AAA Exam – Advice

You don’t need to watch the lecture – but please take a quick look at this article https://opentuition.com/acca/aaa/advanced-audit-assurance-tackle-exam

You probably think it too late to change your approach but you really should be starting with the case study question – if part (a) is 20 marks that’s almost a “smaller” question.

It’s really important to think about mark allocations e.g. for risks:
20 marks at 2/3 marks per risk evaluated means you are looking for c. 8 risks – you need to write only 2/3 sentences for your evaluation, 1 of which should be the easiest mark for materiality, where relevant (i.e. numbers provided).

A materiality sentence can be very short – for example: “For the Sunseeker ships, $75 million amounts to 4·2% of total assets and is therefore material.”

Materiality is likely to be capped – typically at 4 marks – so you don’t need to calculate for every risk – but that’s fine because some risks don’t need quantification (e.g. non-disclosure of RPTs or a matter of detection risk).

You may have read it already but please find time to look again at the “Read the mind” article https://opentuition.com/topic/looking-for-guidance-on-marking if you compare the skim review the answers – it is not what is long that earns the marks – but what has been thought out. Get the feel for what earns a mark and what doesn’t.

SP exams are not a speedwriting/typing test – the mantra is “THINK MORE – write (type) LESS)”. If you are just typing, typing, typing you can’t be thinking. You should be thinking – does my audience the board of directors/marker/examiner want to know this? If anything is straight from the scenario – then no – they know that already – so your point has to add value.

Re ratios – please see what I wrote here about ratios (in response to the absence of a spreadsheet workspace) https://opentuition.com/topic/cbe-question-practice-for-professional-exams-practice-platform.

Re marking and ratios – this is the TYPICAL scheme (S/D19) taken from a Q that referred to using analytical procedures:

“Up to 3 marks for each audit risk EVALUATED unless otherwise indicated. Marks may be awarded for other, relevant risks not included in the marking guide.” In other words – some risks may be worth a max of only 2 marks. This means that you shouldn’t waste time trying to think of or “force” a 3rd point to make for a particular risk. If you can think of only 2 sentences – great – move on!

“In addition, ½ mark for each relevant trend or calculation which forms part of the audit risk evaluation (max 3 marks)” This is what I write more about in the article – it has to be PART of the evaluation, but is ½ per calculation within the evaluation – and capped.

“Materiality calculations should be awarded 1 mark each (max 4 marks).” – I already dealt with above.

Let me illustrate with a para from the answer – first by shortening it to its essence and then adding marks in brackets:
“Several audit risks arise as a result of the disposal. First there is a risk that the assets are not treated as a disposal group for the purpose of IFRS 5 and have continued to be depreciated. Assets are possibly overvalued if an impairment review has not been performed or assets not measured at the lower of carrying amount and fair value less costs to sell. The fact that Primal Burgers Co’s revenue is projected to fall by 3·9% indicates that impairment of assets could be an issue, increasing the risk of misstatement.”

“Disposal
There is a risk that the assets are not correctly treated as a disposal group and have continued to be depreciated [1 mark]. Assets are possibly overstated [1/2 mark] if an impairment review has not been performed [½ mark] or assets not measured at the lower of carrying amount and fair value less costs to sell [½ mark]. The fact that Primal Burgers Co’s revenue is projected to fall by 3·9% [1/2 mark] indicates that impairment of assets [0 mark – repetition] could be an issue, increasing the risk of material misstatement [½ mark].”

There are other ways I could have shown this but essentially there are 3½ marks here – 3 for evaluation and ½ for the ratio/%.

Note that if the the requirement does not specifically call for ratios/trends, they can still be included in the answer to explain risks – but will not carry additional marks.

Magdalena – I am absolutely delighted for you – that is terrific! I would be grateful if you would consider writing a post “How I passed AAA at 3rd attempt [with 70%]” – or similar – with just few sentences that would give encouragement to students who are following you.

If you post something to this forum https://opentuition.com/forum/acca-forums/aaa-advanced-audit-and-assurance-forums I will make it a sticky post.

Congratulations again!

PS – I have just noticed that on the exam results post someone has replied to your post “Finally passed 73%” with “What was your strategy” – so if you can make a post I can direct them to it.

Thank you very much for the time you took to write the post – I have left it exactly as you wrote it – this is exactly what students need to read 🙂

All marginal fail scripts are “second marked” – to ensure that everything that can be credited has been credited. You should appreciate that especially for an almost wholly written exam like AAA, a marker has to exercise judgment in the awarding of marks – especially when a candidate’s first language is not English. A marker may read, re-read and re-read again a sentence to make sense of it – but frankly, if after 3 readings, the meaning of a sentence is not clear, a marker is not going to give credit for it. Second marking ensures that every effort is made to give credit where it is due.