AAA Bird Eye View: Practice Management

KASHIF KAMRAN- FCCA ( 28/05/2021
kashifkamran@gmail.com/
+Whatsapp923332383442)
AAA bird eye view Practice management

or even in both
in any section
Can we tested
at times
Ethical issues
Professional issues
SECTION A
Risk assessment
Must testing in each Q1, Quality control issues
syllabus area D
Procedures
Using the work of others- prerequisites
Knowledge
areas
Completion & reporting Knowing – what is a significant component? +

Going concern Responsibilities of component auditor
stage(Syllabus area E ) is towards group auditor?+ responsibilities of
Audit report
SECTION B
MUST in either Q2 or Q3 of group auditor towards component auditor

Evidence section B
Auditor responsibilities for laws and
Forensic audit regulations, opening balances, fraud in
Other assignments (Syllabus financial statements
Audit of performance F) whenever tested is placed in
info Meaning and use of professional skepticism
only section B, but testing of
including its importance
Review of PFI this topic is not must in each
Due diligence review exam sitting. Money laundering – its means, stages and anti
ML procedures used by audit firm
https://www.youtube.com/kashifkamran https://www.facebook.com/AAAbyKK
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Key skills to pass AAA exams
• To be successful in the AAA exam, you must

demonstrate competence and skills in four key
areas:
1. Good level of technical knowledge including
financial reporting knowledge
2. Ability to apply this knowledge to the specific
circumstances of the scenario
3. Carefully read and address each of the specific
requirements
4. Take time to think and plan their answers and
manage their time well
Final checklist for AAA June 21
1. Ensure you have covered the core syllabus areas

2. You have practice recent past papers from Sept 2018 & onwards
3. You have practiced adequately on practice platform (if appearing for CBE
exams)
4. You are familiar with functionalities of CBEs, the shortcuts to use, use of
calculator(whether you will be using on screen one or your own), scrap pad(
will you be using it or not), word processor (typing speed) and spreadsheet(
its not mandatory in AAA but you may use when working on ratios in Q1)
5. You have read all the FIVE exam technique articles (Part 1 to 5)
6. You have read the recent article , the exposure draft on code
7. You have watched my recent June 2021 practice to pass and concentrated on
guidance given therein
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How to add value to your AAA answers?

• Calculate & comment on materiality where possible (don’t look at marks)
• Use headings, followed by reasonable paragraph to explain your point
• Identify flagged points from case to explain first over minor issues or points
• Perform calculation in your answer where possible through given data, like calculation of finance cost if
all parameters given
• Identify and use % of changes in FS data over last year in your answer to make you point stronger and
standout for marking team
• Break answer into different parts by carefully evaluating the requirement (how many things asked for)
• Ensure you put the right structure of briefing note from start to end and score at least 3 out 4 in briefing
note requirement
• Comment on accounting treatment where possible, while commenting on accounting treatment,
identify the issue adopted by management in the accounting treatment in case.
• Use proper audit jargons in your answers
How to surpass 50 marks in first attempt in AAA

• When you look at the 100 marks paper, there might be some requirements which you
don’t know, DON’T BE PANIC
• Grab opportunities and excel upon them , rather getting panic out with what you don’t
know
• For example in Q1 you might be able to do part (a), (b) and (c), but you don’t know
part (d) for 8 marks, leave it and move on to Q2. Don’t get stuck on something you
don’t know, as you are losing opportunities you have in later questions.
• Give each question, the stipulated time it has to be given, don’t overstretch time on
one question, because again this way you are losing opportunities in question ahead.
• Grab opportunities, don’t get stuck, don’t be panic out, ignore what you don’t know for
the last few minutes of exam paper, and this way your march toward 50 becomes
easier
• Look at the tips for value addition to your script in the post/ picture below it.
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AAA: Risk assessment

• You must have attempted questions on risk assessments Article to read : https://bit.ly/3wCvP5T
from Sept 18 onwards (Copy and paste the hyperlink in browser and
• Be clear with business risk read article)
• Be clear with audit risk

• Be clear with Risk of material misstatements (RoMM) https://bit.ly/3wCvP5T
• Be clear with audit risk / RoMM question specifically
asking for utilizing the analytical procedures(AP) [and the
related marking scheme for AP]- example Sept 18 Q1
• Be clear that in audit risk/RoMM questions at time, the
examiner says, You should not or DON’T , carefully look
what the examiner don’t want to be addressed, read the
requirement carefully (Example: Sept 18 Q1)
AAA: Business risk assessment

• Business risk in general is worth 2
marks.
• However if you utilize a trend as Webinar to watch:
part of your business risk answer https://bit.ly/3ujftxd
or a calculation to demonstrate
your business risk you will be
awarded an extra 0.5 marks.
• For understanding of business risk,
drafting and marking scheme
watch my webinar, recommended
on right side.
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AAA: Audit risk/ RoMM

Right approach
• Be clear that the only difference between  In your RoMM explanation, you should pick the risk very
audit risk approach and RoMM is the detection well, that is, whether the risk relates to wrong recognition or
risk which is part of the former. no recognition, or risk of classification (inappropriate), or
• You need to be very strong on RoMM disclosure (no / or wrong), or valuation (inappropriate) etc.
identification and explanation to excel a  In your RoMM explanation, you should finally comment on the
question of audit risk and RoMM itself, as misstatement, whether there is a specific under or
RoMM is the critical component of both risk overstatement in an account balance or the FS are misstated
models due to lack of disclosure or any other matter.
• When explaining RoMM, where possible,  Note: In the case study focus on / or pick the RoMM flagged by
comment on materiality as this is a high level examiner like notes numbers in FS, or the one on which
skill you need to demonstrate being an audit examiner has elaborated more ( like at time examiner stretch
manager an issue more in case over others by putting more lines in
• When explaining RoMM, focus on accounting explaining it). These are the ones to be prioritized. If you pick
treatment and explaining them briefly to risk where values are given, surely you can work on
identify what may be / or is wrong within the materiality and the value will relate to an accounting
treatment adopted by the client treatment so you can comment on it as well to maximize your
marks.
AAA: Audit risk/ RoMM Marking scheme

• Audit risk/RoMM, the max marks per risk is 3, • If an audit risk/RoMM question ask specifically
however there could be risk worth 2 marks as well. to utilize AP, then max marks are 5 .
The 3 marks risk are generally the ones which have
a comment on materiality, accounting treatment,
• To gain these 5 marks, you need to calculate the 5
risk and impact. ratio with comparative (for both years) given.
Then you need to comment on each ratio result
• The ones like, there is no audit committee, or no
to identify the associated risk portrayed by the
internal audit function or the company is recently
listed , or this is the first year audit are risk which result of the ratio, for e.g. if receivable days are
fetch 2 marks as it does not involve the materiality rising, the associated risk could be that
& accounting treatments. customers are struggling to pay on time and the
• The materiality marks in audit risk/RoMM are allowance of bade debt is understated and
capped up to 4 marks. I would recommend you receivable overstated.
calculate materiality in your audit risk/RoMM
answer where possible don’t just focus on cap of 4, Webinar to watch:
as the materiality calculation is a good skill, even https://bit.ly/3fMAqvp
though you will be awarded max 4 marks for
materiality calculations
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AAA: Audit procedures

• Be aware of properties of a good procedures, remember the Marking 1 mark per procedure
pneumonic CASP scheme
• Must be case specific (If you are making procedures on Examiner criticism “Candidates should also
Government grant or goodwill, there will be a para on it in case, remember that each procedure is only worth
you need to read it well to identify facts to later make procedure 1 mark hence producing a list of 20
around it) procedures for 5 marks is likely to add
• Must start with an action (when writing procedures you should unnecessary time pressure in the exam.”
start procedures with an action, like review, discuss, re-calculate
etc.) Webinar to watch:
https://bit.ly/3vlBLQe
• Must contain a source / subject matter ( if you are discussing ,
then mention with whom, or if you are recalculating mention
what , if you are reviewing , mention what you are reviewing etc.)
Article to read : https://bit.ly/3bN4KVx
• Must contain a purpose/objective ( why the procedure is
performed, normally statement like , to ensure OR to confirm ….. (Copy and paste the hyperlink in browser and
Etc ) read article)
AAA: Evidence
• Evidence is a very important topic and in recent papers
have been much tested. Marking 1 mark irrespective of the
scheme type of question on
• Students should be well versed with types of questions on evidence
evidence
• One type of question on evidence ask for – comment on Webinar to watch:
the matters and explain the evidence in working paper https://bit.ly/3yGwh4L
file?
• Another type of question on evidence ask for – comment on
the sufficiency and appropriateness of the evidence Article to read : https://bit.ly/3oTlRdu
obtained?
(Copy and paste the hyperlink in browser and
• Student should practice both equally to gain exam read article)
confidence
• Watch my previous webinar for both the type of questions
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AAA: Ethical & Professional issues
• Very regular feature of AAA exam paper. Marking 1 mark per issue + 1
• Q1, includes a part on ethical and professional issues mostly scheme mark per action
around 6 to 8 marks.
• In section B, also consist of larger chuck of mark on ethical and Webinar to watch:
professional issues often but all in each exam sitting https://bit.ly/3bVZdw2
• Students should be sound on picking the issues and carefully
spending time on explaining why it is an issue and then
recommending an action to overcome it, as a good exam
approach to fetch 1 mark for issue and 1 mark for action. Article to read : https://bit.ly/3upMgkm
• Professional issues can be any issues in the case study apart from (Copy and paste the hyperlink in browser and
ethical issues. read article)
• Student should not be bifurcating issues into 2 classes but should

focus on picking and explaining an issue as you are an audit
manager in the paper.
• Be sound on knowledge of ethical code and safeguards
AAA: Quality control issues

• In section B of AAA paper, often there is a question set on Marking 1 mark per issue + 1
quality control issues, with ethical and professional issues. scheme mark per action
• A student should be well versed on ISA-220, the quality
control element for an individual audit to identify the right Webinar to watch:
quality control issues from the case study https://bit.ly/3oVgTgr
(watch last 1 hour only)
• A good exam technique for quality control is- pick up the
quality control issue, justify why it is an issue, connect the Plus
issue with an element of quality control mention in ISA220 https://bit.ly/3yGvcdd
to conclude that the quality has been compromised in the (watch the first 37 mins
particular area to fetch 1 mark. only)
• Connecting the quality control issue with the quality
control element as given in ISA-220 is very important. Article to read : https://bit.ly/3yEyI7P
• Watch my previous webinar + read the article to gain (Copy and paste the hyperlink in browser and
confidence. read article)
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AAA: Practice management
• In recent papers, the examiner focus has increased on Marking 1 mark / rarely 2 (Watch
scheme the webinar for clarity)
practice management.
• Practice management is about carefully evaluating
Webinar to watch:
matters to reach a decision whether to: https://bit.ly/3hVzCXH
1. Accept a new audit client
2. Offer further non-audit services to an existing audit client
3. Offer non-audit service to a non- audit client
• Question on the above topics have come very regularly in a Article to read : https://bit.ly/3foZ0Dx
larger stretch of AAA history and has regained back (Copy and paste the hyperlink in browser and
examiner focus in recent 2 years. read article)
• Question on practice management on offering non-audit

services to existing client / or new client has been a regular
feature of other assignment like forensic and prospective
financial information in past papers.
AAA: Audit report

• Question on audit report isn’t just a question
asking to judge the right opinion, but the
question is well diversified. Students should
carefully evaluate the requirement of an audit Financial
Impact on
report question to pick exactly what the

examiner is asking. statements
• In a question on audit report, the examiner
ask for impact on, but reading the impact on
is very important you cant just presume its on Opinion
the audit opinion, rather you need to read the
full statement impact on because at time
examiner ask for impact on financial
statements, or impact on audit opinion or Audit report
impact on audit report.
• So your careful attention is much important
reading what impact examiner is looking for.
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AAA: Audit report

• Further the examiner in a question on audit report ask for Marking 1 mark per anything
other requirement as well which need to be carefully scheme asked for in reporting
evaluated as well. The question on audit report may ask for: question except for going
concern matter where
1. Critical appraisal of the draft audit report each matter is worth 2
marks
2. Comment on the matters
3. Action necessary
Webinar to watch:
https://bit.ly/3bWxATi
Article to read : https://bit.ly/3cf5F1l

(Copy and paste the hyperlink in browser and
read article)
AAA: Going concern

• You must have seen, full scale questions set around going
concern matters, procedures and impact on audit report in Marking 1 mark per anything
past paper. scheme asked for in reporting
question except for going
• Instances like Dec 18 Q2 and Dec 15 Q2 are good concern matter where
examples where examiner tested students knowledge in each matter is worth 2
terms of : marks
• Explaining the going concern matters
• Procedures to be performed on going concern/ or
evidence in working paper file for cash flow forecast Webinar to watch:
https://bit.ly/3fpJkjr
• Impact of audit report for going concern matter.
• Be sound on audit report implication for going concern
matters whereby:
• There is a material uncertainty which is disclosed by Article to read : https://bit.ly/3uvWZde
management (Copy and paste the hyperlink in browser and
• There is a material uncertainty not disclosed/ partially by read article)
management
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AAA: Other assignments

• Other assignments are a regular feature of AAA Section B of Marking 1 mark per anything
the paper. scheme asked for MOSTLY but
watch webinar for clarity
• Ideally, in most cases not all, one of the section B question
is on other assignments.
• Students should be well versed with the syllabus around
other assignments, covering due diligence, audit of
performance info, review of prospective financial info and Forensic audit and Due diligence
forensic audit.
Webinar to watch:
• My March 2021 webinar extensively covered other https://bit.ly/3bTQuug
assignment spread over 2 days, the links are shared for you
to watch Audit of performance info &
Review of prospective financial
info
Webinar to watch:
https://bit.ly/3p1HYyE
AAA: New article
• The new article has been updated on AAA technical article Watch the video on new
page, titled Exposure draft: Proposed revisions to the article
code to promote the role and mind-set expected of https://bit.ly/3fnAORP
professional accountants
• This is applicable for June 2021 exams and onward Article to read : https://bit.ly/3fPKW4W
• You should have sound understanding of the article as (Copy and paste the hyperlink in browser and
initially articles are tested for knowledge given within read article)
them.
• My recent June 2021 webinar covered it in depth, the link
to watch the discussion on new article is given on the right,
click and watch it.
AAA June 2021 10

AAA Bird Eye View: Practice Management

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KASHIF KAMRAN- FCCA ( 28/05/2021

AAA bird eye view Practice management

Completion & reporting Knowing – what is a significant component? +

MUST in either Q2 or Q3 of group auditor towards component auditor

AAA June 2021 1

Key skills to pass AAA exams

• To be successful in the AAA exam, you must

Final checklist for AAA June 21

1. Ensure you have covered the core syllabus areas

AAA June 2021 2

How to add value to your AAA answers?

How to surpass 50 marks in first attempt in AAA

AAA June 2021 3

AAA: Risk assessment

• Be clear with audit risk

AAA: Business risk assessment

AAA June 2021 4

AAA: Audit risk/ RoMM

AAA: Audit risk/ RoMM Marking scheme

AAA June 2021 5

AAA: Audit procedures

AAA June 2021 6

AAA: Ethical & Professional issues

• Student should not be bifurcating issues into 2 classes but should

AAA: Quality control issues

AAA June 2021 7

AAA: Practice management

• Question on practice management on offering non-audit

AAA: Audit report

report question to pick exactly what the

AAA June 2021 8

AAA: Audit report

Article to read : https://bit.ly/3cf5F1l

AAA: Going concern

AAA June 2021 9

AAA: Other assignments

AAA: New article

AAA June 2021 10

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