Mr Fung Chee Kong (CK) ACCA P7 Lecturer - June 2015 Exam Tips

ACCA P7 - Hot topics for the coming June 2015 exam

THESE ARE JUST GUESSES. USUAL HEALTH WARNING APPLIES – USE AT
YOUR OWN RISKS! (compiled by Fung CK, FTMS Singapore)

Likely to have a question on identifying principal audit risks. See latest June 2013 Q1a and Dec 2011 Q1ai on using ratios for audit risks. See June 2010 Q1a too. Practice all other audit risks questions from Dec 2007 onwards till the latest June 2014 Q1a)

Be prepared for risk of material misstatements (previously known as FS risks). Practice Dec 2008 Q1a, Dec 2009 Q1c, Dec 2010 Q1b, June 2011 Q1ai and June 2012 Q1aii, June 2013 Q1a, June 2014 Q1a. For identifying risk of MM, see Dec 2012 Q1a, Dec 2010 Q1a, June 2009 Q1a. See also Dec 2008 Q1a and Dec 2009 Q1c.

Be prepared for a group audit question. This topic has been appearing every exam since June 2012 (6 exams in a row!). Need to review these latest 6 papers and get the group audit question (usually in Q1 but some are in Q2 or Q5). Could be identify audit risks/risk of MM for a group?! (June 2012 Q1, Dec 2013 Q1, June 2014 Q1)

Roles of audit committee (= Functions of AC) and impact of AC on external audit. See June 2010 Q2d.

Internal auditing – Outsourcing IA issues to consider (from audit firm’s point of view, from company’s point of view), advantages and disadvantages of outsourcing IA to external audit firm. See Dec 2006 Q2 and June 2010 Q2. Using the work of IA – See Dec 2013 Q1c.

Accounting problems/issues (Many past exam questions on these) Read up and focus on the recent 3 years for this type of question - Important areas include audit of provision (including warranty and decommissioning provision), deferred tax, share-based payments, government grants, leases, investment property, change in policy/estimate. You should be aware of the things to cover when question asked for “matters to consider”, then the principal audit procedures.

Use of analytical procedures – Factors to consider when deciding the extent of use and reliance on analytical procedures in testing Dec 2009 Q1a). Although just tested in June 2013 Q1a, plus previously in Dec 2011 Q1a and Dec 2009 Q1a (theory), better to review these 3 questions in case we need to use ratios to get the audit risks. Review June 2006 Q1c and Dec 2006 Q1b too.

Ethical issues facing the auditor – practice lots of the ethics questions. Take note of confidentiality. (Identify circumstances in which the disclosure is permitted or required and discuss the factors, which may justify disclosure under public interest). Take note of advertising ethics too (See Dec 2010 Q4a, Dec 2009 Q4b). Providing non-audit services (IT services, Internal Audit service = Dec 2012 Q3b) and referral fees. Refer to Dec 2006 Q5b and June 2007 Q5b.

QC is important – can be linked to ethical issues above and how ethical conflicts can affect quality of work. Read up QC cases like June 2014 Q3, June 2013 Q2a, June 2011 Q1c, Dec 2009 Q2b, Dec 2007 Q1c.

Assurance engagement – A possible question like factors to consider when accepting assurance services (see June 2011 Q3a, Dec 2010 Q2, June 2009 Q2). Need to review how to audit PFI – See Dec 2007 Q2, Dec 2008 Q1, June 2012 Q2 and Dec 2013 Q5b.

Almost certainly a question on audit reporting – Emphasis of matter (June 2010 Q5), adverse and except for opinion. Read a new article (taken from Nov 2013) on proposed new standard of audit report (a current issue), know the proposed new format and new para to be included.

Review forensic auditing. Read the latest article on forensic published in 2014. See June 2013 Q2c, Dec 2011 Q4, Dec 2008 Q2, Pilot Paper Q2. This topic can be linked to fraud (review June 2013 Q4a, June 2012 Q3b and Dec 2012 Q4c).

Subsequent events – See Dec 2009 Q5 and review Dec 2010 Q3c.

Going concern is always an important topic – can be an audit risk plus see Dec 2013 Q5a and June 2010 Q3.

Related party – See Dec 2011 Q2aiii, June 2011 Q1b.

Audit of opening balance – See June 2011 Q3b and Dec 2011 Q5c

Communication to those charged with governance, communication on weaknesses in IC. See Dec 2010 Q5.

Insurance for auditors – two types, advantages and disadvantages of buying insurance. A good paper to review, with some potential exam topics, is the entire June 2013 exam. Remember the key to this paper is practice lots and lots of past exam papers.
And lastly, look out for any relevant P7 article(s) from March to May 2015.