ADVANCED AUDIT AND ASSURANC (AAA)

1. APPROACH TO EXAMINING THE SYLLABUS

1.1 Examination structure – Technical marks

The examination is constructed in two sections. Section A will comprise a Case

Study, worth 50 marks, set at the planning stage of the audit, for a single
company, a group of companies or potentially several audit clients with detailed
information such as extracts of financial information, strategic, operational as well
as extracts from audit working papers, including results of analytical procedures
being provided. The 50 marks will comprise of 40 technical marks and 10
professional skills marks. All professional skills with be examined in Section A.

Students will be required to address a range of requirements, from syllabus

sections A, B, C and D, thereby tackling a real-world situation where students
may have to address a range of issues simultaneously in relation to planning, risk
assessment, evidence gathering and ethical and professional considerations.

Section B will contain two compulsory 25-mark questions, with each being
predominately based around a short scenario which may relate to more than one
client. The 25 marks will comprise of 20 technical marks and five professional
skills marks. Section B questions will examine a minimum of two professional
skills that are appropriate to the question.

One question will always predominantly come from syllabus section E, and
consequently students should be prepared to answer a question relating to
completion, review and reporting. There are a number of formats this question
could adopt, including, but not limited to, requiring students to assess going
concern, the impact of subsequent events, evaluating identified misstatements and
the corresponding effect on the auditor’s report. Students may also be asked to
critique an auditor’s report or evaluate the matters to be included in a report which
is to be provided to management or those charged with governance.

The other Section B question can be drawn from any other syllabus section,
including A, B, C, D and F.

Syllabus section G on current issues may be examined in Section A or B as

appropriate. Current issues are unlikely to form the basis of any question on its
own but instead will be incorporated into the Case Study or either of the Section
B questions dependent on question content and the topical issues affecting the
profession at the time of the preparation of the exam paper.

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 1.2 Examination structure – Professional skills marks

Starting September 2022, the Options exams will look different. ACCA is
introducing 20 professional skills marks as detailed below into the Options exams
in contrast to the 4 professional marks that were examined previously in Section
A of the paper. The change is to better prepare students for the role of a finance
professional by requiring them to demonstrate the critical professional skills
expected of a professional accountant.
 
These changes build on the previous changes to the ACCA Qualification, such as
the introduction of Strategic Business Leader and the Ethics and Professional
Skills module, ensuring ACCA members have the skills demanded by employers.

Communication

Inform
Persuade
Clarify and simplify 

To earn communication skill mark, students have to express themselves clearly

and convincingly through the appropriate medium, while being sensitive to the
needs of the intended audience. This means responding in a professional manner
and adhering to any specific instructions made. 

Section A questions in AAA always ask for a set of briefing notes requested by an
audit engagement partner or senior manager, which address key matters facing the
engagement team at the planning stage of an audit.

This report should have appropriate headings, sub-headings and a brief

introduction which explains the content of the report to follow. The response in
the body of the report should look professional, use appropriate language and be
clear and effective. It is vital that the report content is relevant to the
requirements, including adhering to any specific instructions given in the
examination requirement.

Analysis and evaluation

Investigate
Consider
Assess and apply 
Appraise

In demonstrating this skill, students must first thoroughly investigate and research
information from a variety of sources and logically process them with a view to
prioritising activities and arriving at an appropriate conclusion or
recommendation. The analysis should form part of a comprehensive evaluation of

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a matter where students have to carefully assess situations, proposals, and
arguments in a balanced and cogent way, using professional and ethical
judgement to predict future outcomes and consequences as a basis for sound
decision-making.

All AAA questions will include this professional skill as it is fundamental that
students can demonstrate their assessment of a given scenario and the application
of their knowledge.

Analysis can be demonstrated by appropriate use of the information to determine

suitable calculations to support your evaluation. The ability to draw appropriate
conclusions from the analysis should be demonstrated, so that appropriate
responses or actions can be proposed.

Identifying where data or information appears to be omitted or where further

analysis is needed to make a recommendation is also important, as that means a
full evaluation cannot be performed, for example, understanding the basis of a
provision and understanding how the audit team can gain sufficient and
appropriate audit evidence in the circumstances.

An evaluation is a balanced appraisal to determine the impact of a course of

action, for example, if a client does not amend a material misstatement in the
financial statements, students need to be able to explain the implications on the
auditor’s report.

Scepticism and judgement

Explore
Question
Challenge and critically assess

This skill requires students to demonstrate in their answer the ability to explore,
question and challenge information and views presented to them, identifying if all
information is available or whether there may be underlying bias, to fully
understand business issues and establish facts objectively, based on ethical and
professional values. 

The information may come from the client, such as in the basis for a provision or
the basis of amortisation of purchased intangible assets. Other scenarios may ask
the students to review the audit work and evidence obtained during the
engagement and assess whether it is sufficient to support a decision or
information in an auditor’s report.

Students are expected to demonstrate professional scepticism and judgement

when assessing this information given in the scenarios. This is key when asked to
evaluate the significant risks in a scenario, or challenging information which has

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 been provided. The risks identified are then prioritized according to their level of
significance in the answers using professional judgement follows by justification
in a brief conclusion.

Commercial acumen

Demonstrate awareness
Recognise key issues and use judgement
Show insight

Students have to show awareness of the wider business environment and external
factors affecting the business and use commercially sound judgement and insight
to resolve issues, exploit opportunities and offer valid advice and realistic
recommendations.

Questions are set in commercially realistic scenarios ranging from private to

public sector organisations, not-for-profit organisations, and regulated industries.

Students may be asked to demonstrate their commercial acumen by assessing the

business risks affecting the client at the audit planning stage, for example, specific
regulatory requirements or the impact of competition on future business. Factors
affecting a client may highlight issues regarding the future trading success of the
business, for example, there is an opportunity to expand the business, but
consideration needs to be given as to how this will affect the current operations. 

Students need to look at external constraints and opportunities where relevant and
also consider the validity/reasonableness of any assumption that the organisation
may be working under, given the external environment.

In addition, students may also show commercial acumen by assessing the impact
of the engagement on the audit firm. This may be relevant in a scenario which
requires an evaluation of whether to accept an engagement, for example, whether
the audit firm is happy to be associated with the client or industry.

Please take note that professional skills marks are only earned when students earn the
technical marks. For AAA, there is more than likely to be an overlap with earning those
professional skills marks as a student is earning the technical marks. For example, if
they are recognising that a risk relates to impairment of some assets and go on to
explain why this is the case relating it to the scenario, they are not only demonstrating
knowledge, but applying that knowledge using their professional judgement.

When considering the professional skills, sometimes they are not always entirely
distinct skills, e.g. a student could demonstrate scepticism as part of an evaluation of a
proposal. They might challenge the appropriateness of the proposal, questioning why it
is suitable for the company, which also demonstrates an element of business acumen.

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2. AIMS OF THE PAPER

On completion of this paper, you should be able to:

 recognise the legal and regulatory environment and its impact on audit and assurance
practice (A);

 demonstrate the ability to work effectively on an assurance or other service

engagement within a professional and ethical framework (B);

 Assess and recommend appropriate quality management policies and procedures and
recognise the auditor’s position in relation to the acceptance and retention of
professional appointments (C);

 identify and formulate the work required to meet the objectives of audit assignments
and apply the International Standards on Auditing (D);

 evaluate findings and the results of work performed and draft suitable reports on
assignments (E);

 identify and formulate the work required to meet the objectives of non-audit
assignments (F);

 understand the current issues and developments relating to the provision of audit-
related and assurance services (G);

 apply a range of professional skills in addressing requirements within the Advanced

Audit and Assurance exam, and in preparation for, or to support current work
experience (H); and

 demonstrate employability and technology skills (I)

3. SPECIFIC COMPETENCIES TO ACHIEVE SUCCESS IN THE PAPER

 A thorough understanding of the relevant audit, assurance and financial reporting

regulations that fall within the syllabus.

 The ability to apply knowledge to specific scenarios.

 The ability to have an independent opinion, backed by reasoned argument.

 An appreciation of commercial factors which influence practice management.

 An appreciation of the fast-moving developments in audit and assurance practices.