ACCA P7 - Advanced Audit And Assurance (INT) Study Text
Paper P7Advanced Audit and Assurance (International)This ACCA Study Text for Paper P7 AdvancedAudit and Assurance (International) has beencomprehensively reviewed by the ACCA examiningteam. This review guarantees appropriate depthand breadth of content and comprehensive syllabuscoverage.April 2015 32.00ACP7(INT)ST15 (RICOH).indd 1-3For exams from 1 September 2015 to 31 August 2016BPP House142-144 Uxbridge RoadLondon W12 8AAUnited KingdomT 0845 075 1100 (UK)T 44 (0)20 8740 2211 (Overseas)E Learningmedia@bpp.combpp.com/learningmedia A user-friendly format for easy navigation Exam focus points describing what the examiningteam will want you to do Regular Fast Forward summaries emphasising thekey points in each chapter Questions and quick quizzes to test yourunderstanding A practice question bank containing examstandard questions with answers A full index All you need in one bookStudy TextContact usIn addition to ACCA examining team reviewedmaterial you get:Advanced Audit and Assurance (International)BPP Learning Media is dedicated to supporting aspiring business professionalswith top-quality learning material as they study for demanding professionalexams, often whilst working full time. BPP Learning Media’s commitmentto student success is shown by our record of quality, innovation and marketleadership in paper-based and e-learning materials. BPP Learning Media’s studymaterials are written by professionally qualified specialists who know frompersonal experience the importance of top-quality materials for exam success.ACCA P7ACCA approved content providerACCA APPROVEDCONTENT PROVIDERACCA ApprovedStudy TextPaper P7Advanced Audit and Assurance(International)Study Text for exams from1 September 2015 to 31 August 2016Free accessto our ExamSuccess siteLook inside31/03/2015 11:28
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STUDYPAPER P7ADVANCED AUDIT ANDASSURANCE(INTERNATIONAL)BPP Learning Media is an ACCA Approved Content Provider. This means we workclosely with ACCA to ensure this Study Text contains the information you need to passyour exam.In this ACCA examination-team reviewed Study Text, we: Highlight the most important elements in the syllabus and the key skills you need Signpost how each chapter links to the syllabus and the Study Guide Provide lots of exam focus points demonstrating what is expected of you in the exam Emphasise key points in regular fast forward summaries Test your knowledge in quick quizzes Examine your understanding in our practice question bank Reference all the important topics in our full indexBPP's Practice & Revision Kit also supports this paper.FOR EXAMS FROM 1 SEPTEMBER 2015 TO 31 AUGUST 2016TEXT
First edition 2007Eighth edition April 2015ISBN 9781 4727 2685 8(Previous ISBN 9781 4727 1091 8)e-text ISBN 9781 4727 2763 3British Library Cataloguing-in-Publication DataA catalogue record for this bookis available from the British LibraryAll our rights reserved. No part of this publication may bereproduced, stored in a retrieval system or transmitted, inany form or by any means, electronic, mechanical,photocopying, recording or otherwise, without the priorwritten permission of BPP Learning Media Ltd.We are grateful to the Association of Chartered CertifiedAccountants for permission to reproduce pastexamination questions. The suggested solutions in thepractice answer bank have been prepared by BPPLearning Media Ltd, unless where otherwise stated.Published byBPP Learning Media LtdBPP House, Aldine PlaceLondon W12 8AAwww.bpp.com/learningmediaPrinted in the UK byRICOH UK LimitedUnit 2Wells PlaceMersthamRH1 3LGYour learning materials, published by BPP LearningMedia Ltd, are printed on paper obtained fromtraceable sustainable sources. BPP Learning Media Ltd2015ii
ContentsPageIntroductionHelping you to pass . vStudying P7 . viiThe exam paper . xiiiSyllabus and study guide. xviPart A Regulatory environment1International regulatory environments for audit and assurance services . 3Part B Professional and ethical considerations23Code of ethics and conduct . 35Professional liability. 69Part C Practice management45Quality control. 99Obtaining and accepting professional appointments . 113Part D Audit of historical financial information67891011Planning and risk assessment . 137Evidence. 185Evaluation and review (I) . 221Evaluation and review (II) – matters relating to specific accounting issues. 255Evaluation and review (III) – matters relating to specific accounting issues. 281Group audits and transnational audits . 321Part E Other assignments1213141516Audit-related services and other assurance services. 355Prospective financial information (PFI). 385Forensic audits. 399Social, environmental and public sector auditing . 411Internal audit and outsourcing. 441Part F Reporting17Reporting. 459Part G Current issues and developments18Current issues . 485List of articles by the examining team . 501Practice question and answer bank . 505Index. 587Review formContentsiii
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Helping you to passBPP Learning Media – Approved Content ProviderAs ACCA's Approved Content Provider, BPP Learning Media gives you the opportunity to use studymaterials reviewed by the ACCA examination team. By incorporating the examination team's commentsand suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media StudyText provides excellent, ACCA-approved support for your studies.The PER alertBefore you can qualify as an ACCA member, you not only have to pass all your exams but also fulfil a threeyear practical experience requirement (PER). To help you to recognise areas of the syllabus that youmight be able to apply in the workplace to achieve different performance objectives, we have introducedthe 'PER alert' feature. You will find this feature throughout the Study Text to remind you that what youare learning to pass your ACCA exams is equally useful to the fulfilment of the PER requirement.Your achievement of the PER should now be recorded in your online My Experience record.Tackling studyingStudying can be a daunting prospect, particularly when you have lots of other commitments. The differentfeatures of the Text, the purposes of which are explained fully on the Chapter features page, will help youwhile studying and improve your chances of exam success.Developing exam awarenessOur Study Texts are completely focused on helping you pass your exam.Our advice on Studying P7 outlines the content of the paper, the necessary skills you are expected to beable to demonstrate and any brought forward knowledge you are expected to have.Exam focus points are included within the chapters to highlight when and how specific topics have beenexamined, or how they might be examined in the future.Using the Syllabus and Study GuideYou can find the Syllabus and Study Guide on page xvii to xxviii of this Study Text.Testing what you can doTesting yourself helps you develop the skills you need to pass the exam and also confirms that you canrecall what you have learnt.We include Questions – lots of them – both within chapters and in the Practice Question Bank, as well asQuick Quizzes at the end of each chapter to test your knowledge of the chapter content.Introductionv
Chapter featuresEach chapter contains a number of helpful features to guide you through each topic.Topic listTopic listSyllabus referenceTells you what you will be studying in this chapterand the relevant section numbers, together withACCA syllabus references.IntroductionPuts the chapter content in the context of thesyllabus as a whole.Study guideLinks the chapter content with ACCA guidance.Exam guideHighlights how examinable the chapter content islikely to be and the ways in which it could beexamined.Knowledge brought forward from earlier studiesWhat you are assumed to know from previousstudies/exams.FAST FORWARDSummarises the content of main chapter headings,allowing you to preview and review each sectioneasily.ExamplesDemonstrate how to apply key knowledge andtechniques.Key termsDefinitions of important concepts that can oftenearn you easy marks in exams.Exam focus pointsTell you when and how specific topics have beenexamined, or how they may be examined in thefuture.Formula to learnFormulae that are not given in the exam but whichhave to be learnt.This is a new feature that gives you a usefulindication of syllabus areas that closely relate toperformance objectives in your PracticalExperience Requirement (PER).viIntroductionQuestionEssential practice of techniques covered in thechapter.Case StudyReal world examples of theories and techniques.Chapter RoundupA full list of the Fast Forwards included in thechapter, providing an easy source of review.Quick QuizA quick test of your knowledge of the main topicsin the chapter.Practice Question BankFound at the back of the Study Text with morecomprehensive chapter questions. Crossreferenced for easy navigation.
Studying P7As the name suggests, this paper examines advanced audit and assurance topics. Paper P7 is one of theprofessional level Options papers and as such candidates must consider carefully whether they have therequired competencies.The P7 examination teamThe examination team expects you to demonstrate a highly professional approach to all questions – notjust presenting information in a professional manner, but also integrating knowledge and understandingof topics from across the syllabus. The examination team is also very keen for students to demonstrateevidence of wider reading and to demonstrate an understanding of current issues as they affect audit andassurance. At the absolute minimum you should read Student Accountant. The examination team oftenexamines topics that it has written about in Student Accountant.Syllabus updateThe P7 syllabus has been updated for the September 2015 sitting onwards. The full syllabus and StudyGuide can be found in this Study Text on pages xvii to xxviii.1 What P7 is aboutThe aim of the syllabus is to analyse, evaluate and conclude on the assurance engagement and other auditand assurance issues in the context of best practice and current developments.The paper builds on the topics covered in Paper F8 Audit and Assurance but as an advanced paper it testsmuch more than just your knowledge of ISAs and your ability to list standard audit procedures. You mustbe able to apply your knowledge to more complex audit and assurance scenarios, identifying andformulating the work required to meet the objectives of audit and non-audit assignments and to evaluatethe findings and results of work performed. Accounting knowledge examined in Paper P2 CorporateReporting is also assumed. Therefore, candidates studying for P7 should refer to the AccountingStandards listed under P2.The syllabus is divided into seven main sections:(a)Regulatory environmentThis section introduces the legal and regulatory environment including corporate governanceissues. It also examines the topics of money laundering and the consideration of laws andregulations.(b)Professional and ethical considerationsThe details of the various ethical codes should be familiar to you from your earlier studies,however the importance of this topic should not be underestimated. The examination team hasindicated that ethical and professional issues are likely to feature in every sitting. This section alsocovers fraud and professional liability, both of which are topical issues.(c)Practice managementThis part of the syllabus covers quality control, tendering and professional appointments. It alsocovers advertising, publicity, obtaining professional work and fees.(d)Audit of historical financial informationThis is the largest section of the syllabus looking in detail at the procedures involved in a range ofaudit and assurance assignments. The examination team has indicated that evidence gathering is akey part of the syllabus and is likely to feature at each sitting. Requirements are likely to focus onspecific assertions, balances or transactions.(e)Other assignmentsThis section also covers a range of audit-related and assurance services. The examination teamhas stressed the need for candidates to be able to tackle these types of scenario.Introductionvii
(f)ReportingThe detail of audit reports should be familiar to you from your earlier studies. At this level you willbe expected to apply this knowledge to more complex scenarios. The examination team has alsostressed the importance of the relationship between financial reporting and auditing. This will beparticularly important when forming an appropriate audit opinion. This section of the syllabus alsoincludes reports to management and other reports.(g)Current issues and developmentsCurrent issues and developments includes a wide range of topics including the IAASB clarityproject, professional, ethical and corporate governance, information technology, going concern,transnational audits and social and environmental auditing. The examination team has indicatedthat this is likely to be examined at each sitting, and that candidates are expected to have readaround the issues for themselves. You will need to be able to discuss current issues topics in thecontext of a client scenario.2 Skills you have to demonstrate2.1 Knowledge and applicationEven with exams you've previously taken, you'll remember that passing didn't only mean reproducingknowledge. You also had to apply what you knew. At Professional level, the balance is tilted much moretowards application. You will need a sound basis of technical knowledge. The exams will detect whetheryou have the necessary knowledge. However, you won't pass if you just spend your time acquiringknowledge. Developing application skills is vital.2.2 Application skills A thorough understanding of the relevant audit, assurance and financial reporting regulations thatfall within the syllabus The ability to apply knowledge to specific client scenarios T
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ACCA F9 –Financial Management PROFESSIONAL (5 papers in total) Essentials ACCA P1 –Governance, Risk and Ethics ACCA P2 –Corporate Reporting ACCA P3 –Business Analysis Options (two to be completed) ACCA P4 –Advanced Financial Management ACCA P5 –Advanced Performance Management ACCA P6 –Advan
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Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community SYLLABUS 1. Overall aim To develop knowledge and understanding of the process of carrying out the assurance engagement and its application in the context of the professional regulatory framework. 2.
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