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Hi
Question based on audit risk like ‘Describe six Audit risk and Auditor’s responses …….’
Audit risk like deficiency
Audit response like recommendation?
Same as control deficiency and control recommendation?
But in auditor response – is there any particular use of words like recalculate, observe etc is there? Any set basis we had to follow?In case of receivables :
Can we say Send particularization to customers
Recalculate recevables days
Review aged – is appropriate audit response?@Vavneetb – Audit risk is not like a deficiencies, deficiency is related to Internal Control of the Company and audit risk is related to External audit of the company
Audit risk respond to the auditors question if FS are misstatement
Simon – by all means help out students on the “ACCA Forum” but please do not answer posts on this “Ask ACCA Tutor Forum”.
Audit risk/response Qs are completely different from Deficiency/recommendation Qs. Deficiency is a control weakness and the recommendation is what MANAGEMENT should do about it. Audit risk includes the risks of misstatement in the financial statements (inherent risk and control risk) and the risk that the auditor fails to detect such misstatements (detection risk) – the latter is particularly relevant for new clients. The AUDITOR’S response to the risk is what the auditor should plan to do to address the risk. For each risk this can include designing tests of controls and/or substantive procedures. For receivables, obtaining external confirmation (say when/of what e.g. year-end balances) is a response to a risk about existence, but if the risk is valuation (recoverability) the response would be extensive review of after-date cash receipts.
The examiner gives invaluable guidance in the reports – please read the examiner’s report for M/J18 against the corresponding Qs & As, once you have attempted them. They are available on ACCA’s www https://www.accaglobal.com/uk/en/student/exam-support-resources/fundamentals-exams-study-resources/f8.html
Thanks for replying. I really appreciate it.
I am struggling with the understanding whether the structure of my answer is correct and whether it will be acceptable to the examiner.
Could I answer a full question on here and get your opinion and perhaps a few tips? I keep losing confidence when my answer is articulated differently to the book – but I’m not sure whether it has the correct effect and meaning.
Many thanks in advance.
Also, under audit risk model – what answer should we give?
components of audit risk are CR,IR and DR ..so is it the same answer?I am afraid it is not possible to provide marking services. You have done a lot of study (I know!) and I can tell from your Qs that you are getting there – I know students who have appeared far less prepared than you pass – so I think you need to take some pressure of yourself. Plan to do just a few things this weekend.
1) Even if you are not sitting CBE, then do attempt any or all of the Section A’s of ACCA’s Specimen, S16 or D16 exams – they should only take an hour. You should aim to NOT RUSH this section and be getting say 20/30 marks – being reassured that you will do well in this part will help take the pressure off you in Section B.
2) See our exam style and standard Section A Mock Exam https://opentuition.com/acca/aa/acca-aa-revision-mock-exam/ – answers are fully explained so you can learn from any mistakes (which may just be carelessness in reading the Q).
3) Read one or more examiner’s report – to understand what the examiner does and doesn’t want in the “risk”, “controls” and “evidence” Qs in Section B. Remember 35/70 = 50% is all you need to pass this section and if you get 20/30 in Section B, you will have a clear pass of 55%. In theory you need write only 35 sentences for 35 marks – of course not every sentence will earn a mark so you should aim for 70 sentences, but my point is – that really isn’t a lot of writing. It is better to THINK and write less – this will earn some marks – than not think and write more – which may earn no marks at all (!)I don’t understand this Q:
@vavneetb said:
Also, under audit risk model – what answer should we give?
components of audit risk are CR,IR and DR ..so is it the same answer?Yes the audit risk model is AR = IR x CR x DR
But you would only describe/explain this in a Q which specifically asked for this. Most Qs will ask you to “identify and explain” risks in the context of the given scenario. In this case, there will be NO marks for regurgitation of textbook knowledge of the model.
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