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ANY ACRONYM’S FOR P7??

Forums › ACCA Forums › ACCA AAA Advanced Audit and Assurance Forums › ANY ACRONYM’S FOR P7??

  • This topic has 11 replies, 8 voices, and was last updated 7 years ago by kayode.
Viewing 12 posts - 1 through 12 (of 12 total)
  • Author
    Posts
  • April 18, 2011 at 6:56 am #48131
    polo5678
    Member
    • Topics: 3
    • Replies: 23
    • β˜†

    Hi everyone, I find these a very useful way of learning things. I am aware of two for this subject:

    AEIOU: for types of audit evidence (AP’s, Enquiries, Inspection, Observation, recalc U lation).

    DAD3 – I will post this later if no ones knows this one! πŸ™‚

    Any more…….

    April 19, 2011 at 9:49 am #80909
    I jah man
    Participant
    • Topics: 1
    • Replies: 4
    • β˜†

    Sorry, correct me….. are they types of evidence or types of procedures???

    April 21, 2011 at 9:48 am #80910
    accm
    Member
    • Topics: 1
    • Replies: 20
    • β˜†

    @ I jah man, these are audit procedures which are carried out by the auditor to confirm financial statements assertions.

    Financial statement assertions are classified into the following five:

    1. Existence: The assertion on existence is made to check whether the specified assets and liabilities are present at the given date. It is also required to check that the transactions that are recorded took place at the specified date. In order to test these items of the financial statement, it is not sufficient that only books are consulted which record the assets or the liabilities. There should be proof of the existence of the physical assets or liability. For checking existence help is also sought from outside.

    2. Completeness: Checking completeness of a financial statement is to analyze whether all the transactions that are already given in the financial statement are rightfully included. In order to abide by the completeness assertion, the auditors prove with the help of sufficient evidence that all the recorded transactions deserve to be included. This is further supported with an external document so as to provide evidence regarding the occurrence of the transaction.

    3. Valuation: Valuation basically checks whether the different components of the financial statement have been included in the right proportion. The components are assets, liabilities, expense and revenue. The auditor does this with the help of GAAP.

    4. Rights and obligations: This is to check whether the assets that are included in the financial statement are the rights and the liabilities are the obligations of the company. In order to ensure this, sometimes special purpose entities are created.

    5. Presentation and Disclosure: This assertion is to ensure whether the items in the financial statements are classified in the right way. It is important to check that the account balance is calculated as well as disclosed properly.

    Auditors decompose these broad assertions into a detailed set of statements referred to as management assertions, separated into three categories:

    1.Transactions:

    Occurrence: The transactions actually took place
    Completeness: All transactions that should have been recorded have been recorded
    Accuracy: The transactions were recorded at the appropriate amounts. This is not an assertion in Voyager.
    Authorization: All transactions were properly authorized
    Cutoff: The transactions have been recorded in the correct accounting period
    Classification: The transactions have been recorded in the proper accounts

    2.Accounts balances:

    Existence: Assets, liabilities and equity balances exist
    Rights and Obligations: The entity holds or controls the rights to its assets and owes obligations to its liabilities
    Completeness: All assets, liabilities and equity balances that should have been recorded have been recorded
    Valuation and Allocation: Assets, liabilities and equity balances are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded.

    3.Presentation and disclosure:

    Occurrence: The transactions have occurred
    Rights and Obligations: The transactions pertained to the entity
    Completeness: All disclosures that should have been included in the financial statements have been included
    Classification and Understandability: Financial statements are appropriately presented and described, and information in disclosures is clearly expressed.
    Accuracy and Valuation: Financial and other information is disclosed fairly and at appropriate amounts

    April 22, 2011 at 1:26 pm #80911
    I jah man
    Participant
    • Topics: 1
    • Replies: 4
    • β˜†

    i totally agree with u accm bcoz the auditor carries out audit procedures in order to create audit evidence. what i was not in agreement with was when polo5678 said “AEIOU: for types of audit evidence (AP’s, Enquiries, Inspection, Observation, recalc U lation).”

    polo5678 said 4 days, 6 hours ago:
    Hi everyone, I find these a very useful way of learning things. I am aware of two for this subject:

    AEIOU: for types of audit evidence (AP’s, Enquiries, Inspection, Observation, recalc U lation).

    DAD3 – I will post this later if no ones knows this one!

    Any more…….

    May 19, 2011 at 10:57 am #80912
    polo5678
    Member
    • Topics: 3
    • Replies: 23
    • β˜†

    @ I jah man

    My statement was correct. These are the methods to gain audit evidence. If you would like a full text book statement then I suggest you read a text book….

    May 19, 2011 at 2:51 pm #80913
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 4
    • β˜†

    What does DADA 3 stand for? Could anyone please give some explanations on this one,thank you very much πŸ™‚

    May 19, 2011 at 3:25 pm #80914
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 4
    • β˜†

    AEIOU are the ways to gather evidence to test the assertions(VCODRACE) metioned by accm, so polo5678 is correct.

    Valuation
    Completeness
    Occurrence
    Disclosure
    Rights n obligations
    Accuracy
    Cut off
    Existence

    May 23, 2011 at 10:27 am #80915
    yousaadat
    Member
    • Topics: 1
    • Replies: 12
    • β˜†

    AEIOU are the the substantive audit procedures which auditors perform to gather sufficient appropriate evidence, on which auditors based their audit opinion.

    where as VCODRACE are used by the auditors to check the assertions made by the directors or top management in the financial statements.

    June 1, 2011 at 9:17 am #80916
    polo5678
    Member
    • Topics: 3
    • Replies: 23
    • β˜†

    DADA3

    Directors
    Assets
    Documents
    A/c system
    3rd parties

    Things to inspect/enquire to get the evidence

    December 5, 2015 at 8:26 pm #287829
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 2
    • β˜†

    For management assertions we already know that ACCA COVER
    but further classifying them into Transactions , Accounts, Presentation & Disclosures

    T A P

    1. Transactions: ACCA CO (to remember it is ACCA Company)
    Authorization β€” all transactions were properly authorized
    Cutoff β€” the transactions have been recorded in the correct accounting period
    Classification β€” the transactions have been recorded in the proper accounts
    Accuracy β€” the transactions were recorded at the appropriate amounts
    Completeness β€” all transactions that should have been recorded have been recorded
    Occurrence β€” the transactions actually took place

    2. Accounts: RECV (short form of Receiving)
    Rights and Obligations β€” the entity holds or controls the rights to its assets and owes obligations to its liabilities
    Existence β€” assets, liabilities and equity balances exist
    Completeness β€” all assets, liabilities and equity balances that should have been recorded have been recorded.
    Valuation and Allocation β€” assets, liabilities and equity balances are included in the financial statements at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded.

    3. Presentation and disclosure: ( CAR CO) ie CAR Company
    Classification and Understandability β€” financial statements are appropriately presented and described, and information in disclosures are clearly expressed.
    Accuracy and Valuation β€” financial and other information is disclosed fairly and at appropriate amounts.
    Rights and Obligations β€” the transactions pertained to the entity
    Completeness β€” all disclosures that should have been included in the financial statements have been included
    Occurrence β€” the transactions have occurred

    ACCA COVER for Audit Assertions
    A = Accuracy
    C = Completeness
    C = Classification
    A = Allocation
    C = Cut off
    O = Occurrence
    V = Valuation
    E = Existence
    R = Rights & Obligations

    ? CAIRO
    C=confirmation
    A=analytical procedures
    I=inspection of assets/records
    R=recalculation/reperformance
    O=observation

    ? ASTOP for control objectives in general can use
    A-Accuracy
    S- Safeguarding asset
    T-Timing Reporting
    O- Orderly efficient business conduct
    P- Prevention fraud or non compliance of law

    ? POPCI -fundamanetal principles
    P-rofessional behaviour
    O-bjectivity
    P-rofessional competence and due care
    C-onfidentiality
    I-ntegrity

    ? PRADA Mnemonic for Audit Opinion Implication
    P-roper accounting records have been kept
    R- all returns adequate to the audit have been received from branches not visited
    A- all explanations and information have been received from the officers
    D- irectors report is consisent with the f/s and directors remun. and all other benefits hvae been properly disclosed
    A-ccounting records are consistent with the fs
    ?
    ? SPAM SOAP Internal Controls
    S – segregation of duties
    P – physical controls
    A – authorization and approval
    M – management controls
    S – supervisory controls
    O – organization as a control
    A – arithmetical and accounting controls
    P – personnel controls

    ? INSIDE A CRAB UK Combined code…
    I=Internal audit – essential 4 listed co.
    N=Nomination comitee – sub commitee of main board
    S=Shareholders
    I=Internal controls – sound system of int controls (Turnbull)
    D=Disclosure of compliance and non compliance
    E=Effective board – through continuous training, regular meetings
    A=Audit commitee – main
    C=Chairman & Ceo roles distinguished seperatly
    R=Remeneration commitee made up of @ least 3 NEDs
    A=Accounting
    B-Balanced Board – between exec & non exec directors

    ? ACCAMAPS
    A= Authorisation
    C= Comparison
    C= Computer Controls
    A= Arithematic Controls
    M= Maintaining a trial balance & Control
    A =Accounting & Reconciliations
    P =Physical Controls
    S=Segregation of duties

    ? PAIDSAP
    P= Pre-numbering
    A= Authorisation
    I= Independent Checks
    Documentation
    S =Segregation of Duties
    A =Analysis & Performance Analysis
    P=Physical Control

    ? MARKSAT for steps in an audit plan/ strategy
    M=Materiality Levels
    A=Analytic Procedures- Ratios
    R=Risk (Audit)-Ir X Cr X Dr
    K=Knowledge Of Business
    S=Staffing- Number And Skills Required.
    A=Audit Approach- Procedural Or Risk Based
    T=Timing- After Year End.

    ? FAT SIS threats to auditor’s independence
    F=Financial
    A=Advocacy
    T=Threats
    S=Self Review
    I=Intimidation
    S=Self Interest

    ? A,E,I,O,U i.e. vowels (Audit Procedures)
    A=Analytical procedures
    E=Enquiry
    I=Inspection
    O=Observation
    U= recalcUlation and reperformance

    ? CACSO Audit stages
    C=Client acceptance/retention stage
    A=Audit planning stage
    C=Control testing stage*
    S=Substantive testing stage
    O=Opinion formulation stage
    * only applicable where the audit approach includes reliance on one or more control procedures.

    ? PEEDO Audit Activities
    P=Planning
    E= Evidence gathering
    E= Evidence evaluation
    D= Decision making
    O= Other activities (delegation, supervision and review- required continious throughout the audit engagement)

    ? Ethical Threats – SIA FS
    S = Self Review
    I = Intimidation
    A = Advocacy
    F = Familiarity
    S = Self Interest Threats

    ? Matters to consider in Appointments – FOC IRR
    F = Fees
    O = Others services
    C = Competence & Due Care
    I = Independence
    R = Resources
    R = Risk

    Audit Risk = IR x CR x DR
    IR = Inherent Risk
    CR = Control Risk
    DR = Detection Risk

    ? Understanding a Business β€œINOM”
    I – information System
    N – Nature of Business
    O – Objective/Strategies/Risk
    M – Measuring Performance

    ? Evaluation of Tender- FPPP
    F= Fee
    P= Professionalism
    P= Proposed approach
    P= Personal service

    ? Contents of Tender WW ROCE
    Who we R: History, portfolio, group structure, Senior profile
    What we Offer: Services etc.
    What we Charge: quote fee exactly.
    What we Expect: Client Responsibility.

    ? Facts that auditor has to consider before acceptance:
    LIST
    Logistics: deadline of AGM, location, staff availability, clients mangt(risk attached with client).
    Information Tech: Software, ERP (used by client)
    Subsidiary Report: What kind of reports required.
    Timings: Timing of procedures, test of control and Substantive Procedure.

    ? Matters to Consider before accepting PFI PINED
    Period covered by the PFI
    Intended user
    Nature of assumption
    Element of PFI
    Distrubutories

    December 5, 2015 at 11:40 pm #288059
    ossamajamal
    Member
    • Topics: 1
    • Replies: 12
    • β˜†

    It should be
    DADA3
    Directors
    Assets
    Documents
    Accounting Systems
    3rd Parties

    November 10, 2017 at 10:35 am #415081
    kayode
    Member
    • Topics: 0
    • Replies: 1
    • β˜†

    What is full meaning of these acronyms in quality control: RADAR & PPP DDD

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