ACCA AAA Advanced Audit and Assurance Additional information relevant in the evaluation of audit risk. Kindly note that the content’s of this lecture support note is the summary of the past ACCA exams. The purpose of this note is to provide my students with an insight to write their examination properly and it is not meant for any kind of commercial purpose. This is not a substitute for the complete textbook, so please use this note for the final revision and practice revision kit of ACCA approved publishers for good results. Alan Biju Palak ACCA AAA - Copies of working papers from the previous auditor to perform testing on opening balances. - Revenue recognition policy to ensure appropriate recognition of sales. - Details of experience and qualifications of the staff (director or any other person) to assess competence. - Breakdown of cost of sales and operating costs ( or any other items) to review for - A disaggregation of the main categories of expenses included in operating expenses, which would confirm that the impairment loss (or any other expense) has been included. - A breakdown of current liabilities/ (current assets) to establish the reasons for the decrease/(increase) as compared with the prior year. - Details of the loan taken out, including a copy of the new loan agreement to establish the interest rate payable, repayment terms and whether any borrowing costs other than interest were incurred. - Any information available in relation to the flotation, for example, investor prospectus, pre- and post-flotation press releases, communications with the stock exchange registrar. - A breakdown of current assets so the individual figures for inventories, receivables and cash (and any other current assets recognised in the statement of financial position) can be identified and trends established. - In respect of the manufacturing locations/ company warehouses, details of inventory count instructions followed, results of inventory counts, details from management of the monitoring of inventory counts performed by them, and any issues encountered during the counts, to ascertain the risk of misstatement of inventory. - A full set of forecast financial statements including a statement of cash flows to assess the working capital issues faced by the company. - Copies of agreements with the bank ( or any other creditor) so that terms of credit can be verified and to assess their possible impact on the financial statements . Tap the link for any queries - alanbiju31@gmail.com 1 of 3 Lecture support notes by Alan Biju Palak misclassification between proper accounts. ACCA AAA - Legal documentation for the purchase of associate should be reviewed, including voting rights acquired, to determine the extent to which control can be exercised by parent as this will impact the treatment in the financial statements. - Information on the background and experience of the new non- executive directors and the new finance director, for example, their professional qualifications and previous employment or directorships held. information on the valuer such as their professional qualification and relationship with the company and a copy of the valuation report. - Details of the internal auditor’s qualifications and experience should be obtained and reviewed to assess their competence before relying on their work. - Notes of discussions held with internal audit to assess whether there are any other fraud risks of which they are aware which could impact our audit approach. - Due diligence report for the potential acquisition. - Details of the potential acquisition of the company such as the likely completion date. If the acquisition is completed before the auditor’s report is signed it will need to be disclosed as a non-adjusting event and will therefore impact our subsequent events procedures. - Details of the stock exchange listing during the year including the terms of the flotation, number of equity shares issued and amount of equity capital raised. - Information on the specific listing rules relevant to the stock exchange, for example, the corporate governance code and disclosures necessary in company annual reports and financial statements. - To determine appropriate revenue recognition in accordance with IFRS 15, a sample of contracts with customers should be reviewed, to assess whether the Income should be deferred, and over what period, or whether it should be recognised immediately. - Details on the planned foreign stock exchange listing , including the jurisdiction, the strategic rationale for seeking the listing and proposed timescales. Tap the link for any queries - alanbiju31@gmail.com 2 of 3 Lecture support notes by Alan Biju Palak - Details on the valuation (of properties) including the date of the revaluation and ACCA AAA - Internal audit reports should be reviewed to evaluate findings and determine whether the work of the internal audit department is adequate for audit purposes. - Documentation on the cash-settled share-based payment scheme to gauge the number of Please click here or scan the QR code or log on to facebook/Alan Biju Palak to download lecture videos and lecture support notes for Audit Risk, Business risk, Additional information and summary notes for AAA. Tap the link for any queries - alanbiju31@gmail.com 3 of 3 Lecture support notes by Alan Biju Palak members of the scheme and its potential materiality to the financial statements.
