September update to AA June 2020 Notes 1

Audit and Assurance (AA)

CHANGES FOR SEPTEMBER 2020 – JUNE
2021 EDITION NOTES

Syllabus and Study Guide

The Audit and Assurance (AA) Syllabus and study guide September 2020 to June 2021 can be
downloaded from the AA resources available at www.accaglobal.com/gb/en/student/exam-support-
resources.html. As summarised on the last page, there have been minor amendments to the wording
of a handful of learning outcomes. These clarifications do not affect learning materials or revision kits.

Examinable documents
The examinable documents (available from the same link as above) have been updated to include the
ACCA’s Code of Ethics and Conduct (January 2019). The main revisions to the Code, in so far as they are
relevant to the AA exam concern “safeguards”.

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September update to AA June 2020 Notes 2

CHANGES TO CHAPTER 4 –
PROFESSIONAL ETHICS
The Code has been enhanced to make it clear that that the application of safeguards is only one of the
ways in which a threat to a fundamental principle can be addressed. The alternatives are to eliminate
the circumstance that creates the threat or to decline or end the specific professional activity which is
exposed to the threat. The revised section on safeguards is reproduced as follows:

Safeguards
Applying safeguards may be a suitable response to address an identified threat. Other responses are
to eliminate the source of the threat or decline/end the activity.

The ACCA Code of Ethics (2019) defines safeguards as "actions, individually or in combination, taken
by the professional accountant that effectively eliminate threats to compliance with the
fundamental principles or reduce them to an acceptable level".

A professional accountant’s action is not a safeguard unless it is effective.

The ‘test’ of what is acceptable is whether a “reasonable and well informed party … would be likely to
conclude that … compliance with the fundamental principles is not compromised”.

Safeguards vary depending on the facts and circumstances. Examples of actions that might be
safeguards to address threats include:

๏ Assigning additional time and qualified personnel (e.g. for a self-interest threat).
๏ Having an appropriate reviewer (not a member of the team) review the work performed (for a
self-review threat).
๏ Using different partners/engagement teams with separate reporting lines for the provision of
non-assurance services to an audit client (for self-review, advocacy or familiarity threats).
๏ Involving another firm to (re-)perform part of the engagement (for most threats).
๏ Disclosing to clients any referral fees/commission arrangements for recommending services/
products (for a self-interest threat).
๏ Separating teams when dealing with matters of a confidential nature (for a self-interest threat).

Past exam answers

Great care should be taken when referring to past exam answers which have not been updated. Any
references to concepts of broader safeguards (“created by the profession”, “in the work environment”,
“implemented by the entity”) should be disregarded as safeguards, as they do not meet the definition
(above).

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