BPP Tips - Paper 3.1 - Dec06 black, style

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Paper 3.1i Exam Tips

ACCA Paper 3.1 (Global)
Audit and Assurance Services
December 2006 Exam Tips

Suggested practice questions from the BPP Practice and Revision Kit (2006 edition) are shown after the relevant area.  We recommend you tackle all of them to get broad syllabus coverage.

Section A

Questions 1 and 2
   

Scenario questions in the context of audit risk/business risk/financial statement risk.

May also include:

• Control suggestion and/or evaluation

• Audit evidence on Paper 2.5 accounting areas (see also Q3 suggestions)

• Group audit issues (including audit work on fair values)

• Planning/practice management/quality control issues

• Assurance services, e.g. performance measurement or prospective financial information

2006 P&R Kit Questions:  10 Azure, 17 Signet, 22 Alakazam, 26 Hydasports, 47 Ferry, 55 Imperiol, Mock Exam 1 Q2 (Plaza)

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:

• Events after the balance sheet date

• Provisions

• Impairments

• Earnings per share

• Segment information

• Related party disclosures

• Deferred tax

• Discontinued operations

• Standard costing

• Intangible assets

• Revenue recognition

• Borrowing costs

2006 P&R Kit Questions:  33 Phoenix, 34 Aspersion, 35 Visean, 40 Verdi, 42 Data

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Section B

Question 4

Part (a): Any syllabus area. Part (b): A related question on reporting.

2006 P&R Kit Questions:  59 Delphinius,60 Avid, 61 Cinnabar Group, 65 Kite Associates

Question 5

Ethics, professional and quality control issues scenario question.

2006 P&R Kit Questions:  3 Aventura International, 4 Corundum, 5 Isthmus, 9 Ebony

Question 6

Discussion question on current issues, e.g:

• Fraud and auditor liability

• International convergence

• Audit exemption for small companies

• Risk-based auditing

• Related parties

• Corporate governance

• Laws and regulations

The discussion question often covers a scenario on a topic where the examiner has written an article in your Student Accountant magazine in the months prior to the exam.  You should check the magazine/ACCA website for new articles in the months leading up to your exam.

2006 P&R Kit Questions:  1 Assurance provision, 15 Fraud and error, 18 Audit failures, 19 Convergence, 50 E-commerce, 58 Environmental issues

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Relevant Articles

The examiner, Kim Smith, has written many articles and expects you to have read them and know them.  (See www.accaglobal.com/students)   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 which are of ongoing relevance:

• 'Post-balance sheet events', 20 January 2006

• 'Reading the question', 6 June 2005

• ‘Money Laundering’ 04 February 2005

• 'Technique in auditing questions', 4 September 2001

• 'Technique in auditing questions – part 2', 17 October 2001

• 'Tackling the 'Discussion' question', 1 November 2001

• 'Professional ethics – a kloser look', 30 April 2003

• 'Divided opinion' (auditors' reports), 5 November 2002

• 'Rest assured' (assurance), 1 June 2001

• 'Audit and assurance services', 27 July 2001

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.