AUDIT &

ASSURANCE
GAME CHANGER
WEBINAR FOR
DECEMBER 2022
EXAM
AHMED
+923455191065
VIFHE
+923249221387
 ABOUT ME

• In Campus: Overall, my Subjects are Recent Distinctions:

Currently teaching at SCHOOL OF • (MA) Management Accounting • (PM) September 2019
BUSINESS AND MANAGEMENT (SBM) • (PM) Performance Management • (AA) December 2019
PLATINUM ALP based in Islamabad, • (AA) Audit & Assurance • (AAA) December 2019
Pakistan. • (AAA) Advanced Audit & Assurance • ( AA ) March 2022

• Online:
Teaching AA ( English ) AND AAA
( English ) at VIFHE which is now a Gold
online ALP.

• CIMA & CMA.

Prepared by:- Ahmed Mumtaz

Course Content 7 Areas in
Total

3 Major
Areas= 60%

4 Minor
Areas= 40%

Prepared by:- Ahmed Mumtaz

COURSE
CONTENT:
1- Ethics & Acceptance
2- Audit Risk (Major Area)
3- Internal Control Systems (Major Area)
4- Substantive Procedures (Major Area)
5- Corporate Governance
6- Internal Audit
7- Review & Reporting

Prepared by:- Ahmed Mumtaz

 Exam Format:

Section A Section B
(3 OTQs) (3 CRQs)

Any Area of the syllabus can be tested. 3 Long Questions, where main focus on
In General,20 out of 30 marks are from Major Areas but 20 marks out of 70 are
Minor Areas. from Minor Areas.

Prepared by:- Ahmed Mumtaz

 Pass Rates of AA

45%

44%
Pass Rate 44% 44%

43%

42%

41%

40%
39% 39% 39%
39%
38%
38%

37%

36%

35%
Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22

Prepared by:- Ahmed Mumtaz

Why Students fail in
AA?
1- Poor time Management.
(Poor Typing speed & lack of exam practice on ACCA’s
Practice Platform)

2- Poor score in section A.

3- Scoring nothing or below average in straight

forward bookish Knowledge based (Section B).

4- Exam technique issues in three major areas.

5- Ignoring minor areas during preparation.

6. NOT ATTEMPTING 3 MOCK EXAMS AND

AT LEAST ONE OF THE MOCK SHOULD BE
MARKED BY ANY AA EXPERT TUTOR

Prepared by:- Ahmed Mumtaz

 My Plan

Day 1 Risk 20%

Day 2 Internal Control 20%

Day 3 Substantive Procedures 30%

Prepared by:- Ahmed Mumtaz

 AUDIT RISK
Audit risk is the risk that the auditor expresses an inappropriate opinion
when the financial statements are materially misstated
Sampling and
ROMM= 95% Non-Sampling
Risk

Prepared by:- Ahmed Mumtaz

Describe 5/6/7/8 Audit Risk &
explain the Auditor’s response to
each risk in planning the audit. EXAM
EXAM
REQUIREM
REQUIRE
ENT
MENT
(This Requirement is examined
in every sitting)

Prepared by:- Ahmed Mumtaz

 Marking Scheme

1- Describe Audit Risk = Identify+Explain

• Identification of Audit Risk= 0.5 Mark

• Explanation of Audit Risk= 0.5 Mark

2- Auditor’s Response= 1 Mark

Prepared by:- Ahmed Mumtaz

 Audit Risk (Exam Questions)

There are two possible exam question types:

Type 1: Scenario only

Type 2: Scenario + Extract of FS (ratios)

***Exam Requirement is same in both cases but we can & we

should use FS EXTRACTS in describing Audit Risk (Ratios).

Prepared by:- Ahmed Mumtaz

1- Which FS items are at RISK of MM
(overstated/understated/Misstated)? 0.5
mark
HOWTO
HOW TO
2- Why you as an Auditor thinks that
client’s A/C TREATMENT is wrong or DESCRIBE
DESCRIBE
could be wrong? 0.5 mark AUDIT
AUDIT
There is a RISK that
RISK?
RISK?
_________________________ (ROMM)95%
(ROMM)
95%
***Please note that if client’s treatment is
wrong, don’t say there is a RISK because
it's surely wrong then***
Prepared by:- Ahmed Mumtaz
 How to describe Audit Risk?
(Detection Risk 5%)

Auditor might not 1- New Audit 2- Time Pressure 3- Lack of Resources 4- Competence
be able to detect Client
the MM in the FS
because:

Prepared by:- Ahmed Mumtaz

1- It’s the Auditor’s reaction against
the RISK.
HOW
HOWTOTO
EXPLAIN
EXPLAIN
2- The response must be a response
of the AUDITOR, not the CLIENT
AUDITOR’S
AUDITOR’S
& must directly relate to the risk RESPONSE?
RESPONSE?
YOU have given.

3- As an Auditor, you should

VERIFY the Risk through your VIFHE Coordinator
RESPONSE.
+923249221387
Prepared by:- Ahmed Mumtaz
 MINOR AREA
(ETHICS)

*Could be tested in SECTION A or in SECTION B.

EXAM REQUIREMENT:
1- Identify & explain 3/4/5 ETHICAL THREATS.
2- For each threat, suggest a SAFEGUARD.

Prepared by:- Ahmed Mumtaz

ACCA Fundamental Principles (ICOPP)

Threats to Independence/Objectivity (ASSIF)

SAFEGUARD: To reduce the risk to an acceptable level

Prepared by:- Ahmed Mumtaz

 Marking Scheme
1- Identification of Ethical Threat = 0.5 Mark
2- Explanation of Ethical Threat = 0.5 Mark
3- Safeguard = 1 Mark

Note: To earn a full mark of each threat you must

explain how the auditor’s objectivity could be
impaired. How auditor’s behaviour could be
affected by the situation which would result in
them being biased towards the client.
Question for the sake of practice: Orange Financials

Prepared by:- Ahmed Mumtaz

 Internal Control System
(Major Topic 02)

There are SIX ICS in Audit And Assurance:

1- Sales 2- Purchase 3- Inventory 4- Payroll 5- NCA 6- Bank & Cash

Prepared by:- Ahmed Mumtaz

Exam Requirements:
1- Identify & Explain 5/6/7/8 deficiencies in
company’s system.
2- Provide recommendations to address
the deficiencies.
3- Identify and explain 5 Key Controls (Good
Controls) ( Direct Controls )
4- Describe a Test of Control the Auditor should
perform.
You should be prepared for
all possible exam
requirements.

Requirement 1= MAYBE
Requirement 2 & 3 = WILL BE
EXAMINED IN EVERY SITTING
Requirement 2,3,& 5 = PROBABLY
Requirement 4 & 5= PROBABLY

Prepared by:- Ahmed Mumtaz

 Marking Scheme

1- 0.5 Mark= Identification of Deficiencies

2- 0.5 Mark =Explanation of Deficiencies
3- 1 Mark = Recommendation
4- 1 Mark = TOC
5- 0.5 Mark = Identification of Key Control
6- 0.5 Mark = Explanation of Key Control

Prepared by:- Ahmed Mumtaz

HOW TO IDENTIFY
DEFICIENCIES? 0.5 MARK

1- Weak
2- Seniority of 3- No 4- No Review of
segregation of
staff. Authorisation. work.
Duties.

6- Look for 7-
5- Manual VS
No/Not in the Documentationa
Automation
question l Issues

Prepared by:- Ahmed Mumtaz

HOW TO EXPLAIN THE DEFICIENCIES?
0.5 MARK

1- Loss of future 2- Loss of Customer

3- Cash Flow problems.
sales. Goodwill.

4- Increase in
Cost (Negative * This could result * There is a risk that
Impact on the in
Business)

Prepared by:- Ahmed Mumtaz

 1- Do not just repeat the deficiency.

2- Try to add value.

HOW TO EXPLAIN
THE
RECOMMENDATIONS 3- Who should perform the activity.

?
4- When it should be performed.
1 MARK
5- Frequency?

6- Be specific.

Prepared by:- Ahmed Mumtaz

 KEY CONTROLS = GOOD CONTROL
(IT’S THE OPPOSITE OF DEFICIENCIES)

1- Key Control are actions that management has taken to reduce the risk of
FRAUD & ERROR.

2- For the full mark , explain the RISK that the control is designed to mitigate.

* This minimises/reduces the risk of

* This ensures that

Prepared by:- Ahmed Mumtaz

 TEST OF CONTROL (1 MARK)

Inquire Observe Dummy Data Inspect

Inquire of Observe the Use test Inspect the

Management. process/activity. data/dummy data. documents/reports
- look for
signatures

Prepared by:- Ahmed Mumtaz

SUBSTANTIVE PROCEDURES
- MAJOR AREA 03

1- Marking scheme = 1 mark per procedure

2- Exam requirement= Describe substantive
procedure the auditor should perform.
* Most Important area of AA

Prepared by:- Ahmed Mumtaz

 SUBSTANTIVE PROCEDURE

A Analytical Procedures
E Enquiries & Confirmation
I Inspection
O Observation
U Recalculation

Prepared by:- Ahmed Mumtaz

ASSERTIONS= CLAIMS OF MANAGEMENT

• E = EXISTENCE

SOFP •
•
•
V= VALUATION
C= COMPLETENESS
R= RIGHTS & OBLIGATIONS

• C=COMPLETENESS

SOPL
• O=OCCURRENCE
• C= CUT-OFF
• C= CLASSIFICATION
• A= ACCURACY

Prepared by:- Ahmed Mumtaz

 EVIDENCE=DADA3

D = DIRECTORS A = ASSETS

A = ACCORDING
D= DOCUMENTS
BOOKS & RECORDS

3 = 3rd PARTIES
(BANK, LAWYER,
DEBTORS, PAYABLES)

Prepared by:- Ahmed Mumtaz

WE WILL APPLY AEIOU ON DADA3 TO
VERIFY EVCR OR COCCA TO SCORE
ONE MARK.

Prepared by:- Ahmed Mumtaz

WHAT SHOULD BE YOUR
PLAN OF ACTION AFTER
WEBINAR? (CONCLUSION)
1- MTQ’S from both kits with Solutions.
2- Prepare the questions which we did in Webinar.
3- Prepare your notes for the sake of preparing
knowledge-based area.
4- 5 Q's = RISK
5 Q’s= Control
10 Q’s= Substantive procedures
5- Typing, Typing, Typing ...

Prepared by:- Ahmed Mumtaz

 What Should be your plan of
Action after WEBINAR?
1- MTQ’S from both kits with Solutions.

2- Prepare the questions which we did in Webinar.

3- Prepare your notes for the sake of preparing straightforward knowledge based area.

4- 5 Questions = Risk
5 Questions= Control
10 Questions= Substantive procedures

6- Plan your Mock Exams

7- Typing, Typing, Typing ...

Prepared by:- Ahmed Mumtaz

Thank you for your patience, good luck!
You can reach me via WhatsApp:
AHMED +92 3455191065

Prepared by:- Ahmed Mumtaz