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Professional Skills

VIVA Subject Guide

1 Introduction

From September 2022, the AAA exam will include 20 Professional Skills marks: 10 in the case study Q1 in Section A and 5 in each of the 25-mark questions in Section B. The four professional skills relevant to AAA are: Communication; Analysis and Evaluation; Professional Scepticism and Judgement; Commercial Acumen.

  • All four skills will be examined in Section A

  • Each question in Section B will examine a minimum of two professional skills but not communication.

2 Communication

Q1 will always ask for briefing notes requested by an audit engagement partner or senior manager, which address key matters facing the engagement team at the planning stage of an audit.

Professional marks will be available for:

  • Briefing notes format and structure – use of headings/sub-headings and an introduction

  • Style, language and clarity – includes:

    • appropriate layout and tone

    • presentation of materiality and relevant calculations

    • appropriate use of the CBE tools

    • easy to follow and understand

  • Effectiveness and clarity of communication - answer is relevant and tailored to the scenario

  • Adherence to the specific requests made by the audit engagement partner

3 Analysis and Evaluation

All questions will include this professional skill – it is fundamental that you should be able to demonstrate your assessment of a given scenario and apply your knowledge.

Analysis and evaluation must be in context of the organisation’s situation. The scenario will require an assessment of financial reporting issues and/or ethical, legal and regulatory issues and their impact on the audit process. This may be at the planning or completion and reporting stages of the audit, so any recommendations for further actions must be relevant to that stage.

Analysis can be demonstrated by:

  • Appropriate use of the information:

    • to determine suitable calculations

    • to support discussions and draw appropriate conclusions

  • Identifying where data or information appears to be omitted or where further analysis is needed to make a recommendation/draw a conclusion

An evaluation is a balanced appraisal to determine the impact of a course of action (e.g. if management does not correct a material misstatement, what are the implications for the auditor’s report?).

4 Professional Scepticism and Judgement

These are mandatory skills for an auditor. Consider, for example:

  • The definition of independence of mind – the state of mind that permits the expression of an opinion without being affected by influences that compromise professional judgment, thereby allowing an individual to act with integrity, and exercise objectivity and professional scepticism.

  • The IAASB’s International Standards require professional accountants to exercise professional judgement in applying them.

  • The definition of professional scepticism – an attitude that includes:

    • a questioning mind;

    • being alert to conditions which may indicate possible misstatement due to error or fraud; and

    • a critical assessment of evidence.

Professional scepticism and judgement are essential skills when assessing the information given in a scenario (e.g. when asked to evaluate the significant risks or challenging information provided). Identifying possible management bias and the reasons for management’s preference for certain accounting treatments, for example, would also demonstrate this skill.

You should be able to demonstrate professional judgement by prioritising audit risks or risks of material misstatement in keeping with the “spectrum of inherent risk” introduced by ISA 315 (Revised 2019). You should be prioritising the most significant risks first and in a brief conclusion, justifying your decision.

Information may come from the client (e.g. the basis for a provision or amortisation of purchased intangible assets). Other scenarios may require a review of the audit work and evidence obtained to assess whether it is sufficient to support a decision or information in an auditor’s report. 

5 Commercial Acumen

Questions are set in commercially realistic scenarios ranging from private to public sector organisations, not-for-profit organisations and regulated industries.

You may have an opportunity to demonstrate your commercial acumen by assessing the business risks affecting the client at the audit planning stage (e.g. specific regulatory requirements or the impact of competition on future business). Factors affecting a client may highlight issues regarding the future trading success of the business (e.g. increased risks to future competitiveness and any impact on going concern). 

You may also demonstrate commercial acumen in relation to:

  • audit procedures – are they practical and plausible in the given scenario?

  • recommendation to TCWG – are they appropriate in the given scenario?

  • the impact of the engagement on the audit firm – should the audit firm be associated with the client or industry?

6 Resources

In the Practice Platform you will find:

  • AAA Specimen from September 2022 onwards

  • AAA Practice Exam 1 from September 2022 onwards

  • AAA Practice Exam 2 from September 2022 onwards