Exam Technique

1) Of course you must show the calculation

2) The marks available in the question will reflect the number of risks that are expected of you. If the question asks you (unusually) simply to identify the risks, then if it’s a 5 mark question, you’re looking for 5 risks

If it asks you to identify and explain and it’s a 10 mark question, again you’re looking for 5 risks

3) That’s tricky. If it’s not too late in the day, check out some of the international stream exams where the exams are pretty similar and those exams DO show the marks available. Compare the UK version with the International version and see if you can’t determine some sort of trend as to how many points you need to be making

4) I would have thought that it was an absolute necessity to identify the factors that create the risk – there’s no point in saying that the auditor lacks independence without identifying how or why independence is lacking

5) The point about ISAs is that you should be able to apply the common sense that lies within those ISAs to the scenario given in the question.

But don’t waste your time trying to learn ISA titles and numbers – reference to the ISA covering, say, fraud is all that you need to say before applying that ISA to the issue at hand

6) I don’t think that that marking scheme is written in tablets of stone. I’m sure the examiner isn’t sitting there trying to work out a risk that is significant enough to score 2 marks whereas she could slot in another risk of material misstatement for just 1 mark

7) Sure you are … but it depends on the context. If you’re writing a press release, letter to a prospective shareholder, others including even management, you mustn’t forget that these people have not (probably) qualified as accountants so it would be much preferable and professional for you to write something like “According to the figures in the Statement of Financial Position (SoFP) the gross profit percentage (GP%) has fallen ….” and from that point on you may refer to SoFP and GP%

8) Some years ago we at Opentuition took the executive decision that we would no longer issue tips for exams – we are in no better position to know what is likely to come up than anyone else. So, no, I have no thoughts on the matter. Read the last 4 or 5 technical articles, read the examiner’s reports from the last 2 years, see what BPP, Kaplan and Becker are suggesting might be topical (although at least 1 of those 3 tends to tip anything and everything within the syllabus and then rightly claims an accuracy rating of 90+%)

Weekend – what else have I got to look forward to in life! Of course I shall be here and responding to all your last minute questions and, if I don’t hear from you, good luck in the exam

OK?

By the way, did all these questions suddenly hit you this morning or have you been storing them up!

When calculating, for example, days sales in receivables you need to write:

($10,000 / $150,000) x 365 = 24.3 days

where sales for the year are $150,000 and receivables are $10,000 (but you can miss off the $ signs)

And, if last year’s sales per day in receivables was, for example, 28.2 days, there’s no point in saying “Days sales in receivables has fallen by 3.9 days” because the monkeys in Frankfurt zoo could see that

It’s the proportion by which they have fallen that is relevant ie “Days sales in receivables has fallen by almost 14%. This could be due to a number of factors but it would seem that the new credit control department is now working efficiently”

(14% is calculated as 3.9 fall / last year’s figure of 28.2 days)

OK?