Planning and Conducting an Audit of Historical Financial Information
Business risk, materiality, audit risk, group audits, evidence, estimates, experts, data and procedures.
How to study ACCA Strategic Professional
Build professional judgement around case evidence, complete EPSM early, practise ACCA's live CBE tools and focus your final Options work on the two exams you will actually enter.
Core concepts
Concept 1
Planning translates business and financial-statement risks into assertion-level responses and an overall audit strategy.
Exam cue: Write audit risks as fact, accounting or control implication, and potential misstatement.
Concept 2
Sufficient appropriate evidence depends on relevance, reliability, source, nature, timing and extent.
Exam cue: Design a procedure with action, evidence source and purpose.
Concept 3
Complex groups, estimates, technology and experts require direction, evaluation and sceptical challenge.
Exam cue: Link materiality and assessed risk to the nature, timing and extent of work.
Risk pitfalls and guardrails
Writing business risks without financial-statement consequences.
Guardrail: Do not reproduce a model, calculation, tax rule, reporting treatment or audit phrase without checking version, date, evidence, professional skill and decision context.
Offering vague procedures such as check the invoice.
Guardrail: Do not reproduce a model, calculation, tax rule, reporting treatment or audit phrase without checking version, date, evidence, professional skill and decision context.
Treating an expert's work as automatically reliable.
Guardrail: Do not reproduce a model, calculation, tax rule, reporting treatment or audit phrase without checking version, date, evidence, professional skill and decision context.
Memory anchors
Audit risk
Case fact, relevant rule, account or disclosure, assertion and misstatement.
Procedure
Use a precise verb, identify evidence and state what the work tests.
Materiality
Set, revise and apply materiality using magnitude, nature and aggregation risk.
Estimate
Challenge method, assumptions, data, bias, sensitivity and disclosure.
Group audit
Understand components, direct their work, communicate and evaluate sufficient appropriate evidence.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
Revenue grows 35% in the final month while cash receipts and dispatch records do not. Which assertion is at greatest risk?
Why is materiality set below overall financial-statement materiality for performance purposes?
Answer all questions to submit.
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