Audit Strategy

A. My Study Material (All Books by Pankaj Garg Sir)

 Taxmann's Advanced Auditing & Professional Ethics
 Taxmann's CRACKER–Advanced Auditing & Professional Ethics
 Taxmann's Quick Revision Charts for Advanced Auditing & Professional Ethics
 RTP and MTP of May and November 2020 (Wrote MTPs properly)

B. Chapter Wise Strategy

Divide the whole syllabus into 7 parts as follows –
S. No Topics Importance
1 Standards on Auditing (SA) High
2 Audit Planning, Strategy and Execution, Risk Assessment and Low
Internal Control, Auditing in an Automated Environment
3 Professional Ethics High
4 Company Audit – Includes Audit Committee and Corporate Medium
Governance, Consolidated Financial Statements, Liabilities of
Auditor, Audit Reports
5 Internal, Management and Operational Audit, Due Diligence, Medium
Investigation and Forensic Audit, Peer Review and Quality Review
6 Tax Audit or Fiscal Law Audits High
7 Audit of Banks, NBFCs, Insurance and PSU Medium

1. Standards on Auditing (SA)

 Remember the SA numbers and names thoroughly.
 Always learn/ understand the objective of the SA as you need to quote it along the SA
number and name in the first para itself when you start answering a question.
 Read the main book once and revise the Quick revision charts at least 4 times as it will help
you memorise SAs by heart. Try to remember the names and content when not reading as it
will tell you how much you remember and what exactly you keep on forgetting.
 Whenever answering a SA question, if the question is not direct or you cannot remember the
answer, just ask yourself what you will do as an Auditor in real life and it will become
comparatively easy. Think like an Auditor!
 It becomes really difficult to read all SAs at once, so I used to break them up into 5 series –
SA 200s, 300 and 400s, 500s, 600s and 700s. Take break after each ends, and then sit
again.
 Answering Pattern –
o 1st Para – Quote the SA number and name, along with objective of the SA that is relevant
to the question asked as there are multiple objectives of an SA. The objective doesn’t to
be exact and can be in very raw form in your own language.
o 2nd Para – Write the relevant answer from the SA if it’s a direct question or give a brief
about the topic to which the question is related
o 3rd Para – Write the facts in the question which are relevant to the answer
o 4th Para – Give proper answer (if not already done in 2nd Para) and analysis of the given
facts with SA
o 5th Para – Conclusion
2. “Audit Planning, Strategy and Execution”, “Risk Assessment and Internal Control”,
“Auditing in an Automated Environment”
 Read all the 3 topics, and while reading try to give more importance to topics which have
already been asked in exams based on Scanner.
 I personally tried to avoid those topics (very few) which were creating a confusion between
topics I read in SAs and were somewhat repeated here. However, you will find a lot of
common topics, so relate and read them with SAs to have a better understanding. For
example – SA 300 & 315 with Audit Planning and Risk Assessment.
 You can take the help of acronyms if you like (a lot of teachers do provide them so you can
refer their notes)
  Also, while learning the process or steps in any part, try to learn them logically i.e. what
actually happens or ought to happen instead of just cramming them.
 Automated Environment is slightly more important among all the above 3 topics, so give
more time there.
3. Professional Ethics
 Learn the Sections, Schedules, Clause by heart. Please do read Fundamental Principles,
Threats and its safeguards also!
 Do notice difference between the various clauses which look similar as at times you will
notice that more than 1 clause fits right in the situation. For example – Clause 6 & 7 of Part
I of First Schedule, Clause 5 & 6, 7 & 8 of Part I of Second Schedule. You can find out which
one to quote by reading questions in the Cracker and the Main book by Pankaj Sir.
 Answering Pattern –
o 1st Para - Quote the relevant Section, Clause, Part and Schedules and the content of that
clause or section. The content can be in your own words also but it has to be relevant
and include important words. Also, do mention while writing “CA in practice/ service”,
“Professional misconduct/ other misconduct”. Please quote all the relevant clauses and
sections.
(Tip – In case of 5 marks question, there are more chances that 2 or more Clauses are involved)
o 2nd Para – Write down the objective behind the clause or if there is any regulation related
to the clause then that has to be written over here along with the correct Regulation no.
o 3rd Para – Write down the facts of the given case
o 4th Para – Write the Analysis of the facts with the clauses/ sections. In case, there are
more than 1 clause or more than 1 relevant fact, then analysis has to be written for all
the facts and for all the clauses.
o 5th Para – Conclusion (mention separately if more than 1 clause/ section and if guilty,
briefly mention again why guilty)
4. “Company Audit”, “Audit Committee and Corporate Governance”, “Consolidated
Financial Statements”, “Audit Reports”, “Liabilities of Auditor”
 Read Company Audit to make sure you remember things, do not waste a lot of time as its
importance in CA Final has been very low in past few papers. However, chances of MCQs
remain very high especially from Penalty and Form perspective. Recent Amendments will
always be important.
 Corporate Governance is of utmost importance – Don’t leave it at any cost as it will no
matter what, come for at least 4 marks either in Law or Audit paper and can go upto
anywhere around 10-12 marks. Try to compile notes in such a way for this topic that you
don’t have to read it from different books for Law and Audit. Do check out the attached
notes.
 Consolidated Financial Statements – It is again very important. Try to understand the topic
instead of simply cramming it. Once you understand the topic, it becomes very easy to
remember. You can read Audit reports of Consolidated Financial Statements of any company
you track or invest in or Audited, it will really help you understand and learn. The same goes
for Audit reports in SAs.
 Audit Reports and Liabilities of Auditor – Not that important, but still give them a read.
5. Internal, Management and Operational Audit, Due Diligence, Investigation and Forensic
Audit, Peer Review and Quality Review
 Internal, management and Operational Audit is not important but you should do it as it is
very easy.
 Due Diligence, Investigation and Forensic Audit was comparatively hard for me to
understand and learn.
o Types of Due Diligence, Financial Due Diligence, Hidden liabilities and Overvalued Assets
is important.
o In Investigation, try to read as much as possible instead of cramming, as after a certain
point, it becomes impossible or you tend to forget or mix up with other topics. Try to
understand the answering pattern from Cracker and what all needs to be written. In
exam, if you have to write down on this topic and you don’t remember anything, just try
to think of what you should do as an Auditor, i.e. what all documents you will check and
ask for and the procedures you would perform.
 o Learn key definitions and take a brief idea about topics in forensic audit as it relatively
less important than above two topics.
 Peer Review and Quality Review
o Read peer review thoroughly from the Main book and then revise it again and again from
the Revision Charts. It will definitely come for 4 marks in the paper or show up for 8+
marks in MCQs like November attempt.
o Quality review is not that important due to NFRA now and trying to read/ learn it will
confuse you in Peer Review also. Moreover, the BOS haven’t asked any questions from
the topic till date of my exam. So, do give it a read for MCQs but you can skip it
otherwise.
6. Tax Audit or Fiscal Law Audits
 Direct Tax
o Learn the clauses by heart, there is a pattern in the clauses if you will notice, to a certain
extent, i.e. clauses go by the sequence of their Section number in the Act. Try to
remember them from such tricks and also remember key clause numbers such as Clause
18, 26, 27, 34 as you will be able to rebuild the sequence very easily if you know a few
clauses in between. – Main Book
o Do learn the limits and inclusion/ exclusion in Turnover definition also as it is very
important
o Read the questions in scanner, as it will help you understand the clauses much better
and also what you need to report in that clause. Recommend – Please do a tax audit
properly during your Articleship or learn from someone who has recently done it. It will
help you a lot.
 Indirect Tax – Less Important as it may be abolished
o It will be very difficult to remember the clause numbers, but do remember the schedule
number.
o Try to read questions to understand few important clauses
o Give more importance to theory such as Audit procedure etc.
7. Audit of Banks, NBFCs, Insurance and PSU
 Read them from Revision Charts as it covers almost everything
 In Insurance Audit – try to remember the section numbers of the act as those are important
 When reading, try to get more knowledge about the sectors instead of cramming, it will
become comparatively easy.
 A lot of topics are very general in nature, so you can write normal audit procedures for such
topics in exam provided it is relevant and do link it with the entity being audited and you will
have to mention few key/ entity specific points also. For Example – Testing Controls,
Guarantees, Investments, etc.
 Please do not write one line answers even in points. Examiners hate that attitude. Don’t just
write points mentioned in Revision Charts as it is because they are just summary notes to
help you learn easily, but rather try to explain those points and write meaningful sentences.
 PSU Audit is relatively more important amongst them.
Note: Please read everything at least once! In MCQs based papers, you cannot choose to leave
anything as Board of Studies may ask questions from any topic in MCQs disregarding the
weightage and you might end up losing a lot of marks. When you are reading, always look for small
things from which MCQ questions can be framed. It will help you to look at important things and
save you marks. You can still leave out a few topics if you want to but still at least read them.
Note: Solve ICAI MCQs before doing the 2nd or 3rd revision, as it will help you realise your
shortcomings and will also tell you points on which you need to focus in your upcoming revision.
Note: I had completely relied on Pankaj Sir’s books, however few days before the exams I realised
that the books don’t cover everything in the Study Material. So, even though I wasn’t able to do it,
just compare the Study Material once with the book and marks things that aren’t covered and see
the importance of that topic by its coverage in the exams in last few years before doing it.
Alternatively, you can skip the above exercise as the Cracker will already be containing all the
questions in the past years and if you do it, you will already know what topics are not there in the
Main Book.
Also, don’t try to learn everything (but do read everything once) as you may not remember
everything in the exams and moreover, you will lose out on preparation time which you could have
given to other subjects or revision of what you have already read.

C. Revision:
Read and revise same material again and again, don’t try to read from different materials. You may
refer 2 materials for different topics, but not for same topic. Also, the number of revisions depend
on your preparation. I was too scared of Audit, so I had read SAs, professional ethics and a few
important topics around 4-5 times (not detailed, but short notes) and others 2-3 times.

D. Mock tests:
Give at least 2 mock tests and try out 1 or 2 past attempt question papers also.

Why 2 mock tests?

 The 1st mock test will help you test your exam strategy, knowledge, time management etc.
but there will be many deficiencies which you need to find out and test the new strategy and
updated knowledge again in 2nd Mock test so that going in the exams you are well prepared.
 Do the 1st mock test at the end of 2nd reading/ revision and the 2nd mock test after the 3rd
revision in case you do it or else just attempt the paper by giving a short read about
important topics.
 In case you are giving another attempt, I will suggest that you take more Mock tests and
match your answers with the toppers in that subject to understand where you are missing
out. Look it takes a lot of courage to see your answer sheet again, I can’t do it even after a
rank but still I believe this is the only way out.

What you need to do?

 Understand the question paper pattern – Pattern means what type of questions come in
the compulsory question. For example – In Audit, SAs questions are very common in
compulsory part. Similarly, in DT, first question is PGBP based question with various
entries. In similar fashion, the pattern of the paper needs to be analysed along with the
nature of the questions and how the grouping of topics is being done. In Audit, there are
generally 4 Professional ethics based questions, however, at no point can you decide that it
has the weightage of 16 marks in paper because you will notice that each PE based question
is part of a different question and you will need to leave one question as a choice. Hence, this
becomes of utmost importance. This understanding of question paper pattern needs to be
more based on past attempt question papers rather than mock tests only. Don’t rely on
patterns of 3rd party mock tests, do them just for the sake of it!
 Time Strategy – Do mark your time when attempting mock test papers, from giving yourself
15 minutes reading time, along with filling out details as in answer sheets and MCQ Booklet
to measure the marks attempted in the given time. One thing I realised when I gave mock
tests was that I am not able to complete paper on time for almost all subjects. This helped
me change my approach towards attempting questions, length of answers I was writing and
also adjusting to the fact that the same may happen in Exams also. In fact it did happen in
almost 5-6 papers with varying marks in each paper. Also, you might try to deny that this
has never happened to you, so it won’t happen again, but trust me it hasn’t happened with
me too rather I have always completed my paper in 2 hr 45 minutes by and large. So, do give
mock test and test this before you conclude. Also, in case the same thing is happening with
you, then do the following –
o Check and understand where you are writing unrequired lengthy answers based on
Suggested answers – Cut it down
o If still you aren’t able to fit into the time frame, I would suggest that this can also
provide you an extra edge. For example – I decided that some topics that I wasn’t
comfortable with while studying or writing answer (comfortable means not able to
fetch marks) can be skipped during last day preparations as I can skip those
questions out rightly if they come in exams as I will be short on time anyway. This
approach carries a risk but it is a sound one when even after 2-3 mock tests you are
able to complete only 92 marks paper (Eg - DT)
 Complete the whole paper along with the optional question – One thing a lot of students
do while attempting mock test is that they never solve the optional question which they had
left. I will request you to please attempt that question too. Why? – I analysed in a lot of
 papers that the optional question I left in few mock test had fetched me more marks than the
question I was pretty confident about. This also reflected the negatives of some questions as
to how attractive some questions seem but even a single mistake in these questions can ruin
the total marks awarded. Also, in Exam there are chances that this optional question comes
as it is, so why take a risk? You can do it after a break also and need not do it at that very
moment but the momentum and pressure to finish the paper will be the real test.
 Strict Self-Checking – This is also one of the mistakes a lot of people make. They would
either rely on 3rd party checked marks or even when they are self-checking the answer, they
would simply award reasonable marks. This reasonable has to be very very strict because
you never know with whom your answer sheet lands up while real exam evaluation. He/ She
might turn out to be a very strict checker and you might end up losing more marks than you
ever imagined in your wildest dreams. Be prepared for it by strict self-evaluation. For
Example, when I used to check my audit answer sheet, no matter how much the answer
matches to the suggested answers, I used to never give myself more than 3 out of 5. This
strictness will prepare you for the worst checking.

E. The Mistake in Audit

The one common mistake that a lot of students make in Audit, both during CA Inter and CA Final
is interpreting questions properly. In each subject, we generally tend to read only crux of the
question, find the topic to which the question relates and go on checking the answer as per our
study materials. While reading the answer, we do mark important things but forget to relate it with
what the question had asked and checking whether we have understood the question now or not?
However, in Audit this turns into a disaster as the key of scoring good marks in Audit is the right
interpretation of questions.
To help overcome that, you can take as many past attempt question papers, mock tests, Cracker
also for that matter and just try to read the question with full attention, try to understand what is
required, and then answer and check instantly whether you were right or not. Even a single word
can change the whole meaning of the question in this case.
Please note that this is the most important thing at least in Audit, you may devote n number of
hours studying and revising this subject but if you don’t overcome this problem, everything may
turn out to be a waste of time!

F. Exam Strategy
 In the 15 minutes reading time, try to read at least 3 questions completely, and write down the
relevant SAs, Sections, Clauses etc along with key points on the question paper itself. Also,
encircle key points in the questions so that next time you read/ answer it, you can pay
attention to those points. (Use pencil as this is prohibited, so that you can erase if someone
questions and try to hide it also)
 Try and identify 2 or 3 questions, if you are able to read the full paper, that you think, won’t
fetch you enough marks as compared to others. Simply put, questions which you don’t know or
aren’t sure about!
 When the 15 minutes are over and you receive the MCQ booklet, try and solve the paper within
25-30 minutes at tops but don’t mark the answers just yet in the OMR Sheet. Leave any
question which you haven’t studied or you aren’t sure about but even in those questions, try to
mark options in which you have a doubt so that you don’t waste time on the other options. Also,
encircle or mark this question!
 Now, start writing answers to the Theory paper. Please don’t start with the easiest question or
the best question you know, for which you have already written key points on the question
paper. Why? Simply because, you know the answer, you have written it down and now if you
start writing straight away from this, you will waste too much time to write it neatly and express
yourself more in these answers which won’t get you any more marks but will definitely waste
your time. (For E.g. – Don’t start with SAs based questions)
 Which question to start with? Start with the question you have already written down which is
very straight forward and your creativity won’t come in between to make the answer lengthy (For
E.g.: NFRA applicability) or any new question which you weren’t able to read in the Reading
time. It doesn’t mean that you start writing answer to questions which you aren’t sure about!
 Try to complete 3 questions in next 1.5 hours, where the 3rd one can be the easy one for which
you have written down the key points i.e. the question you know best as this question will help
you regain time lost on first 2 questions and provide sufficient time to solve next 2 questions.
 Now, when 2 hours or 2.5 hours are over i.e. after 3 questions (attempt 4th one only if it ends
within 2.5 hours), go back to the MCQs, if you now know the answer to the MCQs, mark them
or pray to God and mark one! Also, if you were having doubt in any MCQ, now is the time to
check once. Now, start marking in the OMR Sheet. Why now? This will help you relax from the
continuous writing, you will check your most important and compulsory 30 marks at least, and
also relax your mind to think for solutions to the balance theory questions. Also, while solving
theory paper, you may remember some point which might help you solve the MCQ now.
 Now, check if you have marked right option in front of right question –
o Check that every question has been marked
o No 2 marked options in front of any question
o Match the last question number in the MCQ booklet with question in OMR Sheet.
You can do this exercise at the end also, provided you are sure that you will finish paper on time. I
couldn’t finish most of my papers on time so I used to do it at that time only. This is very important
because a lot of students mark 2 options in 1 question and whole sequence goes wrong. It will cost
you a lot, so please make sure you do this!
 Solve the remaining questions and use stapler to tie, don’t waste time in using thread!
Note: Even if you aren’t sure about 1 part of the question, do solve all the remaining parts, leave
sufficient space for that part and then move on to the next question and come back at this part at
the end of the paper when you can’t solve any more questions. Don’t waste time even if you know
the answer but can’t remember or have gone blank, leave space and move on! Come back later if
time remains, but so mark the question in Question paper so that you remember!
Tip: Bury the question paper somewhere as soon as you return home, try not to think about the
paper or see some video about the paper no matter how bad it has gone! In case it goes bad, Keep
Laughing at your luck and think about what others might be going through, that’s what I did!

All the Best!