[si80]

46… so close, yet so far! 🙁

[si80]

Hi Mei,

They do tend to relate. Try question 3 (b) from the Pilot Paper, it’s a very good starting point.

[si80]

Hi Liz.

I discussed this with the tutor not long ago, and here’s how our conversation went.

SI80: What’s the difference between an audit plan and audit strategy?

TUTOR: I always think of an audit strategy as one that more or less relies on controls or full substantive procedures. A plan is more detailed. Strategy always comes before plan.

SI80: A strategy, then, is like understanding the entity and its environment, the ICS (Internal Control Systems) and risk and materiality?

TUTOR: Yes. If your strategy is not to do any tests of control, then the detailed plan will take that into account.

SI80: Audit strategy focuses on tests of controls and substantive procedures, whereas Audit plan sets parameters to obtain evidence to reduce audit risks to an acceptably low level. Is that a good way of differentiating the two?

TUTOR: Not really. First you have to decide how you are going to tackle the audit. That’s the big picture. It could be that you decide there are no good internal controls. Your strategy would then be to not do any TOCs and concentrate on substantive procedures. Having decided that then you have to plan how you will use substantive procedures to get sufficient appropriate audit evidence.
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What he’s saying, in short, is that an AUDIT STRATEGY is about implementing a strategy for tackling the audit, and the AUDIT PLAN is about how you will use this strategy to tackle the audit.

Hope this helps.

Si80

[si80]

I like this topic. Always wondered what “Cast the list of creditors balances at year end” meant, even though I knew it would get me marks.

Thanks.

[si80]

I know it’s not the most exciting. But it has to be done.

[si80]

Hello Jack.

I fell narrowly short of passing F8 in June, and am trying it again now. If you are doing full-time work or a course at the same time, the best way to approach it is this:

Sep-Oct: Dedicate large parts of the weekends to study and say, one evening per week to keep you fresh. Try and do at least one set of questions per week, preferably focusing on your weaker areas. Save three nights per week for going out.

Nov: Cut down on the going out a little. Make sure you’re doing two papers every weekend.

Dec: By this stage you’ll have study leave. Make sure that you’ll be able to focus on the exam and nothing else for four or five days.

Hope this helps.

[si80]

Well… for assurance engagement I wrote about 3rd party info, available records, legal services and tax services. That sort of thing.

As an aside… that Q.2 was the hardest one I’ve ever had to face. We always use the word “materiality”, but from what I remember, we’ve never been asked what it means…

Q.3, 4 and 5 were entirely fair though. Suppose I could’ve done a bit better on 1.

For Q.5 I put a Qualification (material mistatement) coupled with an “except for” opinion. I had learnt that the going concern status was not to be affected after reading the question, but nonetheless we had to be aware of the material impact. That’s why I felt my answer was fair.

I should have included more procedures for Q.3, part (c). One was “Obtain a list of balances… cast the list.” Very vague, but it’s all I had time to write. I did enjoy doing Q.4 for the most part though.

Q.1 was a trickier beast. Part (b) with the theory was a very difficult question to answer… I ended up referring to inherent, control and detection risk and trying to make them relevant to the question, which I knew was about spotting risk at the audit planning stage. Parts (a) and (c) weren’t too bad I think, part (d) I ran out of time on. I was able to mention legal correspondence and press reports when it came to discussing the lawsuit though.

Any other thoughts?

[si80]

Brilliant. Thank you.

[si80]

Try this mnemonic: SCI FIC’N (Science Fiction!)

Shareholder contact, Chairman and CEO different people, Internal Audit Department, Financial Experience for at least one NED, Internal Control System is good, Committees – Audit, Remuneration, etc, Non-executive directors.

This way you’ll remember seven requirements for an entity to meet corporate governance. 🙂

[Author]

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