Advanced Audit and Assurance (AAA) is the thirteenth exam of your ACCA journey. Advanced Audit and Assurance (AAA) is also an optional exam. There are four optional exams in the ACCA professional level, Advanced Financial Management, Advanced Performance Management, Advanced Taxation, Advanced Audit and Assurance, students will be required to choose any two optional subjects.
Advanced Audit and Assurance builds upon your earlier studies in particular Audit and Assurance (AA) exam and aims to broaden the understanding of the students by giving them more knowledge, skills and technical proficiency in advanced audit areas allowing them to handle complex situations and scenarios with professionalism which is the mark of ACCA qualification. NCFM Academy Hyderabad is Known as a leader for ACCA Course in India Hyderabad Ameerpet provides ACCA Paper P7 Advanced Audit and Assurance.
Exam format
The syllabus is assessed by a three hour and fifteen minutes examination
The examination is constructed in two sections. Questions in both sections will be largely discursive. However, candidates will be expected, for example, to be able to assess materiality and calculate relevant ratios where appropriate.
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.
Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational and other relevant financial information for client business, as well as extracts from audit working papers, including results of analytical procedures.
Candidates will be required to address a range of requirements, predominantly from syllabus sections A, B, C, and D, thereby tackling a real-world situation where candidates may have to address a range of issues simultaneously in relation to planning, risk assessment, evidence gathering, and ethical and professional considerations. Please note that other syllabus areas, excluding E, may also be drawn on as part of the Case Study.
Four professional marks will be available in Section A and will be awarded based on the level of professionalism with which a candidate’s answer is presented, including the structure and clarity of the answer provided.
Section B will contain two compulsory 25 mark questions, with each being predominately based around a short scenario. One question will always predominantly come from syllabus section E, and consequently, candidates 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 candidates to assess going concern, the impact of subsequent events, evaluating identified misstatements and the corresponding effect on the auditor’s report.
Candidates 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 of ACCA Paper P7 Advanced Audit and Assurance
A- Regulatory Environment
This is the first section of this course and it covers the regulatory environment for audit and assurance, the need for a regulatory environment to oversee audit and assurance practice. This section also covers money laundering in much detail and builds upon the knowledge learned in F8 (AA). Students will be required to understand how money laundering affects materiality and the underlying assumptions of financial statements. How can money laundering be countered and the civil and criminal proceedings for money laundering and how can professional accountants be protected from such proceedings if they are not involved in any such activity.
Students will also need to understand the ethical and professional safeguards in place to help prevent and detect money laundering and the due diligence measures which need to be taken before engaging with potential clients.
Students will also be required to understand the responsibility of auditors and the respective management of clients concerning laws and regulations and the role and duty of an auditor in situations where non-compliance is discovered.
B- Professional and Ethical Considerations
This is the second section of this course and it covers the code of ethics for professional accountants. Students will be required to understand the threats to their independence and the safeguards available to them under the code to deal with such threats.
This section also covers fraud and errors. Students will be required to understand the procedures which must be planned in order to detect and identify possible fraud or errors during the course of an audit engagement and the response to fraud and error and the relevant authorities to whom such instances can be communicated.
This section also covers the professional liability of auditors. Students will be required to understand situations where auditors will be professional liable, ways in which the liability of auditors can be limited including limited liability agreements and the causes which lead to audit failure, resulting in professional liabilities and the measures which can be taken to mitigate those causes.
C- Quality Control and Practice Management
This is the third section of this course and it covers quality control and practice management. Students will understand the need for quality control in an audit engagement, the process of advertising, tendering and obtaining professional work and fee in a transparent manner which is not publicly damaging for the profession.
This section also covers the procedure for professional appointments.
D- Planning and conducting an audit of historical financial information
This is the fourth section of this course and it covers, planning, materiality and assessing the risk of material misstatement, evidence and testing considerations, audit procedures and obtaining evidence, using the work of others and group audits.
E- Completion, review, and reporting
This is the fifth section of this course and it covers subsequent events and going concern, completion and final review, auditor’s reports and reports to those charged with governance and management.
F- Other assignments
This is the sixth section of this course and it covers audit-related and assurance services, specific assignments, the audit of social, environmental and integrated reporting, the audit of performance information (pre-determined objectives) in the public sector and reporting on other assignments.
G- Current Issues and Developments
This is the seventh section of this course and it covers professional and ethical developments and other current issues.