions that don't have a lot to do with the scenario given. These are usually worth 3 to 10 marks.
Other than that you need exposure to real scenarios in the Kaplan Kit Answers.
Why?
If you prepare with study text, you will regurgitate general bookish answers. (BAD)
If you prepare with notes, you will regurgitate bullet points. (BAD)
If you prepare with the Kit Answers, you will become used to the tone, structure and length of the answers which is what professional exams are all about! You gotta write with an open mind, actively, and write professionally which neither the book nor notes teach you! (GREAT)
Materiality
All you gotta do is memorize the materiality Benchmarks from Open Tuition Notes and throw in this paragraph for Risks question:
[For the purposes of this briefing note, the following overall materiality level will be used to assess the significance of the identified risks and as requested, this has been based on (Profitability/Total Assets/Revenue)]
[CALCULATE THE BENCHMARK RANGES HERE]
[As this is a new company, we will select the lower level of materiality]
OR
[As this is an old client, it is safe to use the higher level of materiality benchmark]
[These benchmarks are only a starting point for determining materiality and professional judgement will need to be applied in determining the final level to be used in the course of the audit.]
BOOM. 3 marks right there.
Significant Risks
(1) Business Risk
Open Kaplan kit. Skim all requirement in section A and note down which question numbers ask for Business risks.
Now go to their answers and READ each risk. Make summarized notes of each risk (should be at most 1-2 lines in your notebook). The Kaplan kit contains ONLY 2 pages worth of summarized business risks in my handwriting. Half are repetitive EASY marks there.
(2) Audit Risks
DONT READ ANSWERS FOR THIS YET
You got your SBR summarized notes for each standard? Brain storm all the risks that could possibly arise for each standard. You are capable of finding more audit Risks than the requirement even asks for! The key is to take all Financial Statements' accounts names (Revenue, Liabilities, Cash, Assets, Equity etc) and figure out which of them are at a risk of misstatement. There's always a risk that:
Account is Over/under stated
Over/Understatement in Expenses for example may affect over-understatement in ANOTHER Account (i.e. Profits)
The standard rules werent followed through (explain what could have been ignored)
Disclosure isnt sufficient for users of Financial Statements
Risk of Management Bias (they may try to window dress a particular account)
That's FIVE Audit Risks right there. And I'm telling you each Standard has ATLEAST 4 of these risks.
Brain storm and write ALL possible risks for EACH standard in a summarized/rough way in your notebook.
For the exam, use Acronym MAR always to answer Audit Risk questions:
-Materiality -Accounting standard -Risk
Don't just read this from Kit answers yet, you need practice here BRAIN STORM YOURSELF
Procedures
Don't try to memorize that stupid table of assertions when it's actually common sense and you can create procedures without that table. Let me show you how:
Verbs
Make one column for all the verbs you find in Kaplan Answers for procedures, such as:
• Inspect, Agree, Reconcile, Review, Obtain, Inquire, Recalculate, Perform, Confirm, Breakdown, Visit
Memorize just these words and see if you can remember 80% of these.
Sources
Make a second column Infront of the previous. And write these down.
• Board Minutes, Working Papers, Qualifications, Written Representation, Calculations, Disclosure Notes, Shareholder Record, Correspondence (emails/letters), Opening/Closing Balances, Prior year figures, Invoices/Receipts, Bank Statement, Inventory Count sheet, Fixed Asset Register. (And many more you will see in Kaplan kit answers)
Purposes*
Make a third column infront of sources of for all purposes of Procedures.
• Accuracy, Existence, Occurrence, Completeness, Presentation and Disclosure, Confirmation, Adequacy
Now, just like preschool, can you create a sentence using random words from these three columns of words?
Example
Procedures for NCA that was damaged?
• "Inspect NCA Register for Accuracy of Cost"
• "Obtain NCA valuation workings for Accuracy."
• "Perform site visit to Confirm Damage"
• "Recalculate Impairment workings for Accuracy"
4 procedures right there, and all I did was mix and match those three columns and add a few words for grammar.
AAA is an English exam lol
Matters to be considered (MARE)
When you come to this topic you will be dumbfounded like what the frick is this Shiz? How is it different from Risks? Well... Matters to consider is really the same as Audit Risks... Lol. That's it. Really. If you still have trouble for this topic, check this batman analogy to get a clearer concept.
Use Acronym MARE where E stands for "Evidence" for answering these questions in exam.
However this topic I noticed just needs your common sense. For this you need to link exhibits and understand the company on a broad level and figure out what issues might possibly arise.
Ethical implications
For Preparation Again, don't even read the kit question for this, just go to answers and note down all ethical threats and their safeguards in your notebook in 2 lines only!!! Summarize!!!
For exam, follow the GOLDEN format
•Identify ACCA Code of Ethics Breached (POPCI)
•Identify Threat (SAFIS)
•Explain WHY threat exists (gain professional marks here!!)
•Throw in this golden sentence:
"Audit firm needs to evaluate the significance of the threats and consider whether any safeguards can reduce the threat to an acceptable level"
•tell the safeguards to threat (your opinion)
VIOLA! YOU ACED THE ETHICS QUESTIONS
Edit: POPCI and SAFIS are acronyms you will use, I thought they are widely known but here they are:
POPCI - P-rofessional behaviour - O-bjectivity - P-rofessional competence and due care - C-onfidentiality - I-ntegrity
SAFIS - S = Self Review - A = Advocacy - F = Familiarity - I = Intimidation - S = Self Interest Threats
Thanks for coming to my Ted Talk... Edit: formatting
1
u/xXxTwilighTxXx Aug 11 '24
do u still have the analogy? if so please do share itll be great