ACCA advanced audit and assurance international practice and revision kit 2020

lOMoARcPSD|4453900 ฀ ฀ ฀ ฀ ฀ ฀ ฀ Advanced฀Audit฀and Assurance฀–฀International (AAA฀–฀INT) Practice฀&฀Revision฀Kit BPP฀ Learning฀ Media฀ is฀ an฀ ACCA฀ Approved฀ Content฀ Provider฀ for฀ the฀ ACCA฀ qualification.฀ This฀ means฀ we฀ work฀ closely฀ with฀ ACCA฀ to฀ ensure฀ our฀ products฀fully฀prepare฀you฀for฀your฀ACCA฀exams.฀ In฀this฀Practice฀&฀Revision฀Kit,฀which฀has฀been฀reviewed฀by฀the฀ACCA฀ examining฀team,฀we:฀  Discuss฀the฀best฀strategies฀for฀revising฀and฀taking฀your฀ACCA฀exams฀  Ensure฀you฀are฀well฀prepared฀for฀your฀exam฀  Provide฀you฀with฀lots฀of฀great฀guidance฀on฀tackling฀questions฀  Provide฀you฀with฀four฀mock฀exams฀ For฀exams฀in฀September฀2019,฀December฀2019, March฀2020฀and฀June฀2020 ฀ ฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Thirteenth฀edition฀2019฀ ฀ ISBN฀9781฀5097฀2458฀1฀ (Previous฀ISBN฀9781฀5097฀1674฀6)฀ e-ISBN฀9781฀5097฀2450฀5฀ ฀ A฀note฀about฀copyright฀ Dear฀Customer฀ What฀does฀the฀little฀©฀mean฀and฀why฀does฀it฀matter?฀ Cataloguing-in-Publication฀Data A฀catalogue฀record฀for฀this฀book฀is฀available฀฀ from฀the฀British฀Library Published฀by฀ Breach฀of฀copyright฀is฀a฀form฀of฀theft฀–฀as฀well฀as฀being฀a฀ criminal฀offence฀in฀some฀jurisdictions,฀it฀is฀potentially฀a฀ serious฀breach฀of฀professional฀ethics.฀ BPP฀Learning฀Media฀Ltd฀ BPP฀House,฀Aldine฀Place฀ 142–144฀Uxbridge฀Road฀ London฀W12฀8AA฀ With฀current฀technology,฀things฀might฀seem฀a฀bit฀hazy฀ but,฀basically,฀without฀the฀express฀permission฀of฀BPP฀ Learning฀Media:฀ www.bpp.com/learningmedia฀ Printed฀in฀the฀United฀Kingdom฀ Your฀learning฀materials,฀published฀by฀BPP฀Learning฀Media฀Ltd,฀are฀ printed฀on฀paper฀obtained฀from฀traceable฀sustainable฀sources.฀ All฀rights฀reserved.฀No฀part฀of฀this฀publication฀may฀be฀reproduced,฀stored฀ in฀a฀retrieval฀system฀or฀transmitted฀in฀any฀form฀or฀by฀any฀means,฀ electronic,฀mechanical,฀photocopying,฀recording฀or฀otherwise,฀without฀the฀ prior฀written฀permission฀of฀BPP฀Learning฀Media.฀ The฀contents฀of฀this฀book฀are฀intended฀as฀a฀guide฀and฀not฀professional฀ advice.฀Although฀every฀effort฀has฀been฀made฀to฀ensure฀that฀the฀contents฀of฀ this฀book฀are฀correct฀at฀the฀time฀of฀going฀to฀press,฀BPP฀Learning฀Media฀ makes฀no฀warranty฀that฀the฀information฀in฀this฀book฀is฀accurate฀or฀ complete฀and฀accept฀no฀liability฀for฀any฀loss฀or฀damage฀suffered฀by฀any฀ person฀acting฀or฀refraining฀from฀acting฀as฀a฀result฀of฀the฀material฀in฀this฀ book.฀ We฀are฀grateful฀to฀the฀Association฀of฀Chartered฀Certified฀Accountants฀for฀ permission฀to฀reproduce฀past฀examination฀questions.฀The฀suggested฀ solutions฀in฀the฀practice฀answer฀bank฀have฀been฀prepared฀by฀BPP฀Learning฀ Media฀Ltd,฀except฀where฀otherwise฀stated.฀ BPP฀Learning฀Media฀is฀grateful฀to฀the฀IASB฀for฀permission฀to฀reproduce฀ extracts฀from฀the฀International฀Financial฀Reporting฀Standards฀including฀all฀ International฀Accounting฀Standards,฀SIC฀and฀IFRIC฀Interpretations฀(the฀ Standards).฀The฀Standards฀together฀with฀their฀accompanying฀documents฀ are฀issued฀by:฀ The฀International฀Accounting฀Standards฀Board฀(IASB)฀30฀Cannon฀Street,฀ London,฀EC4M฀6XH,฀United฀Kingdom.฀Email:฀info@ifrs.org฀฀฀ Web:฀www.ifrs.org฀ Disclaimer:฀The฀IASB,฀the฀International฀Financial฀Reporting฀Standards฀ (IFRS)฀Foundation,฀the฀authors฀and฀the฀publishers฀do฀not฀accept฀ responsibility฀for฀any฀loss฀caused฀by฀acting฀or฀refraining฀from฀acting฀in฀ reliance฀on฀the฀material฀in฀this฀publication,฀whether฀such฀loss฀is฀caused฀by฀ negligence฀or฀otherwise฀to฀the฀maximum฀extent฀permitted฀by฀law.฀ ©฀ BPP฀Learning฀Media฀Ltd฀ 2019฀ Your฀market-leading฀BPP฀books,฀course฀materials฀and฀elearning฀materials฀do฀not฀write฀and฀update฀themselves.฀ People฀write฀them฀on฀their฀own฀behalf฀or฀as฀employees฀of฀ an฀organisation฀that฀invests฀in฀this฀activity.฀Copyright฀law฀ protects฀their฀livelihoods.฀It฀does฀so฀by฀creating฀rights฀ over฀the฀use฀of฀the฀content.฀ ฀ Photocopying฀our฀materials฀is฀a฀breach฀of฀ copyright฀ ฀ Scanning,฀ripcasting฀or฀conversion฀of฀our฀digital฀ 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limited.฀No฀part฀of฀this฀publication฀may฀be฀translated,฀ reprinted฀or฀reproduced฀or฀utilised฀in฀any฀form฀either฀in฀ whole฀or฀in฀part฀or฀by฀any฀electronic,฀mechanical฀or฀other฀ means,฀now฀known฀or฀hereafter฀invented,฀including฀ photocopying฀and฀recording,฀or฀in฀any฀information฀ storage฀and฀retrieval฀system,฀without฀prior฀permission฀in฀ writing฀from฀the฀IFRS฀Foundation.฀Contact฀the฀IFRS฀ Foundation฀for฀further฀details.฀ The฀IFRS฀Foundation฀logo,฀the฀IASB฀logo,฀the฀IFRS฀for฀ SMEs฀logo,฀the฀"Hexagon฀Device",฀"IFRS฀Foundation",฀ "eIFRS",฀"IAS",฀"IASB",฀"IFRS฀for฀SMEs",฀"IASs",฀"IFRS",฀ "IFRSs",฀"International฀Accounting฀Standards"฀and฀ "International฀Financial฀Reporting฀Standards",฀"IFRIC"฀ "SIC"฀and฀"IFRS฀Taxonomy"฀are฀Trade฀Marks฀of฀the฀ IFRS฀Foundation.฀ Further฀details฀of฀the฀Trade฀Marks฀including฀details฀of฀ countries฀where฀the฀Trade฀Marks฀are฀registered฀or฀ applied฀for฀are฀available฀from฀the฀Licensor฀on฀request.฀ ฀ ii฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Topic฀index฀ Contents฀ ฀ ฀ ฀ Page฀ Finding฀questions฀ Question฀index฀ Topic฀index฀ iv฀ vii฀ The฀exam฀ ix฀ Helping฀you฀with฀your฀revision฀ Essential฀skills฀areas฀ xviii฀ xx฀ Parts฀A฀and฀B:฀Regulatory฀environment฀and฀professional฀and฀ethical฀considerations฀ Questions฀ Answers฀฀ 3฀ 107฀ Part฀C:฀Quality฀control฀and฀practice฀management฀ Questions฀ Answers฀ 11฀ 144฀ Part฀D:฀Planning฀and฀conducting฀an฀audit฀of฀historical฀financial฀information฀ Questions฀ Answers฀ 18฀ 178฀ Part฀E:฀Completion,฀review฀and฀reporting฀ Questions฀ Answers฀ 73฀ 390฀ Part฀F:฀Other฀assignments฀ Questions฀ Answers฀ 95฀ 478฀ Mock฀exams฀ Mock฀exam฀1฀ ฀ Questions฀ ฀ Answers฀ 523฀ 531฀ Mock฀exam฀2฀(ACCA฀2018฀Specimen฀exam)฀ ฀ Questions฀ ฀ Answers฀ 559฀ 569฀ Mock฀exam฀3฀(Mar/Jun฀18฀exam)฀(amended)฀ ฀ Questions฀ ฀ Answers฀ 599฀ 609฀ Mock฀exam฀4฀(Dec฀18฀exam)฀ ฀ Questions฀ ฀ Answers฀ 637฀ 647฀ Review฀form฀ ฀ ฀ ฀ iii฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Finding฀questions฀ Question฀index฀ The฀headings฀in฀this฀checklist/index฀indicate฀the฀main฀topics฀of฀questions,฀but฀questions฀are฀expected฀ to฀cover฀several฀different฀topics.฀ Questions฀set฀under฀the฀previous฀syllabus,฀P7,฀are฀included฀because฀their฀style฀and฀content฀are฀very฀ similar฀ to฀ that฀ of฀ the฀ current฀ AAA฀ exam.฀ The฀ questions฀ have฀ been฀ amended฀ to฀ reflect฀ the฀ current฀ exam.฀ ฀ Time฀ allocation Page฀number฀ Marks Mins฀ Question฀ Answer 1฀฀Lark฀(P7฀6/12)฀(amended)฀ 25฀ 49฀ 3฀ 107฀ 2฀฀Plant฀(P7฀12/12)฀(amended)฀ 25฀ 49฀ 4฀ 112฀ 3฀฀Becker฀(P7฀12/08)฀ 20฀ 39฀ 5฀ 117฀ 4฀฀Peaches฀(P7฀12/09)฀(amended)฀ 25฀ 49฀ 6฀ 121฀ 5฀฀Cobra฀(P7฀Sep/Dec฀17)฀ 20฀ 39฀ 7฀ 125฀ 6฀฀Smith฀&฀Co฀(P7฀6/08)฀(amended)฀ 25฀ 49฀ 8฀ 129฀ 7฀฀Ryder฀(P7฀6/14)฀ 20฀ 39฀ 9฀ 134฀ 8฀฀Chennai฀(P7฀Mar/Jun฀16)฀(amended)฀ 20฀ 39฀ 9฀ 138฀ 9฀฀฀฀Bunk฀(P7฀6/15)฀ 20฀ 39฀ 11฀ 144฀ 10฀฀Grape฀(P7฀12/09)฀ 36฀ 70฀ 11฀ 149฀ 11฀฀Nate฀&฀Co฀(P7฀12/07)฀ 20฀ 39฀ 13฀ 156฀ 12฀฀Sepia฀&฀Co฀ 20฀ 39฀ 14฀ 160฀ 13฀฀Groom฀(P7฀6/13)฀(amended)฀ 25฀ 49฀ 14฀ 164฀ 14฀฀Raven฀(P7฀6/12)฀(amended)฀ 25฀ 49฀ 15฀ 168฀ 15฀฀Dragon฀Group฀(P7฀6/09)฀(amended)฀ 25฀ 49฀ 16฀ 174฀ ฀ ฀ ฀ ฀ 16฀฀Goldfinch฀(P7฀Sep/Dec฀17)฀ 25฀ 49฀ 18฀ 178฀ 17฀฀Ted฀(P7฀6/15)฀(amended)฀ 50฀ 98฀ 19฀ 184฀ 18฀฀Francis฀(P7฀12/14)฀ 25฀ 49฀ 22฀ 195฀ ฀ Parts฀A฀and฀B:฀Regulatory฀environment฀ and฀professional฀and฀ethical฀ considerations฀ ฀ Part฀C:฀Quality฀control฀and฀practice฀ management฀ ฀ Part฀D:฀Planning฀and฀conducting฀an฀audit฀ of฀historical฀financial฀information฀ iv฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Topic฀index฀ ฀ Time฀ allocation Page฀number฀ Marks Mins฀ Question฀ Answer 19฀฀Thurman฀(P7฀Sep/Dec฀16)฀ 25฀ 49฀ 23฀ 203฀ 20฀฀Faster฀Jets฀(P7฀12/14)฀(amended)฀ 25฀ 49฀ 24฀ 209฀ 21฀฀Magpie฀(P7฀6/12)฀(amended)฀ 50฀ 98฀ 25฀ 215฀ 22฀฀Adder฀(P7฀6/15)฀(amended)฀ 20฀ 39฀ 28฀ 224฀ 23฀฀Setter฀(P7฀6/13)฀(amended)฀ 20฀ 39฀ 29฀ 230฀ 24฀฀York฀(P7฀Mar/Jun฀16)฀(amended)฀ 25฀ 49฀ 30฀ 234฀ 25฀฀Mondrian฀(P7฀Sep/Dec฀15)฀(amended)฀฀ 50฀ 98฀ 31฀ 240฀ 26฀฀Bill฀(P7฀6/11)฀(amended)฀ 39฀ 76฀ 33฀ 250฀ 27฀฀Parker฀(P7฀6/13)฀ 35฀ 68฀ 36฀ 258฀ 28฀฀Stow฀(P7฀12/13)฀(amended)฀ 35฀ 68฀ 38฀ 266฀ 29฀฀Cooper฀(P7฀6/14)฀(amended)฀ 20฀ 39฀ 40฀ 273฀ 30฀฀Grohl฀(P7฀12/12)฀(amended)฀ 50฀ 98฀ 41฀ 278฀ 31฀฀Champers฀(P7฀6/09)฀(amended)฀ 36฀ 70฀ 43฀ 286฀ 32฀฀Grissom฀(P7฀6/10)฀(amended)฀ 38฀ 74฀ 45฀ 292฀ 33฀฀Sunshine฀(P7฀Sep/Dec฀17)฀(amended)฀ 50฀ 98฀ 47฀ 298฀ 34฀฀Laurel฀(P7฀Mar/Jun฀17)฀(amended)฀ 50฀ 98฀ 49฀ 308฀ 35฀฀Dasset฀(P7฀12/13)฀(amended)฀ 20฀ 39฀ 52฀ 319฀ 36฀฀Soprano฀(P7฀6/15)฀ 20฀ 39฀ 53฀ 323฀ 37฀฀Willow฀(P7฀12/11)฀(amended)฀ 25฀ 49฀ 54฀ 328฀ 38฀฀Jovi฀(P7฀12/12)฀ 28฀ 55฀ 55฀ 332฀ 39฀฀Jolie฀(P7฀12/10)฀(amended)฀ 50฀ 98฀ 58฀ 336฀ 40฀฀Vancouver฀(P7฀Mar/Jun฀16)฀(amended)฀ 50฀ 98฀ 61฀ 344฀ 41฀฀Bluebell฀(P7฀12/08)฀(amended)฀ 36฀ 70฀ 64฀ 354฀ 42฀฀Robster฀(P7฀6/09)฀(amended)฀ 25฀ 49฀ 66฀ 360฀ 43฀฀Connolly฀(P7฀12/14)฀ 35฀ 68฀ 67฀ 364฀ 44฀฀Osier฀(P7฀Mar/Jun฀17)฀(amended)฀ 25฀ 49฀ 69฀ 372฀ 45฀฀Macau฀(P7฀Mar/Jun฀16)฀ 25฀ 49฀ 70฀ 378฀ 46฀฀Northwest฀(P7฀Sep/Dec฀16)฀(amended)฀ 25฀ 49฀ 72฀ 385฀ ฀ Part฀D:฀Planning฀and฀conducting฀an฀audit฀ of฀historical฀financial฀information฀ ฀ v฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ ฀ Time฀ allocation Page฀number฀ Marks Mins฀ Question฀ Answer 47฀฀Rope฀(P7฀Sep/Dec฀16)฀(amended)฀ 25฀ 49฀ 73฀ 390฀ 48฀฀Kandinsky฀(P7฀Sep/Dec฀15)฀ 25฀ 49฀ 74฀ 396฀ 49฀฀Butler฀(P7฀6/11)฀(amended)฀ 25฀ 49฀ 76฀ 403฀ 50฀฀Yew฀(P7฀12/11)฀(amended)฀ 25฀ 49฀ 78฀ 408฀ 51฀฀Fern฀(P7฀Mar/Jun฀17)฀(amended)฀ 25฀ 49฀ 79฀ 412฀ 52฀฀Boston฀(P7฀Mar/Jun฀16)฀(amended)฀ 25฀ 49฀ 80฀ 419฀ 53฀฀Coram฀(Sep฀18)฀ 25฀ 49฀ 81฀ 424฀ 54฀฀Dexter฀(P7฀12/08)฀ 20฀ 39฀ 83฀ 431฀ 55฀฀Willis฀(P7฀12/10)฀(amended)฀ 25฀ 49฀ 84฀ 435฀ 56฀฀Newman฀(P7฀12/10)฀(amended)฀ 25฀ 49฀ 85฀ 440฀ 57฀฀Marr฀(P7฀6/14)฀(amended)฀ 25฀ 49฀ 87฀ 445฀ 58฀฀Pluto฀(P7฀6/09)฀(amended)฀ 25฀ 49฀ 88฀ 449฀ 59฀฀Burford฀(P7฀12/13)฀ 20฀ 39฀ 89฀ 454฀ 60฀฀Basking฀(P7฀Sep/Dec฀17)฀ 20฀ 39฀ 90฀ 458฀ 61฀฀Hopper฀(P7฀Sep/Dec฀15)฀(amended)฀ 25฀ 49฀ 91฀ 462฀ 62฀฀Darren฀(P7฀6/15)฀ 20฀ 39฀ 92฀ 468฀ 63฀฀Chester฀&฀Co฀(P7฀12/13)฀(amended)฀ 25฀ 49฀ 93฀ 473฀ 64฀฀Leopard฀(P7฀Sep/Dec฀17)฀ 20฀ 39฀ 95฀ 478฀ 65฀฀Apricot฀and฀Lychee฀(P7฀12/09)฀(amended)฀ 25฀ 49฀ 96฀ 484฀ 66฀฀Mizzen฀(P7฀12/13)฀ 25฀ 49฀ 97฀ 489฀ 67฀฀Titian฀(P7฀Sep/Dec฀15)฀(amended)฀ 25฀ 49฀ 99฀ 496฀ 68฀฀Jacob฀(P7฀6/11)฀(amended)฀ 25฀ 49฀ 100฀ 502฀ 69฀฀Crocus฀ 25฀ 49฀ 101฀ 507฀ 70฀฀Jansen฀(Sep฀18)฀ 25฀ 49฀ 102฀ 511฀ ฀ Part฀E:฀Completion,฀review฀and฀reporting฀ Part฀F:฀Other฀assignments฀ Mock฀exam฀1฀ Mock฀exam฀2฀(ACCA฀2018฀Specimen฀exam)฀฀ Mock฀exam฀3฀(March/June฀18฀exam)฀(amended)฀ Mock฀exam฀4฀(December฀18฀exam)฀ vi฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Topic฀index฀ Topic฀index฀ Listed฀ below฀ are฀ the฀ key฀ AAA฀ syllabus฀ topics฀ and฀ the฀numbers฀of฀the฀questions฀in฀this฀Kit฀covering฀ those฀topics.฀We฀have฀also฀included฀a฀reference฀to฀the฀relevant฀Chapter฀of฀the฀BPP฀AAA฀Workbook,฀ the฀companion฀to฀the฀BPP฀AAA฀Practice฀and฀Revision฀Kit,฀in฀case฀you฀wish฀to฀revise฀the฀information฀ on฀the฀topic฀you฀have฀covered.฀ If฀you฀need฀to฀concentrate฀your฀practice฀and฀revision฀on฀certain฀topics฀or฀if฀you฀want฀to฀attempt฀all฀ available฀questions฀that฀refer฀to฀a฀particular฀subject,฀you฀will฀find฀this฀index฀useful.฀ Workbook฀ chapter฀ Syllabus฀topic฀ Question฀numbers฀ A1:฀฀International฀regulatory฀ frameworks฀for฀audit฀and฀ assurance฀services฀ ME1฀Q1฀ 1฀ A2:฀฀Money฀laundering฀ 1(a),฀4(c),฀10(c),฀11(a)฀ 1฀ A3:฀฀Laws฀and฀regulations฀ 22(b),฀35(b)฀ 1฀ B1:฀฀Code฀of฀Ethics฀for฀Professional฀ Accountants฀ 1(b),฀2(b),฀3,฀4(b),฀5,฀6,฀7(c)–(d),฀8(b),฀9,฀ 10(a),฀11(b)–(c),฀12(b),฀15(a)–(b),฀21(d),฀25(d),฀ 27(b),฀30(a),฀33(d),฀36(a),฀39(d),฀40(d),฀43(d),฀ 46(b)–(c),฀47(c),฀51(a),฀53(b),฀55(c),฀57(b),฀ 60(b),฀61(d),฀63(a)–(b),฀67(b),฀69(c)฀฀ 2฀ B2:฀฀Fraud฀and฀error฀ 24(a),฀25(a),฀69(b)฀ 3฀ B3:฀฀Professional฀liability฀ 13(a)฀ 3฀ C1:฀฀Quality฀control฀(firm-wide)฀ 9,฀10(b),฀14(c),฀45(a),฀58(c)฀ 4฀ C2:฀฀Advertising,฀tendering฀and฀ obtaining฀professional฀work฀ and฀fees฀ 7(c),฀12,฀17(a),฀39(d)฀฀ 5฀ C3:฀฀Professional฀appointments฀ 2(a),฀15(a)–(b),฀34(d)฀ 5฀ D1:฀฀Planning,฀materiality฀and฀ assessing฀the฀risk฀of฀material฀ misstatement฀ 7(a),฀17(b)–(c),฀20(a),฀21(b),฀25(b),฀26(a),฀27(a), 28(a),฀30(a),฀31(a)–(b),฀32(a),฀33(a)–(c),฀฀ 34(a)–(c),฀39(a)–(b),฀40(b),฀41(a),฀43(a)–(b)฀ 6฀ D2:฀฀Evidence฀and฀testing฀ considerations฀ 26(b),฀27(a),฀34(a),฀40(a),฀60(a)฀ 7฀ D3:฀฀Audit฀procedures฀and฀evidence฀ 7(b),฀13(b),฀17(b)฀and฀(d),฀19,฀21(c),฀22(a),฀ 23,฀25(c),฀28(b),฀29(a),฀30(b),฀31(c),฀32(c),฀ evaluation฀ 33(d),฀34(e),฀35(a),฀36(b),฀37(a),฀39(c),฀41(b),฀ 42(a),฀43(c),฀44(a),฀51(b),฀53(a),฀60(b),฀67(b)฀ 8฀ D4:฀฀Using฀the฀work฀of฀others฀ 20(b),฀28(c)฀ 7฀ D5:฀฀Group฀audits฀ 15(c),฀18,฀21(a),฀32(b),฀34(c),฀40(c),฀47,฀61(b)฀ 9฀ E1:฀฀Subsequent฀events฀and฀going฀ concern฀ 18(b),฀47(a)–(b),฀48(a),฀49,฀50(a),฀52(a),฀54,฀ 59,฀65(c)฀฀ 10฀ E2:฀฀Completion฀and฀final฀review฀ 21(c),฀24(b),฀29(b),฀37,฀38(a),฀45,฀46(c),฀ 50(b)–(c),฀53(a),฀58(b)–(c),฀61(c),฀70(b)฀฀ 10฀ vii฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Workbook฀ chapter฀ Syllabus฀topic฀ Question฀numbers฀ E3:฀฀Auditor's฀reports฀ 1(c),฀14(c),฀47(d),฀49(b),฀51(c),฀52(c),฀53(a),฀ 54(c),฀55(a),฀56(c),฀57(a),฀58(b),฀59(b),฀60(c),฀ 61(a)–(c),฀62,฀63(c)฀ 11฀ E4:฀฀Reports฀to฀those฀charged฀with฀ governance฀and฀management฀ 19,฀37(b),฀52(b),฀55(c),฀60(a)฀ 11฀ F1:฀ Audit-related฀and฀assurance฀ services฀ 8(a),฀66(c)฀฀ 12฀ F2:฀ Specific฀assignments฀ 36(c),฀43(b),฀64(a)–(b),฀65,฀66(a),฀67(a),(c),฀฀ 68(a)–(b),฀69,฀70(a)฀ F3:฀ The฀audit฀of฀social,฀ environmental฀and฀integrated฀ reporting฀ 6(d),฀41(c),฀56(a)–(b)฀ 15฀ F4:฀ The฀audit฀of฀performance฀ information฀(pre-determined฀ objectives)฀in฀the฀public฀sector฀ 20(c),฀44(b)–(c),฀48(b)฀ 15฀ F5:฀ Reporting฀on฀other฀assignments฀ 64(b),฀68(c)฀฀ 12,฀13,฀14฀ 12฀ G1:฀Professional฀and฀ethical฀ developments฀ 4(a),฀50(a)฀฀ 1,฀2฀ G2:฀Other฀current฀issues฀ 38(b),฀57(c)฀ 16฀ ฀ viii฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Topic฀index฀ The฀exam฀ Computer-based฀exams฀ With฀ effect฀ from฀ the฀ March฀ 2020฀ sitting,฀ ACCA฀ have฀ commenced฀ the฀ launch฀ of฀ computer-based฀ exams฀ (CBEs)฀ for฀ this฀ exam฀ with฀ the฀ aim฀ of฀ rolling฀ out฀ into฀ all฀ markets฀ internationally฀ over฀ a฀ short฀ period.฀ Paper-based฀ examinations฀ (PBE)฀ will฀ be฀ run฀ in฀ parallel฀ while฀ the฀ CBEs฀ are฀ phased฀ in.฀ BPP฀ materials฀ have฀ been฀ designed฀ to฀ support฀ you,฀ whichever฀ exam฀ option฀ you฀ choose.฀ For฀ more฀ information฀on฀these฀changes฀and฀when฀they฀will฀be฀implemented,฀please฀visit฀the฀ACCA฀website.฀ Approach฀to฀examining฀the฀syllabus฀ If฀ you฀ are฀ preparing฀ to฀ sit฀ AAA฀ you฀ should฀ pay฀ particular฀ attention฀ to฀ the฀ following฀ in฀ order฀ to฀ maximise฀your฀chances฀of฀success.฀The฀following฀is฀taken฀from฀a฀recent฀AAA฀examining฀team's฀report.฀ 'In฀order฀to฀pass฀this฀exam,฀candidates฀are฀required฀to฀apply฀the฀principles฀and฀rules฀from฀their฀ earlier฀studies฀to฀more฀complex฀scenarios฀and฀demonstrate฀their฀ability฀to฀handle฀different฀situations฀ which฀ may฀ arise฀ in฀ audit฀ and฀ related฀ services.฀ In฀ addition,฀ candidates฀ are฀ expected฀ to฀ develop฀ a฀ broader฀ knowledge฀ of฀ audit฀ services฀ and฀ practice฀ management.฀ Candidates฀ should฀ also฀ keep฀abreast฀of฀current฀developments฀and฀challenges฀in฀the฀field฀of฀both฀auditing฀and฀financial฀ reporting฀ to฀ allow฀ them฀ to฀ demonstrate฀ the฀ ability฀ to฀ handle฀ these฀ challenges฀ in฀ the฀ context฀ of฀ auditing฀financial฀statements฀and฀as฀areas฀they฀may฀need฀to฀brief฀clients฀on.฀฀ 'This฀combination฀of฀learned฀knowledge฀and฀its฀application฀to฀complex฀situations฀requires฀ candidates฀to฀be฀able฀to฀go฀beyond฀the฀topics฀as฀covered฀in฀text฀books฀and฀be฀able฀to฀react฀to฀the฀ scenarios฀described฀in฀the฀requirement.฀Study฀through฀question฀practice฀and฀following฀developments฀ in฀ the฀ field฀ through฀ the฀ media,฀ and฀ through฀ IFAC฀ and฀ IAASB฀ will฀ be฀ crucial฀ in฀ taking฀ the฀ learned฀ knowledge฀ from฀ earlier฀ parts฀ of฀ the฀ qualification฀ and฀ converting฀ it฀ into฀ a฀ demonstrable฀ ability฀ to฀ provide฀audit฀and฀advisory฀services฀to฀clients.฀฀ 'AAA฀ also฀ tests฀ candidates'฀ ability฀ to฀ tailor฀ their฀ answer฀ to฀ the฀ context฀ in฀ which฀ the฀ requirement฀is฀written.฀Often฀the฀audience฀of฀the฀requirement฀will฀dictate฀the฀pitch฀and฀depth฀of฀ the฀ answer฀ along฀ with฀ its฀ focus.฀ Failure฀ to฀ take฀ into฀ account฀ such฀ matters฀ will฀ often฀ lead฀ to฀ time฀ pressures฀ in฀ the฀ exam฀ as฀ candidates฀ lose฀ time฀ by฀ detailing฀ knowledge฀ that฀ is฀ not฀ relevant฀ to฀ the฀ requirement.฀ This฀ is฀ particularly฀ noticeable฀ in฀ question฀ 1฀ which฀ is฀ set฀ at฀ the฀ planning฀ stage฀ of฀ an฀ audit฀and฀is฀addressed฀to฀the฀senior฀members฀of฀the฀audit฀team,฀meaning฀an฀explanation฀of฀the฀audit฀ risk฀model฀is฀not฀appropriate.฀Candidates฀should฀allow฀themselves฀time฀to฀focus฀on฀the฀requirement฀ that฀is฀set฀before฀they฀begin฀their฀answers.฀ It฀ would฀ be฀ useful฀ for฀ candidates฀ to฀ visualise฀ delivering฀the฀requirement฀verbally฀to฀the฀report฀recipient฀and฀therefore฀imagining฀ how฀ a฀ partner฀ in฀ a฀ firm,฀ already฀ qualified฀ and฀ experienced,฀ would฀ react฀ to฀ listening฀to฀the฀answer.'฀ Format฀of฀the฀exam฀฀ ฀ ฀ Section฀A:฀ Section฀B:฀ ฀ ฀ One฀compulsory฀question Two฀compulsory฀questions฀(25฀marks฀each)฀ ฀ ฀ Number฀of marks 50 ฀฀฀฀50฀ ฀฀100฀ The฀time฀allowed฀for฀this฀exam฀is฀3฀hours฀and฀15฀minutes.฀ The฀examination฀is฀constructed฀in฀two฀sections.฀Questions฀in฀both฀sections฀will฀be฀largely฀discursive.฀ However,฀candidates฀will฀be฀expected,฀for฀example,฀to฀be฀able฀to฀assess฀materiality฀and฀calculate฀ relevant฀ratios฀where฀appropriate.฀ ฀ ix฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Question฀format฀ The฀format฀of฀questions฀in฀AAA฀is฀slightly฀different฀between฀Section฀A฀and฀Section฀B.฀Section฀A฀questions฀ will฀feature฀scenarios,฀with฀simple฀requirements฀such฀as฀'Respond฀to฀the฀partner's฀request',฀or฀'Draft฀the฀ briefing฀notes฀as฀requested'.฀You฀will฀have฀to฀work฀out฀for฀yourself฀what฀you฀need฀to฀include฀in฀your฀ answer.฀Section฀B฀questions฀will฀feature฀requirements฀akin฀to฀those฀in฀your฀previous฀ACCA฀exams.฀ For฀ sittings฀ from฀ September฀ 2019฀ onwards,฀ all฀ questions฀ are฀ set฀ as฀ at฀ the฀ fictitious฀ date฀ of฀ 1฀July฀20X5.฀ As฀AAA฀is฀a฀Strategic฀Professional฀exam,฀4฀professional฀level฀marks฀will฀be฀awarded.฀Some฀of฀ these฀should฀be฀easy฀to฀obtain.฀The฀examining฀team฀has฀stated฀that฀some฀marks฀may฀be฀available฀for฀ presenting฀your฀answer฀in฀the฀form฀of฀a฀letter,฀presentation,฀email,฀report฀or฀briefing฀notes.฀You฀may฀ also฀be฀able฀to฀obtain฀marks฀for฀the฀style฀and฀layout฀of฀your฀answer.฀ Reports฀ should฀ always฀ have฀ an฀ appropriate฀ title.฀ They฀ should฀ be฀ formally฀ written,฀ with฀ an฀ introductory฀paragraph฀setting฀out฀the฀aims฀of฀the฀report.฀You฀should฀use฀short฀paragraphs฀ and฀appropriate฀headings,฀with฀a฀summary฀of฀findings฀as฀a฀conclusion.฀ Memoranda฀and฀Briefing฀notes฀should฀have฀the฀following฀four฀things฀at฀the฀beginning: From:฀฀ To:฀฀ ฀ Date:฀ Subject:฀ Name฀of฀author฀ Name฀of฀recipient฀ 1฀July฀20X5฀ ………฀ Letters฀should฀be฀addressed฀appropriately฀to฀the฀correct฀person฀and฀be฀dated.฀They฀should฀have฀a฀ short฀introductory฀paragraph,฀a฀conclusion฀and฀should฀be฀in฀a฀formal฀writing฀style.฀Letters฀beginning฀ with฀'Dear฀Sir/Madam'฀should฀end฀with฀'Yours฀faithfully'.฀ ฀ x฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 (c)฀ ฀ Based฀ on฀ these฀ reviews฀ and฀ discussions,฀ a฀ recalculation฀ by฀ the฀ auditor฀ of฀ the฀ finance฀ cost฀ and฀ confirmation฀ that฀ the฀ finance฀ cost฀ and฀ the฀ receipt฀ of฀ the฀ loan฀ have฀ been฀ accurately฀reflected฀in฀the฀cash฀flow฀forecast฀ ฀ Working฀ paper฀ detailing฀ the฀ review฀ of฀ the฀ documentation฀ in฀ relation฀ to฀ the฀ new฀ warehousing฀ agreeing฀ the฀ cost฀ and฀ checking฀ that฀ the฀ cash฀ outflow฀ is฀ included฀ in฀ the฀ forecast฀at฀the฀correct฀amount฀and฀at฀the฀correct฀date฀ ฀ A฀review฀of฀board฀minutes฀in฀relation฀to฀the฀company's฀current฀trading฀position฀and฀the฀ ongoing฀negotiations฀for฀the฀proposed฀new฀bank฀finance฀ ฀ A฀ consideration฀ of฀ the฀ impact฀ on฀ cash฀ flows฀ and฀ liquidity฀ when฀ the฀ company฀ is฀ incurring฀the฀additional฀costs฀of฀compliance฀with฀all฀laws฀and฀regulations฀ Reasons฀for฀non-disclosure฀and฀implications฀for฀the฀auditor's฀report฀ Motives฀for฀directors฀not฀wishing฀to฀make฀going฀concern฀disclosures฀ The฀ directors'฀ motives฀ for฀ non-disclosure฀ of฀ uncertainties฀ in฀ relation฀ to฀ going฀ concern฀ seem฀ likely฀to฀reflect฀a฀desire฀to฀present฀the฀company฀in฀a฀positive฀light฀to฀investors฀and฀other฀third฀ parties.฀This฀is฀a฀particularly฀sensitive฀issue฀at฀a฀time฀when฀the฀company฀is฀planning฀a฀major฀ expansion฀ and฀ is฀ seeking฀ to฀ raise฀ significant฀ new฀ finance฀ while฀ struggling฀ to฀ manage฀ its฀ liquidity฀and฀working฀capital.฀ The฀ disclosure฀ of฀ uncertainties฀ in฀ relation฀ to฀ going฀ concern฀ may฀ well฀ deter฀ the฀ bank฀ from฀ lending฀ the฀ new฀ finance฀ and฀ may฀ lead฀ to฀ a฀ loss฀ of฀ confidence฀ and฀ goodwill฀ with฀ key฀ suppliers฀and฀customers.฀Operational฀difficulties฀with฀suppliers฀and฀customers฀may฀prove฀to฀be฀ particularly฀problematic฀with฀the฀arrival฀of฀the฀major฀new฀competitor฀in฀Daley฀Co's฀market฀in฀ October฀20X8.฀ Implications฀for฀the฀auditor's฀report฀ ISA฀705฀Modifications฀to฀the฀Opinion฀in฀the฀Independent฀Auditor's฀Report฀requires฀the฀auditor฀ to฀ modify฀ the฀ opinion฀ in฀ the฀ auditor's฀ report฀ when฀ they฀ conclude฀ that,฀ based฀ on฀ the฀ audit฀ evidence฀ obtained,฀ the฀ financial฀ statements฀ as฀ a฀ whole฀ are฀ not฀ free฀ from฀ material฀ misstatement.฀ The฀ failure฀ to฀ include฀ disclosures฀ regarding฀ material฀ uncertainties฀ in฀ relation฀ to฀ going฀ concern฀ in฀ Daley฀ Co's฀ financial฀ statements฀ represents฀ a฀ material฀ omission฀ which฀ will฀ therefore฀require฀a฀modification฀of฀the฀auditor's฀opinion.฀In฀this฀case,฀the฀auditor฀must฀exercise฀ professional฀ judgement฀ and฀ assess฀ whether฀ the฀ absence฀ of฀ this฀ disclosure฀ is฀ material฀ but฀ not฀ pervasive฀ to฀ the฀ financial฀ statements฀ or฀ whether฀ it฀ is฀ material฀ and฀ pervasive฀ to฀ the฀ financial฀ statements.฀ Material฀but฀not฀pervasive฀ If฀ the฀ auditor฀ concludes฀ that฀ the฀ omission฀ of฀ the฀ required฀ disclosures฀ in฀ relation฀ to฀ the฀ going฀ concern฀uncertainties฀is฀material฀but฀not฀pervasive฀to฀the฀financial฀statements,฀a฀qualified฀audit฀ opinion฀on฀the฀grounds฀of฀material฀misstatement฀is฀appropriate,฀as฀the฀directors฀have฀failed฀to฀ include฀required฀disclosures.฀The฀auditor฀will฀include฀a฀'Qualified฀Opinion'฀paragraph฀at฀the฀ start฀of฀the฀auditor's฀report฀which฀will฀state฀that฀the฀financial฀statements฀are฀presented฀fairly฀in฀ all฀ material฀ respects฀ 'except฀ for'฀ the฀ absence฀ of฀ this฀ disclosure.฀ The฀ qualified฀ opinion฀ paragraph฀will฀be฀followed฀immediately฀by฀a฀'Basis฀for฀Qualified฀Opinion'฀paragraph฀which฀ will฀give฀details฀of฀the฀going฀concern฀uncertainties฀in฀relation฀to฀Daley฀Co฀and฀explain฀that฀the฀ financial฀statements฀do฀not฀adequately฀disclose฀these฀uncertainties.฀ Material฀and฀pervasive฀ If฀ the฀ auditor฀ concludes฀ that฀ the฀ omission฀ of฀ the฀ required฀ disclosures฀ in฀ relation฀ to฀ the฀ going฀ concern฀ uncertainties฀ is฀ material฀ and฀ pervasive฀ to฀ the฀ financial฀ statements,฀ an฀ adverse฀ qualified฀ audit฀ opinion฀ on฀ the฀ grounds฀ of฀ material฀ misstatement฀ is฀ appropriate฀ as฀ in฀ the฀ auditor's฀ opinion฀ the฀ lack฀ of฀ these฀ disclosures฀ will฀ have฀ a฀ fundamental฀ impact฀ on฀ the฀ users'฀ understanding฀ of฀ the฀ financial฀ statements.฀ The฀ auditor฀ will฀ include฀ an฀ 'Adverse฀ Opinion'฀ 664฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Mock฀exam฀4:฀answers฀ paragraph฀at฀the฀start฀of฀the฀auditor's฀report฀which฀will฀state฀that฀the฀financial฀statements฀are฀ not฀presented฀fairly฀in฀all฀material฀respects.฀The฀adverse฀opinion฀paragraph฀will฀be฀followed฀ immediately฀by฀a฀'Basis฀for฀Adverse฀Opinion'฀paragraph฀which฀will฀give฀details฀of฀the฀going฀ concern฀uncertainties฀in฀relation฀to฀Daley฀Co฀and฀explain฀that฀in฀the฀opinion฀of฀the฀auditor,฀the฀ omission฀ of฀ key฀ disclosures฀ in฀ this฀ respect฀ arefundamental฀ and฀ pervasive฀ to฀ the฀ financial฀ statements฀and฀therefore฀require฀an฀adverse฀opinion.฀ Tutorial฀note.฀Key฀audit฀matters฀(KAM)฀disclosures฀are฀not฀relevant฀for฀Daley฀Co฀as฀a฀result฀ of฀its฀unlisted฀status.฀ Question฀3฀฀ Workbook฀references.฀Chapters฀1฀and฀2.฀ Top฀tips.฀Part฀(a)฀covered฀money฀laundering.฀This฀is฀another฀topical฀area,฀and฀one฀that฀is฀required฀ to฀be฀on฀the฀AAA฀syllabus.฀Part฀(a)(i)฀is฀straight฀knowledge,฀so฀you฀should฀be฀looking฀to฀score฀at฀ least฀three฀marks฀(but฀of฀course฀knowledge฀is฀a฀double-edged฀sword฀–฀if฀you฀don't฀know฀the฀material฀ then฀you฀are฀in฀a฀difficult฀position).฀฀ Part฀(a)(ii)฀is฀trying฀to฀get฀you฀to฀think฀about฀how฀money฀laundering฀might฀appear฀in฀the฀real฀world,฀ although฀the฀fact฀that฀you฀are฀told฀in฀the฀requirement฀that฀there฀may฀be฀indicators฀of฀money฀ laundering฀makes฀it฀easier฀to฀pick฀them฀up฀post฀hoc.฀ Part฀(b)฀was฀the฀second฀appearance฀of฀ethics฀in฀this฀exam,฀and฀should฀again฀have฀been฀reasonable฀ if฀you฀had฀been฀familiar฀with฀the฀material฀from฀Chapter฀2฀of฀the฀Workbook.฀ Easy฀marks.฀The฀marks฀for฀stating฀anti-money฀laundering฀policies,฀in฀part฀(a)(i),฀were฀among฀the฀ easiest฀on฀the฀paper.฀ ฀ Marking฀scheme฀ ฀ ฀ (a)฀ Marks฀ Money฀laundering฀ (i)฀ ฀ Reporting฀duties฀and฀procedures:฀ ฀ Audit฀firm฀should฀have฀established฀internal฀reporting฀lines฀ which฀should฀be฀followed฀to฀report฀any฀suspicions฀ ฀ Any฀individual฀in฀audit฀firm฀who฀has฀suspicions฀of฀money฀ laundering฀activities฀must฀disclose฀them฀to฀MLRO;฀฀ non-disclosure/failure฀to฀report฀constitutes฀an฀offence฀ ฀ ฀ Suspicions฀should฀be฀reported฀to฀nominated฀person฀ within฀audit฀firm฀(MLRO);฀MLRO฀should฀possess฀suitable฀ level฀of฀experience/seniority฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ MLRO฀must฀consider฀all฀circumstances,฀document฀the฀ process฀and฀decide฀whether฀to฀report฀to฀appropriate฀ authorities;฀legal฀duty฀to฀report฀even฀though฀this฀may฀ conflict฀with฀auditor's฀duty฀of฀confidentiality฀ ฀ Maximum฀ ฀ ฀ 665฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ ฀ Marks฀ (ii)฀ Generally฀up฀to฀2฀marks฀for฀each฀well-explained฀ point฀of฀explanation,฀for฀example:฀ ฀ ฀ ฀ Cash-intensive฀business:฀ ฀ ฀ ฀ High฀level฀of฀cash฀sales฀and฀high฀volume฀of฀individual฀ sales฀reports;฀risk฀illicit฀cash฀funds฀are฀being฀passed฀off฀ as฀legitimate฀sales฀ ฀ ฀ ฀ Mr฀Blackers'฀sale฀to฀business฀associate฀for฀$33,000฀may฀ be฀example฀of฀placement฀of฀illegal฀funds฀in฀order฀to฀ legitimise฀them฀as฀genuine฀sales฀ ฀ ฀ International฀property฀transactions:฀ ฀ ฀ ฀ May฀be฀example฀of฀real฀estate฀laundering฀by฀฀ Mr฀Blackers฀in฀his฀personal฀affairs;฀may฀be฀purchasing฀ international฀property฀with฀illegal฀funds฀(placement)฀and฀ then฀selling฀them฀in฀order฀to฀make฀funds฀appear฀ legitimate฀(integration)฀ ฀ High฀volume฀of฀transactions฀and฀off-shore฀bank฀accounts฀ in฀Mr฀Blackers'฀name฀may฀be฀indicative฀of฀layering฀of฀ transactions฀in฀attempt฀to฀make฀original฀source฀of฀funds฀ difficult฀to฀trace฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ (b)฀ Maximum฀ Ethical฀and฀professional฀issues฀ Generally฀1฀mark฀for฀each฀point฀identified฀and฀explained.฀ Taxation฀services฀ ฀ Company฀tax฀computation฀is฀self-review฀threat฀as฀tax฀ calculation฀forms฀basis฀of฀tax฀payable฀and฀tax฀charge฀in฀ financial฀statements฀ ฀ Advocacy฀threat฀re฀acting฀on฀client's฀behalf฀with฀tax฀authorities฀ ฀ Per฀IESBA฀Code,฀completing฀tax฀returns฀does฀not฀generally฀ create฀threat฀to฀independence฀if฀management฀takes฀ responsibility฀for฀returns฀including฀any฀judgements฀made฀ ฀ Tax฀calculations฀for฀purpose฀of฀preparing฀accounting฀entries฀–฀ may฀be฀acceptable฀for฀unlisted฀audit฀client;฀firm฀should฀consider฀ safeguards,฀eg฀using฀professionals฀not฀members฀of฀audit฀team฀ or฀independent฀senior/partner฀review฀ ฀ Preparation฀of฀Mr฀Blackers'฀personal฀tax฀return฀may฀be฀taxable฀ benefit฀which฀should฀be฀included฀in฀tax฀return฀and฀fee฀should฀ be฀reflected฀in฀his฀director's฀loan฀account฀with฀the฀company฀ ฀฀฀฀฀Preparation฀of฀personal฀tax฀return฀may฀result฀in฀auditor฀being฀ associated฀with฀criminal฀activities฀(ie฀money฀laundering฀as฀ above)฀ Website฀and฀online฀sales฀system฀ ฀฀฀฀฀฀ Self-review฀threat฀as฀auditor฀will฀audit฀sales฀figures฀generated฀ by฀system฀ 666฀ Downloaded by Anil Kumar (ak324h7@gmail.com) 6฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ lOMoARcPSD|4453900 Mock฀exam฀4:฀answers฀ ฀ Marks฀ ฀ New฀system฀appears฀to฀be฀significant฀to฀client's฀financial฀ statements฀and฀records฀ ฀ Risk฀assume฀management฀responsibility฀relating฀to฀design฀of฀ system฀and฀controls฀ ฀ Threat฀may฀be฀too฀significant฀even฀for฀unlisted฀client฀unless฀ appropriate฀safeguards฀put฀in฀place฀ ฀ Examples฀of฀possible฀safeguards฀include:฀client฀acknowledges฀ responsibility฀for฀establishing฀and฀monitoring฀system฀of฀internal฀ controls;฀client฀makes฀all฀management฀decisions฀re฀design฀and฀ implementation฀process;฀client฀is฀responsible฀for฀operating฀ system฀and฀data฀it฀generates;฀separate฀team฀made฀up฀of฀฀ non-audit฀staff฀performs฀work฀with฀independent฀professional฀ review฀(max฀2฀marks฀for฀safeguards)฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ Office฀party฀ ฀ ฀ Gifts฀may฀create฀self-interest฀risk฀as฀audit฀staff฀receiving฀direct฀ financial฀benefit฀from฀client฀ ฀ Unless฀value฀is฀trivial฀and฀inconsequential,฀threats฀would฀be฀too฀ significant฀to฀mitigate฀with฀safeguards฀and฀should฀not฀be฀ accepted฀ ฀ Auditor฀should฀have฀internal฀authorisation฀procedures฀to฀ establish฀whether฀value฀is฀trivial฀and฀inconsequential฀ ฀ In฀this฀case,฀value฀appears฀trivial฀but฀auditor฀should฀consider฀ declining฀given฀possible฀criminal฀activities฀by฀client฀staff฀ ฀ Total฀ (a)฀ ฀ Client฀hospitality฀(attendance฀at฀party)฀may฀create฀familiarity฀ risks฀as฀audit฀staff฀may฀be฀getting฀too฀close฀to฀client฀especially฀ given฀that฀this฀happens฀every฀year฀ ฀ Maximum฀ ฀ ฀15 ฀25฀ Money฀laundering฀ (i)฀ Policies฀and฀procedures฀for฀anti-money฀laundering฀programme฀ Thomasson฀&฀Co฀should฀have฀established฀an฀anti-money฀laundering฀programme฀within฀ the฀ firm.฀ As฀ part฀ of฀ this฀ programme,฀ the฀ firm฀ should฀ have฀ appointed฀ a฀ money฀ laundering฀ reporting฀ officer฀ (MLRO)฀ with฀ an฀ appropriate฀ level฀ of฀ experience฀ and฀ seniority.฀ The฀ audit฀ firm฀ should฀ also฀ have฀ established฀ ฀ internal฀ reporting฀ lines฀ which฀ should฀ be฀ followed฀ to฀ report฀ any฀ suspicions.฀ Thomasson฀ &฀ Co฀ will฀ probably฀ have฀ a฀ standard฀ form฀ which฀ should฀ be฀ used฀ to฀ report฀ suspicions฀ of฀ money฀ laundering฀ to฀ the฀ MLRO.฀ The฀typical฀content฀of฀an฀internal฀report฀on฀suspected฀money฀laundering฀may฀include฀the฀ name฀ of฀ the฀ suspect,฀ the฀ amounts฀ potentially฀ involved,฀ and฀ the฀ reasons฀ for฀ the฀ suspicions฀with฀supporting฀evidence฀if฀possible,฀and฀the฀whereabouts฀of฀the฀laundered฀ cash.฀ The฀ firm's฀ internal฀ policies฀ should฀ have฀ been฀ set฀ up฀ to฀ ensure฀ that฀ all฀ pertinent฀ information฀is฀captured฀in฀this฀standardised฀report.฀ ฀ 667฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Any฀ individual฀ in฀ the฀ audit฀ firm฀ who฀ has฀ suspicions฀ of฀ money฀ laundering฀ activities฀ is฀ then฀required฀to฀disclose฀these฀suspicions฀to฀the฀MLRO.฀The฀report฀must฀be฀done฀as฀soon฀ as฀possible฀as฀any฀non-disclosure฀or฀failure฀to฀report฀such฀suspicions฀will฀constitute฀an฀ offence฀under฀the฀money฀laundering฀regulations.฀ On฀ receipt฀ of฀ the฀ internal฀ report,฀ the฀ MLRO฀ must฀ consider฀ all฀ of฀ the฀ circumstances฀ surrounding฀ the฀ ฀ suspicions฀ of฀ money฀ laundering฀ activities,฀ document฀ this฀ process฀ and฀ decide฀whether฀to฀report฀the฀suspicions฀to฀the฀appropriate฀external฀authorities.฀The฀audit฀ firm฀has฀a฀legal฀duty฀to฀report฀even฀though฀this฀may฀conflict฀with฀the฀auditor's฀duty฀of฀ confidentiality.฀ Tutorial฀note.฀Credit฀will฀be฀awarded฀for฀other฀relevant฀answer฀points฀in฀relation฀to฀a฀ firm's฀anti-money฀laundering฀programme.฀ (ii)฀ Evaluation฀of฀possible฀indicators฀of฀money฀laundering฀activities฀ Money฀laundering฀is฀the฀process฀by฀which฀criminals฀attempt฀to฀conceal฀the฀true฀origin฀ and฀ ownership฀ of฀ the฀ proceeds฀ of฀ criminal฀ activity,฀ allowing฀ them฀ to฀ maintain฀ control฀ over฀ the฀ proceeds,฀ and฀ ultimately฀ providing฀ a฀ legitimate฀ cover฀ for฀ their฀ sources฀ of฀ income.฀ In฀ the฀ case฀ of฀ Clean฀ Co,฀ the฀ circumstances฀ which฀ may฀ be฀ indicative฀ of฀ money฀ laundering฀activities฀include฀the฀following:฀ Cash-intensive฀business฀ Clean฀Co฀has฀a฀high฀level฀of฀cash-based฀sales฀(75%)฀and฀a฀high฀volume฀of฀individual฀ sales฀reports.฀The฀nature฀of฀its฀business฀therefore฀creates฀a฀significant฀risk฀that฀illicit฀cash฀ funds฀are฀being฀passed฀off฀as฀legitimate฀sales.฀More฀specifically฀Mr฀Blackers'฀sale฀to฀a฀ business฀associate฀for฀$33,000฀may฀be฀an฀example฀of฀the฀placement฀of฀illegal฀funds฀in฀ order฀ to฀ legitimise฀ them฀ as฀ genuine฀ sales.฀ The฀ size฀ of฀ the฀ transaction฀ in฀ a฀ business฀ selling฀ cleaning฀ products฀ and฀ the฀ round฀ sum฀ amount฀ may฀ be฀ additional฀ grounds฀ for฀ suspicion฀in฀relation฀to฀this฀transaction.฀ International฀property฀transactions฀ The฀ performance฀ of฀ Mr฀ Blackers'฀ personal฀ taxation฀ computation฀ has฀ identified฀ a฀ significant฀ number฀ of฀ transactions฀ involving฀ the฀ purchase฀ and฀ sale฀ of฀ properties฀ in฀ international฀locations.฀These฀transactions฀may฀be฀examples฀of฀real฀estate฀laundering฀by฀ Mr฀ Blackers฀ in฀ his฀ personal฀ affairs.฀ It฀ is฀ possible฀ that฀ he฀ may฀ be฀ purchasing฀ these฀ properties฀with฀illegal฀funds฀('placement')฀and฀then฀selling฀them฀in฀order฀to฀make฀funds฀ appear฀ legitimate฀ ('integration').฀ A฀ high฀ volume฀ of฀ such฀ transactions฀ may฀ also฀ be฀ indicative฀of฀the฀'layering'฀of฀transactions฀in฀an฀attempt฀to฀make฀the฀original฀source฀of฀ the฀funds฀more฀difficult฀to฀trace.฀ (b)฀ Ethical฀and฀professional฀issues฀ Taxation฀services฀ Company฀tax฀computation฀ The฀ performance฀ of฀ the฀ company฀ tax฀ computation฀ creates฀ a฀ self-review฀ threat.฀ A฀ self-review฀ threat฀arises฀when฀an฀auditor฀reviews฀work฀which฀they฀themselves฀have฀previously฀performed฀ –฀ for฀ example,฀ if฀ the฀ external฀ auditor฀ is฀ involved฀ in฀ the฀ process฀ of฀ preparing฀ the฀ financial฀ statements฀ and฀ then฀ audits฀ them.฀ As฀ a฀ result,฀ there฀ is฀ a฀ risk฀ that฀ the฀ auditor฀ will฀ not฀ be฀ sufficiently฀objective฀in฀performing฀the฀audit฀and฀may฀fail฀to฀identify฀any฀shortcomings฀in฀their฀ own฀work.฀In฀this฀case฀therefore,฀a฀self-review฀threat฀to฀auditor฀independence฀arises฀because฀ the฀ tax฀ calculation฀ forms฀ the฀ basis฀ of฀ the฀ tax฀ payable฀ and฀ the฀ tax฀ charge฀ in฀ the฀ financial฀ statements฀ and฀ as฀ such฀ the฀ audit฀ team฀ may฀ be฀ more฀ likely฀ to฀ accept฀ the฀ tax฀ calculations฀ without฀adequate฀testing.฀There฀is฀also฀a฀potential฀advocacy฀threat.฀An฀advocacy฀threat฀arises฀ 668฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Mock฀exam฀4:฀answers฀ when฀ the฀ auditor฀ is฀ asked฀ to฀ promote฀ or฀ represent฀ their฀ client฀ in฀ some฀ way.฀ In฀ this฀ situation,฀ there฀is฀a฀risk฀of฀the฀auditor฀being฀seen฀to฀promote฀the฀interests฀of฀Clean฀Co฀with฀a฀third฀party฀ such฀as฀the฀tax฀authorities฀and฀therefore฀that฀the฀auditor฀will฀be฀biased฀in฀favour฀of฀the฀client฀ and฀cannot฀be฀fully฀objective.฀ According฀ to฀ the฀ IESBA฀ Code฀ of฀ Ethics฀ for฀ Professional฀ Accountants฀ (the฀ Code),฀ however,฀ completing฀ tax฀ returns฀ does฀ not฀ generally฀ create฀ a฀ threat฀ to฀ independence฀ provided฀ management฀ takes฀ responsibility฀ for฀ the฀ returns฀ including฀ any฀ judgements฀ which฀ have฀ been฀ made.฀ Where฀ tax฀ calculations฀ have฀ been฀ prepared฀ by฀ the฀ auditor฀ for฀ the฀ purpose฀ of฀ preparing฀accounting฀entries,฀the฀Code฀states฀that฀this฀may฀be฀acceptable฀for฀an฀unlisted฀audit฀ client฀ and฀ that฀ the฀ firm฀ should฀ consider฀ implementing฀ safeguards฀ in฀ order฀ to฀ reduce฀ the฀ selfreview฀ threat฀ to฀ an฀ acceptable฀ level.฀ In฀ this฀ case,฀ these฀ safeguards฀ might฀ have฀ included,฀ for฀ example,฀ using฀ professionals฀ who฀ are฀ not฀ members฀ of฀ the฀ audit฀ team฀ to฀ prepare฀ the฀ tax฀ computations฀together฀with฀independent฀senior฀or฀partner฀review฀of฀the฀work.฀Therefore,฀given฀ that฀Clean฀Co฀is฀an฀unlisted฀client,฀Thomasson฀&฀Co฀should฀ascertain฀which฀members฀of฀staff฀ performed฀ the฀ taxation฀ services฀ and฀ should฀ review฀ whether฀ the฀ threat฀ to฀ independence฀ has฀ been฀adequately฀assessed฀before฀the฀taxation฀services฀were฀performed฀and฀whether฀adequate฀ safeguards฀have฀been฀applied.฀ Mr฀Blackers'฀personal฀tax฀computation฀ From฀an฀ethical฀perspective,฀there฀is฀no฀prohibition฀in฀the฀Code฀on฀the฀preparation฀of฀personal฀ tax฀ returns฀ for฀ the฀ directors฀ of฀ an฀ audit฀ client฀ such฀ as฀ Clean฀ Co.฀ However,฀ in฀ this฀ case฀ the฀ auditor฀should฀consider฀whether฀the฀preparation฀of฀Mr฀Blackers'฀personal฀tax฀return฀may฀result฀ in฀ the฀ auditor฀ being฀ associated฀ with฀ criminal฀ activities฀ if฀ the฀ suspicions฀ of฀ money฀ laundering฀ activities฀noted฀above฀prove฀to฀be฀well฀founded.฀ The฀auditor฀should฀also฀consider฀the฀appropriateness฀of฀personal฀taxation฀services฀being฀billed฀ to฀the฀company.฀Indeed,฀the฀preparation฀of฀Mr฀Blackers'฀personal฀tax฀return฀may฀be฀a฀taxable฀ benefit฀which฀should฀be฀included฀in฀his฀tax฀return฀and฀the฀fee฀for฀this฀service฀may฀need฀to฀be฀ reflected฀in฀his฀director's฀loan฀account฀with฀the฀company.฀ Website฀and฀online฀sales฀system฀ According฀ to฀ the฀ Code,฀ providing฀ services฀ to฀ an฀ audit฀ client฀ involving฀ the฀ design฀ or฀ implementation฀of฀IT฀systems฀which฀form฀a฀significant฀part฀of฀the฀internal฀control฀over฀financial฀ reporting฀ or฀ generate฀ information฀ which฀ is฀ significant฀ to฀ the฀ accounting฀ records฀ or฀ financial฀ statements฀ on฀ which฀ the฀ firm฀ will฀ express฀ an฀ opinion฀ constitutes฀ a฀ self-review฀ threat.฀ A฀฀ self-review฀threat฀arises฀when฀an฀auditor฀reviews฀work฀which฀they฀themselves฀have฀previously฀ performed฀ –฀ for฀ example,฀ if฀ the฀ external฀ auditor฀ is฀ involved฀ in฀ the฀ process฀ of฀ preparing฀ the฀ financial฀statements฀and฀then฀audits฀them.฀As฀a฀result,฀there฀is฀a฀risk฀that฀the฀auditor฀will฀not฀be฀ sufficiently฀objective฀in฀performing฀the฀audit฀and฀may฀fail฀to฀identify฀any฀shortcomings฀in฀their฀ own฀ work.฀ In฀ this฀ case,฀ the฀ self-review฀ threat฀ arises฀ as฀ the฀ new฀ systems฀ will฀ produce฀ data฀ which฀will฀be฀used฀directly฀in฀the฀preparation฀of฀the฀financial฀statements.฀The฀audit฀process฀will฀ therefore฀include฀reviewing฀and฀testing฀of฀financial฀data฀and฀systems฀which฀Thomasson฀&฀Co฀ has฀helped฀to฀design฀and฀implement.฀As฀a฀result,฀there฀is฀a฀clear฀risk฀that฀the฀audit฀team฀may฀ too฀readily฀place฀reliance฀on฀these฀systems.฀ With฀reference฀to฀Clean฀Co฀therefore,฀it฀is฀clear฀that฀providing฀assistance฀with฀the฀design฀and฀ implementation฀of฀the฀website฀and฀online฀sales฀system฀will฀constitute฀a฀self-review฀threat฀as฀the฀ auditor฀will฀audit฀sales฀figures฀which฀are฀generated฀by฀the฀system฀and฀there฀is฀also฀a฀risk฀that฀ the฀ firm฀ may฀ assume฀ a฀ management฀ responsibility฀ if฀ they฀ become฀ involved฀ in฀ making฀ management฀ decisions.฀ In฀ the฀ case฀ of฀ revenue,฀ this฀ self-review฀ threat฀ may฀ be฀ heightened฀ further฀ by฀ the฀ auditor's฀ reliance฀ on฀ controls฀ testing฀ and฀ on฀ analytical฀ review฀ of฀ the฀ data฀ summaries฀generated฀by฀the฀new฀system.฀It฀also฀seems฀clear฀that฀the฀new฀online฀sales฀system฀ will฀be฀significant฀to฀the฀client's฀financial฀statements฀and฀records.฀The฀Code฀states฀that฀such฀a฀ self-review฀ threat฀ may฀ be฀ too฀ significant฀ even฀ for฀ an฀ unlisted฀ client฀ such฀ as฀ Clean฀ Co฀ unless฀ ฀ 669฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 appropriate฀safeguards฀are฀put฀in฀place.฀Examples฀of฀possible฀safeguards฀which฀might฀assist฀ in฀managing฀the฀self-review฀threat฀include฀the฀following:฀ ฀ The฀ client฀ should฀ acknowledge฀ its฀ responsibility฀ for฀ establishing฀ and฀ monitoring฀ the฀ system฀of฀internal฀controls฀and฀for฀the฀operating฀system฀and฀data฀it฀generates;฀ ฀ The฀respective฀responsibilities฀of฀the฀audit฀firm฀and฀the฀client฀should฀be฀clearly฀defined฀ in฀a฀separate฀engagement฀letter฀in฀order฀to฀ensure฀that฀the฀client฀makes฀all฀management฀ decisions฀in฀relation฀to฀the฀design฀and฀implementation฀process;฀ ฀ Thomasson฀&฀Co฀should฀use฀a฀separate฀team฀made฀up฀of฀non-audit฀staff฀to฀perform฀the฀ systems฀ design฀ and฀ implementation฀ assignment฀ and฀ the฀ work฀ performed฀ by฀ this฀ team฀ should฀be฀subject฀to฀independent฀professional฀review.฀ If฀the฀self-review฀threat฀cannot฀be฀reduced฀to฀an฀acceptable฀level,฀or฀the฀engagement฀will฀result฀฀ in฀the฀firm฀assuming฀a฀management฀responsibility,฀the฀service฀should฀not฀be฀provided.฀ Office฀party฀ The฀ Code฀ states฀ that฀ client฀ hospitality฀ (in฀ this฀ case฀ the฀ attendance฀ at฀ the฀ office฀ party฀ by฀ the฀ audit฀team)฀may฀create฀a฀familiarity฀threat.฀A฀familiarity฀threat฀occurs฀when฀the฀auditor฀is฀too฀ sympathetic฀or฀trusting฀of฀the฀client฀because฀of฀a฀close฀relationship฀with฀them.฀There฀is฀a฀risk฀ therefore฀that฀as฀a฀result฀of฀attending฀the฀client฀office฀party,฀the฀audit฀staff฀may฀be฀getting฀too฀ close฀ to฀ the฀ client฀ staff฀ especially฀ given฀ that฀ according฀ to฀ the฀ audit฀ senior,฀ this฀ practice฀ has฀ occurred฀ every฀ year.฀ This฀ close฀ relationship฀ may฀ result฀ in฀ the฀ audit฀ team฀ becoming฀ less฀ objective฀and฀less฀able฀to฀challenge฀explanations฀provided฀by฀the฀client.฀ The฀Code฀also฀states฀that฀gifts฀from฀a฀client฀to฀a฀member฀of฀the฀audit฀team฀may฀create฀a฀selfinterest฀threat.฀A฀self-interest฀threat฀arises฀when฀the฀auditor฀derives฀a฀potential฀personal฀benefit฀ from฀ an฀ audit฀ client฀ which฀ may฀ motivate฀ them฀ to฀ behave฀ in฀ a฀ manner฀ which฀ aims฀ to฀ protect฀ that฀benefit.฀With฀reference฀to฀the฀office฀party฀therefore,฀the฀audit฀staff฀are฀receiving฀a฀direct฀ financial฀benefit฀from฀the฀client฀(in฀this฀case฀in฀the฀form฀of฀vouchers).฀Unless฀the฀value฀of฀such฀ gifts฀ is฀ trivial฀ and฀ inconsequential,฀ the฀ self-interest฀ threat฀ would฀ be฀ too฀ significant฀ to฀ mitigate฀ with฀ safeguards฀ and฀ the฀ gifts฀ should฀ not฀ be฀ accepted.฀ The฀ audit฀ firm฀ should฀ consider฀ introducing฀internal฀authorisation฀procedures฀in฀order฀to฀ensure฀transparency฀and฀to฀establish฀ whether฀the฀value฀is฀trivial฀and฀inconsequential.฀In฀this฀case,฀the฀value฀of฀$30฀per฀head฀does฀ appear฀to฀be฀trivial฀but฀the฀auditor฀might฀still฀consider฀declining฀the฀gifts฀in฀order฀to฀maintain฀a฀ visible฀professional฀distance฀from฀a฀client฀which฀may฀be฀involved฀in฀criminal฀activities.฀ 670฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ ฀ ฀ Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ ฀ ฀ Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 ฀ ฀ ฀ ฀ Notes฀ Downloaded by Anil Kumar (ak324h7@gmail.com) lOMoARcPSD|4453900 Review฀Form฀–฀AAA฀(INT)฀Advanced฀Audit฀and฀Assurance฀(International)฀ (02/19)฀ Name:฀฀ ฀ Address:฀฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ How฀have฀you฀used฀this฀Kit?฀ (Tick฀one฀box฀only)฀ ฀ Home฀study฀(book฀only)฀ ฀ On฀a฀course:฀college฀ ฀ With฀‘correspondence’฀package฀ ฀ Other฀฀ During฀the฀past฀six฀months฀do฀you฀recall฀ seeing/receiving฀any฀of฀the฀following?฀ (Tick฀as฀many฀boxes฀as฀are฀relevant)฀ ฀ ฀ Why฀did฀you฀decide฀to฀purchase฀this฀Kit?฀฀฀ (Tick฀one฀box฀only)฀ ฀ Our฀advertisement฀in฀Student฀Accountant฀ ฀ Our฀advertisement฀in฀Pass฀ ฀ Our฀advertisement฀in฀PQ฀ ฀ Our฀brochure฀with฀a฀letter฀through฀the฀post฀ ฀ Our฀website฀www.bpp.com฀ Which฀(if฀any)฀aspects฀of฀our฀advertising฀ do฀you฀find฀useful?฀ (Tick฀as฀many฀boxes฀as฀are฀relevant)฀ ฀ Have฀used฀the฀complementary฀Workbook฀ ฀ Have฀used฀other฀BPP฀products฀in฀the฀past฀ ฀ Recommendation฀by฀friend/colleague฀ ฀ Prices฀and฀publication฀dates฀of฀new฀editions฀ ฀ Recommendation฀by฀a฀lecturer฀at฀college฀ ฀ Information฀on฀product฀content฀ ฀ Saw฀advertising฀ ฀ Facility฀to฀order฀books฀฀ ฀ Other฀฀ ฀ ฀ None฀of฀the฀above฀ ฀ ฀ Which฀BPP฀products฀have฀you฀used?฀ Workbook฀ ฀฀฀฀฀฀฀฀฀ ฀ Other฀ Kit฀฀฀฀ ฀฀฀฀฀฀฀฀฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ Your฀ratings,฀comments฀and฀suggestions฀would฀be฀appreciated฀on฀the฀following฀areas.฀ ฀ Passing฀AAA฀ Very฀useful Useful฀ Not฀useful Questions฀ ฀ ฀ Top฀Tips฀etc฀in฀answers฀ ฀ Content฀and฀structure฀of฀answers฀ ฀ Mock฀exam฀answers฀ ฀ Overall฀opinion฀of฀this฀Kit฀ ฀ ฀ Excellent฀฀ ฀ Good฀฀ ฀ ฀ Adequate฀฀ ฀ ฀ Poor฀฀ ฀ ฀ Do฀you฀intend฀to฀continue฀using฀BPP฀ Yes฀฀ ฀ No฀฀ ฀ products?฀ ฀ The฀BPP฀author฀of฀this฀edition฀can฀be฀emailed฀at:฀learningmedia@bpp.com฀ ฀ Downloaded by Anil Kumar (ak324h7@gmail.com) ฀ lOMoARcPSD|4453900 Review฀Form฀(continued)฀ TELL฀US฀WHAT฀YOU฀THINK฀ Please฀note฀any฀further฀comments฀and฀suggestions/errors฀below.฀ Downloaded by Anil Kumar (ak324h7@gmail.com) ... There฀are฀three฀areas฀you฀should฀develop฀in฀order฀to฀achieve฀exam฀success฀in? ?Advanced? ? ?Audit? ? ?and? ?? Assurance? ??(AAA).฀These฀are:฀ (1)฀ (2)฀ (3)฀ Knowledge฀application฀ Specific? ?Advanced? ? ?Audit? ? ?and? ? ?Assurance? ??skills฀ Exam฀success฀skills At฀ the฀ revision? ?? and? ?? final฀... examinable฀documents฀list.฀ Accounting฀Standards฀ Advanced? ? ?Audit? ? ?and? ? ?Assurance? ??(AAA)฀ The฀ accounting฀ knowledge฀ that฀ is฀ assumed฀ for฀ Advanced? ?? Audit? ?? and? ?? Assurance? ?? is฀ the฀ same฀ as฀ that฀... may฀ arise฀ in฀ audit? ?? and? ?? related฀ services.฀ In฀ addition,฀ candidates฀ are฀ expected฀ to฀ develop฀ a฀ broader฀ knowledge฀ of฀ audit? ?? services฀ and? ?? practice? ?? management.฀ Candidates฀ should฀