AUDIT AND ASSURANCE 2014 SHORT-FORM QUESTIONS

By the examiners
With the introduction of the latest evolution of the ACA, the Audit and Assurance module continues
at the Professional Level (previously Professional Stage) in its current form. The syllabus continues
to be made up of four core areas with the following weightings:
Syllabus area
1 Legal and other professional regulations, ethics and current issues
2 Accepting and managing engagements
3 Planning engagements
4 Concluding and reporting on engagements

Weighting (%)
20
15
40
25
100

The technical knowledge required for the Audit and Assurance exam also remains largely
unchanged but with the inclusion of International Standard 3410 Greenhouse Gas Statements,
examined at level C, and the FRC Briefing Paper: Professional Scepticism - establishing a
common understanding and reaffirming its central role in delivering audit quality, examined at level
B. These two new technical areas are outlined in the ICAEW Audit and Assurance study manual.
There are no changes to the detailed learning outcomes in the syllabus for this module; students
studying for the Audit and Assurance module under the new syllabus should continue to use
previous exam papers in preparation for the exam.
This is true for both the short-form and long-form questions practising past exam questions is an
excellent way to prepare for the real thing! This should include both practising the exam question
under timed conditions and a careful review of the published mark plan.
Short-form questions
Dont neglect to practise short-form questions, they are worth 20% of the marks and through 2013
the examiners noted a trend of weaker performance in answers to short-form questions, compared
with the written test questions. This suggests that question practice in this area was frequently
neglected.
When reviewing your answers to short-form questions pay attention not only to the content of your
answer but also to its format and volume. One of the most common issues seen in candidates'
answers to short-form questions is the failure to answer the question succinctly and in note form
(which is specifically required in the instructions for this section of the exam paper). This
significantly increases the risk of running over the time available (30 minutes) for completing the
short-form questions and may leave you with insufficient time for the remainder of the paper.
Additionally, providing long answers to short-form questions is unlikely to earn you any additional
marks. As an example, consider the answers of two candidates in respect of SFQ 1 in the
December 2013 exam:
Question:
Jane Harp is the engagement partner responsible for the external audit of Oboe plc (Oboe), a
listed company. Jane is due to be rotated off the audit team as she has been the engagement
partner for the last five years. However, following the unexpected resignation of Oboes finance
director, the audit committee has requested that Jane continues as engagement partner.
State, with reasons, how Janes firm should respond to the audit committees request. (3 marks)
Both candidates scored 1 marks for their answer:
ICAEW 2014

Candidate 1s answer

Candidate 2s answer

Candidate 1 has had to work much harder and has presumably taken longer to earn 1 marks
compared with candidate 2. Note that common abbreviations are acceptable, such as EQCR
(engagement quality control review) seen in candidate 2s answer. The December 2013 detailed
mark plan demonstrates the examiners expectations in relation to answers in note form:
Jane may continue as engagement partner
To maintain audit quality
ES3 permits when there are unexpected changes in the senior management of the
audited entity
With safeguards
And no ongoing familiarity threat
Only for an additional 2 years/no longer than 7 years
Expanded review of audit work required
By the engagement quality control reviewer or an audit partner not involved in the audit
Facts and reasons to be disclosed to shareholders as early as practicable
If no disclosure to shareholders, should refuse the request
Writing succinctly and in note form is a critical success factor in the short-form questions you can
get better at this with careful practice and review of the short-form questions from previous exam
papers.
More details on the Professional Level examinations can be found on the ICAEW student
resources page.

ICAEW 2014