Please Share your P7 Mnemonics ………………PLZ hurry……

Understanding a Business “INOM”

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

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.

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 — 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
Accuracy — the transactions were recorded at the appropriate amounts
Completeness — all transactions that should have been recorded have been recorded
Occurrence — the transactions actually took place

2. Accounts: RECV (short form of Receiving)
Rights and Obligations — the entity holds or controls the rights to its assets and owes obligations to its liabilities
Existence — assets, liabilities and equity balances exist
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: ( CAR CO) ie CAR Company
Classification and Understandability — financial statements are appropriately presented and described, and information in disclosures are clearly expressed.
Accuracy and Valuation — financial and other information is disclosed fairly and at appropriate amounts.
Rights and Obligations — the transactions pertained to the entity
Completeness — all disclosures that should have been included in the financial statements have been included
Occurrence — 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 “INOM”
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