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Big data

Big data is part of the Performance Management syllabus. But what exactly is big data? Big data is part of the Performance Management syllabus. What is big data? There are many definitions of the term ‘big data’ but most suggest something like the following: ‘Extremely large collections of data (data sets) that may be analysed…

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Auditing in a computer-based environment (2)

The aim of this article is to help students improve their understanding of computer-assisted techniques by giving practical illustrations of computer-based controls and the way they may feature in exam questions. Relevant to Foundation level Paper FAU and ACCA Qualification Papers F8 and P7 (Int and UK) The accounting systems of many companies, large and…

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Analytical procedures

To obtain audit evidence, the auditor performs one – or a combination – of the following procedures: inspection observation external confirmation inquiry reperformance recalculation analytical procedures. It is mandatory that the auditor should perform risk assessment for the identification and assessment of risks of material misstatement at the financial statement and assertion level, and the…

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Audit working papers

How working papers provide evidence that an effective, efficient, and economic audit has been carried out. This article is about audit working papers. Auditors should prepare and organise their working papers in a manner that helps the auditor carry out an appropriate audit service. The auditor should avoid preparing or accumulating unnecessary working papers, and…

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ISA 330 and responses to assessed risks

Relevant to ACCA Qualification Paper F8 This article considers the requirements of ISA 330, The Auditor’s Responses to Assessed Risks. The main objective of ISA 330 is to give guidance on how auditors should obtain sufficient appropriate evidence regarding the assessed risks of material misstatement by designing and implementing appropriate responses to those risks. UK…

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Auditing in a computer-based environment

This article provides guidance on various aspects of auditing in a computer-based accounting environment. Relevant to Foundation level Paper FAU and ACCA Qualification Papers F8 and P7 Specific aspects of auditing in a computer-based environment Information technology (IT) is integral to modern accounting and management information systems. It is, therefore, imperative that auditors should be…

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Subsequent events

This article considers how subsequent events can affect an entity’s financial statements, and discusses the auditing requirements AA candidates need to know. Students of financial reporting and auditing papers will have to gain an understanding of how subsequent events (also known as ‘events after the reporting period’) affect the financial statements of an entity. This…

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Audit risk

This article outlines and explains the concept of audit risk, making reference to the key auditing standards which give guidance to auditors about risk assessment Relevant to FAU, F8 and P7 Identifying and assessing audit risk is a key part of the audit process, and ISA 315, Identifying and Assessing the Risks of Material Misstatement…

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Going concern

It is essential that candidates preparing for the Audit and Assurance (AA) exam understand the respective responsibilities of auditors and management regarding going concern. This article discusses these responsibilities, as well as the indicators that could highlight where an entity may not be a going concern, and the reporting aspects relating to going concern. Candidates…

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ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment

One of the major revisions of ISA 315 relates to the inquiries made by external auditors of the internal audit function since internal auditors have better knowledge and understanding of the organisation and its internal control. This article addresses and highlights the components of internal control The International Auditing and Assurance Standards Board (IAASB) issues…

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The control environment of a company

The purpose of this article is to provide candidates with a more detailed appreciation of matters pertinent to an auditor, focusing on the need for the auditor of a large limited liability company (in the UK – a limited company) to evaluate the effectiveness of the company’s control environment ISA 315, Identifying and Assessing the…

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Using the work of internal auditors

Can internal auditors be used to provide direct assistance to the external auditor for purposes of audit? Relevant to ACCA Qualification exams AA and AAA International Standard on Auditing (ISA) 610, Using the Work of Internal Auditors was revised and published in 2013. This standard focuses on whether the external auditor can use the work of the…

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How to approach performance appraisal questions

Guidance on how to approach performance appraisal questions. Performance appraisal is an important topic in Financial Reporting (FR). This article is intended to give candidates some guidance as to what is expected from a good answer to performance appraisal questions and how to approach such questions. The scenario of a performance appraisal question can take…