Are you planning to sit for the ACCA AAA paper? then you may find tips in this post that will help you ace the paper
The INTRODUCTION to the Advanced Audit and Assurance (AAA) paper on the ACCA website indicates that the AAA exam is designed to reflect the challenges auditors will face in their professional life.
The exam questions will begin by saying “You are a senior audit manager in ABC & Co, responsible for the audit of the XYZ Group”. Therefore, the student will be required to analyze, evaluate and conclude on the audit assignment engagement and other audit issues in the context of best practice (as contained in accounting and auditing standards), as to what an audit manager would be expected to do. Your knowledge may have evolved from a junior person through learning and sitting for the other papers, but you will need to know how the audit functions from start to finish in the AAA paper.
You will be tested to see whether you will be able to fill the shoes of an audit manager.
The AAA syllabus covers 7 major areas (within which are many smaller topics). The 7 areas are:
However, not all of the seven areas are equally tested. Areas 2, 4 & 6 carry approximately 65% of the marks on the paper and are tested every time. This is why mastering these areas are CRITICAL to help one to pass the paper.
AAA questions are mostly scenario-based. Meaning, there are NO MARKS for regurgitating theory, unless the examiner specifically requires a theory to be discussed.
Question 1 will be set at the planning stage of the audit. As an audit manager, you will be asked to prepare Briefing Notes for an audit planning meeting. For this, you will be given background information, matters relevant to audit planning together with selected financial information from the company’s financial statements. You will then have to use this information to evaluate areas of audit risk or risk of material misstatement.
The exam question may paint a situation where a client is not complying with the requirements of an accounting standard.
You, as an audit manager, need to know which requirement of the accounting standard (IASs / IFRSs) has been violated and discuss the implications of this on the audit – to clearly state the further actions the auditor needs to take and to discuss how it impacts the auditor’s report if the issue is not resolved. As an audit manager, the exam question may require you to review the audit team’s actions in planning and performing the audit.
For this, you, as audit manager need to know the auditing standards (ISAs) to see whether the audit has been appropriately planned & performed and if not, the further actions that the audit team will need to take. The exam question may also be set at the final stage of the audit. The audit manager may be asked to evaluate the impact of a misstatement or limitation of scope on the auditor’s report.
Therefore, you NEED to be well versed with IASs / IFRSs and ISAs. Knowing these professional pronouncements will help you immediately see which parts of the scenario represent relevant information to be acted upon in your answer.
So HOW should you study? Make your own notes, mind maps, acronyms, mnemonics.
There is a technique called the Feynman Technique developed by a Nobel prize winner physicist who constantly tested others to explain complicated concepts in simple language to see if they really understood the concept. This technique is basically pretending that you are teaching someone the material you are learning in simple language. If you get stuck then you go back and study and repeat the process until you can explain it clearly and simply. If you are able to explain it clearly then you will remember it. This technique has been proven over and over again. It is the way our thinking processes work that makes this method very effective.
This is part of the LEARNING PROCESS. Simplifying the notes, doing your own mind maps, creating acronyms, mnemonics and pictures will help consolidate UNDERSTANDING and cause THE KNOWLEDGE to STICK.
Then there is a lesser chance of forgetting.
I have come up with quite a lot of acronyms and mnemonics to help my students remember IFRSs and ISAs which I cover in my programs.
Students should not practice Past Year Questions as an end in themselves. It is important to remember they are only a MEANS TO AN END.
What do I mean by this?
Many students practice Past Year Questions to memorize answers. There is no point in memorizing suggested answers for a particular question because the questions appearing in your exam will have a totally different scenario each and every sitting and your “memorized answer” will be wholly irrelevant.
Marks are awarded at AAA level for application of knowledge to a given scenario, where candidates demonstrate an understanding of the issues presented.
Having said that, practicing Past Year Questions has several benefits or aims.
What are the benefits of practicing Past Year Questions then?
The FIRST BENEFIT - help the student get familiar with HOW questions are asked
The examiner will phrase the REQUIREMENT of the question IN A CERTAIN WAY.
And you need to know WHAT THE REQUIREMENT MEANS?
Without going into too much detail, the requirement may be worded this way
Required: Discuss the implications of the matter described above on the auditor’s report (5 marks)
So the student needs to know what is the meaning of
“implications of the matter described above on the auditor’s report “
Why is it 5 marks? What can I write for 5 marks?
Required: Discuss the implications of the matters described above on the completion of the audit and on the auditor’s report, recommending any further actions that should be taken by the auditor.
So the student needs to know the meaning is of
"completion of the audit" and "further actions"
Understanding what the examiner requires is KEY to earning marks
The SECOND BENEFIT - help the student identify relevant points from Q scenarios
What do I mean by this? The AAA student is given a scenario.
The scenarios will always be different.
The student must know WHICH FACTS IN THE SCENARIO are RELEVANT to the requirement asked. You have to practice IDENTIFYING relevant facts for yourself.
While accountants (and auditors) will spend most of their time crunching numbers there comes a time that the findings & analysis etc. will need to be communicated to various parties like partners, clients, shareholders, and other businesses and so writing with precision, purpose, and concisely becomes critical. To this end, the student is encouraged to develop and practice writing so as not only to pass the exam but a foundation for career development.
Your exam requires you to put down your answers in FULL SENTENCES.
You will not be able to do this in the exam if all you do during practice is SCRIBBLING your answers or just jotting down one or two-word answers.
I am NOT SAYING THAT you have to write out all your answers in full but I’m saying that you have to PRACTICE writing out full answers just the way you would in the exam.
To make progress in writing you will have to write every day. Make writing a daily habit.
At first, it may be difficult. With time you will improve.
Practice really does make perfect
A VERY IMPORTANT POINT IS to practice writing with a timer by your side.
A 25 mark question should be completed in 45 minutes. When the time is up… STOP writing. Mark your answer to see how many marks you have. Please do not take shortcuts and skip this step. It would be disastrous. This is really important.
I saw a cooking show once, where accomplished cooks FAILED to win the competition simply because they could not keep to the time. They were good cooks but because they did not complete their dish in the time given they got knocked out.
Time management is crucial. Do not imagine you can do this without practice. Time management must be practiced.
A 25 mark question will need 45 minutes to complete.
You will use 7.5 minutes for reading and planning the answer and the remaining 37.5 minutes to write out the answer.
You will have to stop at the 45 minute time or it will eat into the time of another question and in turn lose out marks that you could collect in another question.
You should try to ensure to sit for at least ONE MOCK EXAM done under exam conditions and have your answers MARKED. The FEEDBACK FROM THE MARKER will expose your blind spots to the things you are doing incorrectly so that these can be fixed before you go in for the exam. At the same time, it will also highlight what you are doing correctly and whether you have gotten full marks for your efforts.
Many students skip this very important part and suffer for it.
Many do not attempt mock exams because they feel they are not ready and will fail the mock exam and their self-confidence will consequently be shaken.
In a study on mock exams, researchers found that students who attempted these had a 70% chance of passing compared to only a 30% chance of passing for students who did not.
If you perform badly at the mock exam at least you will be aware of the areas you are weak in and make an effort to fix them before the exam day.
My advice ...do not skip mock exams
The AAA paper is a challenging paper and much is required by way of preparation to be able to pass this paper.
You need time to study the standards.
You need time to practice exam standard questions.
You also need to practice time management. Start early.
Keen to know how you can ace the ACCA AAA exams? Explore our programs at Ardent Learning Hub
I also have a FREE course “Preparing to pass ACCA AAA paper” in which I outline the steps any student who wants to pass can take to succeed at this paper.
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To your success