ACCA F8 Tips for Dec ’13 Exams by Mr Fung Chee Kong (CK)

F8 – Hot Topics for December 2013 exams (by Fung CK, FTMS)

Professional ethics – Will have a question this December on identifying ethical threats and safeguards/responses. (See June 2006 Q4, June 2007 Q1a, Pilot F8 Q3, Dec 2008 Q3a, June 2010 Q4, June 2011 Q4, June 2012 Q3b).

Acceptance of a new job (could be continue an existing job) – factors to consider before accepting/continuing with an engagement. Including communication with existing auditor before acceptance. See June 2010 Q4c.

With a new job, you will need engagement letter – Purpose and content of the letter (see Pilot paper Q2a, June 2011 Q2b) plus preconditions of audit (see Dec 2010 Q3a).

Theory of evidence – Factors affecting sufficiency and/or reliability of evidence (important). Identify the assertions for class of transactions (see recent June 2009 Q2b, Dec 2009 Q2a and Q5a).

Internal audit (IA) may be featured this exam. Outsourcing of IA – Adv and Disadv, issues to consider (see Dec 2005 Q2, June 2008 Q4, June 2011 Q4b). Reliance on IA by EA – what are the factors to consider (see Dec 2011 Q1e, Dec 2009 Q4b, try and understand June 2009 Q3b). Read up Dec 2007 Q3a too, a good question on IA independence.

Planning is still important, using June 2009 Q1a and Dec 2009 Q1a. Overall audit strategy vs the detailed audit plan doc (content of each doc, see 2009 both June and Dec exams Q1). See also Dec 2006 Q1a for risk assessment procedures (RAP), and June 2012 Q2a (benefits)

Must read up on audit risk and responses to risk (see June 2010 Q1a, Dec 2010 Q3, June 2011 Q3, Dec 2011 Q3, Dec 2012 Q3 and June 2013 Q3b). She may set it again, not using ratios but more of a case study with a story)

The control objectives and internal control you would expect to find in the sales and cash receipt system (see June 2010 Q3 and June 2012 Q1a). Identify weaknesses and recommend improvements. Perform test of controls (see June 2011 Q1a and June 2012 Q1aiii for sample) for sales system. IN CASE sales don’t appear, back up question is PAYROLL (review Dec 2011 Q1, Dec 2008 Q1 and Pilot paper Q4a). Read up June 2011 Q2a on ICQ and flowcharts.

Important – VFM audit, definition of 3E (see Dec 2006 Q2, Dec 2010 Q4). Identify improvements to 3E in a case study.

The substantive tests used to gather audit evidence in respect of major assertions (completeness, existence, valuation and allocation, accuracy, cutoff), especially in relation to debtor (see June June 2008 Q1, June 2009 Q1 and June 2011 Q1b), stocktake (see Dec 2007 Q1b, Dec 2012 Q1a), audit of inventory include obsolescence (see Dec 2005 Q1a, June 2007 Q6, June 2010 Q1b, Dec 2009 Q1b)

Interim vs Final audit – See Dec 2009 Q4a.

Define true and fair – See Dec 2010 Q2a.

Corporate governance is important. Case study, identify improvements to corporate governance. See June 2006 Q3, Pilot Q3, Dec 2011 Q4. Cover audit committee too (see June 2012 Q3c, June 2009 Q4b.

Audit of non-profit organization – Characteristics of non-profit organization, the risks and how these risks affect the audit approach. (Dec 2006 Q4, Dec 2008 Q4)

Going concern definition, indicators, procedures, reporting (see June 2012 Q5b, June 2010 Q5)

Treatment of misstatements identified in the audit – See June 2011 Q5a.

Reliance on expert – See June 2011 Q5b, Dec 2008 Q2a and Dec 2005 Q1b

Audit of opening balance (first year audit) – New topic added in 2011 but no past exam qn

Elements of audit report and what each para means (see June 2007 Q4), different types of audit opinion (see Pilot paper Q2c, June 2009 Q2c and Dec 2007 Q5).

Sampling – See June 2012 Q2b and Dec 2006 Q5.

Other topics – Purposes/benefits of audit, how to remove an auditor (Dec 2005 Q5c).

Look out for any new article on topics relevant to F8, especially the one written by the examiner and her team members.

The above topics are just my GUESSES. Use at own risk!