ACCA Applied Skills · Paper AA
ACCA Applied Skills Audit and Assurance (AA) Study Guide
ACCA Audit and Assurance (AA) tests whether you can plan, perform and conclude an audit using ISAs. It is a three-hour computer-based exam out of 100 marks. Section A has three objective test cases. Section B has three written questions. You need 50% to pass.
AA tests how an auditor thinks. You must understand why an audit exists, how risk drives the work, and how evidence supports an opinion. The 28 chapters flow in order: concepts, ethics and governance, engagement acceptance, risk assessment, internal control, evidence and procedures, and finally completion and reporting. Later chapters rely on earlier ones, so gaps show up quickly.
The exam is a three-hour computer-based paper out of 100 marks, and all questions are compulsory. Section A has three 10-mark OT cases. Each is a scenario with five two-mark objective test questions, so 30 marks are objective. Section B has one 30-mark and two 20-mark constructed response questions, so 70 marks are written. Objective questions are marked all or nothing, with no penalty for a wrong answer. The pass mark is 50%.
Most marks are lost in the written section, not through lack of knowledge but through weak application. Students list textbook points that do not fit the scenario. Strong scripts link each point to a fact in the question: the client's business, its controls, its figures. Typical written tasks ask for audit risks, audit procedures, control deficiencies with recommendations, ethical threats and safeguards, or the effect of a matter on the auditor's report. Students who practise past questions under timed conditions usually score best, because the style of answer is a skill you build.
Audit and Assurance: chapters and topics
Audit framework and regulation
The concept of audit and other assurance engagements
Audit framework and regulation
External audits
Audit framework and regulation
Corporate governance
Audit framework and regulation
Professional ethics and ACCA's Code of Ethics and Conduct
Planning and risk assessment
Obtaining, accepting and continuing audit engagements
Planning and risk assessment
Objective and general principles
Planning and risk assessment
Assessing audit risks
Planning and risk assessment
Understanding the entity and its environment and the applicable financial reporting framework
Planning and risk assessment
Fraud, laws and regulations
Planning and risk assessment
Audit planning and documentation
- Preliminary Engagement Activities and Engagement Letters
- Understanding the Entity and Its Environment
- Audit Strategy and Audit Plan
- Materiality and Performance Materiality
- Audit Risk and Risk of Material Misstatement
- Analytical Procedures in Planning
- Fraud, Laws and Going Concern at Planning Stage
- Audit Documentation
Internal control
Systems of internal control
- Internal Control Systems and Their Components
- Control Environment and Corporate Governance Basics
- Control Activities and Types of Control
- Information Systems and IT Controls
- Internal Audit Function and Monitoring of Controls
- Evaluating Controls: Deficiencies and Reporting
- Documenting and Testing Systems; Tests of Control
Internal control
The use and evaluation of systems of internal control by auditors
- Internal Control Systems and Components
- Understanding the Entity's Internal Controls
- Control Activities and Control Procedures
- Evaluating Deficiencies and Reporting to Management
- Tests of Controls and Substantive Procedures
- Internal Controls in Computerised Environments
- Internal Audit and Governance Aspects of Control
Internal control
Tests of controls
Internal control
Communication on internal control
Internal control
Internal audit and governance and the differences between external audit and internal audit
- Corporate Governance Principles and Codes
- Audit Committee and Non-Executive Directors
- Internal Audit Function and Its Role in Governance
- Need for Internal Audit and Factors Affecting It
- Types of Internal Audit Assignments
- Differences Between External and Internal Audit
- Internal Audit Independence and Reporting
Internal control
The scope of the internal audit function, outsourcing and internal audit assignments
Audit evidence
Assertions and audit evidence
Audit evidence
Audit procedures
- Audit Procedures and Methods of Obtaining Evidence
- Sufficient Appropriate Audit Evidence
- Financial Statement Assertions and Evidence
- Tests of Controls and Substantive Procedures
- Audit Sampling and Selecting Items for Testing
- Analytical Procedures
- Audit Documentation and Working Papers
- Computer-Assisted Audit Techniques and Automated Tools
Audit evidence
Audit sampling and other means of testing
Audit evidence
The audit of specific items
Audit evidence
Automated tools and techniques
Audit evidence
The work of others
Audit evidence
Not-for-profit organisations
Review and reporting
Subsequent events
Review and reporting
Going concern
Review and reporting
Written representations
Review and reporting
Audit finalisation and the final review
Review and reporting
The Independent Auditor's Report
- Purpose and Structure of the Auditor's Report
- Unmodified and Modified Audit Opinions
- Material Misstatement vs Inability to Obtain Evidence
- Key Audit Matters
- Emphasis of Matter and Other Matter Paragraphs
- Going Concern and Material Uncertainty in the Report
- Other Information and Auditor's Report Responsibilities
How to prepare Audit and Assurance
Plan for steady practice rather than late memorising. AA rewards repeated question work, because you must apply knowledge to scenarios. Use this sequence.
- Learn the foundations first: the purpose of an audit, assurance engagements, corporate governance and the ACCA Code of Ethics. Be able to name the five fundamental principles and the types of threat and safeguard.
- Master risk assessment before anything else in the middle chapters. Understand business risk, inherent risk, control risk, detection risk and the risk of material misstatement, and how materiality is used. Most written questions start here.
- Study internal control as one connected block: systems, evaluation, tests of controls and communication. Practise spotting a control deficiency, stating its consequence and giving a specific recommendation.
- Learn evidence and procedures by assertion. For each major item (inventory, receivables, payables, non-current assets, cash), know what could go wrong and which procedure addresses it. Practise writing procedures that are specific, not vague.
- Cover the completion stages: subsequent events, going concern, written representations, final review and the auditor's report. Know when each modified opinion applies and what the report paragraphs must say.
- Cover the smaller topics so they do not surprise you: internal audit and outsourcing, sampling, automated tools and techniques, the work of others and not-for-profit organisations.
- Drill objective test cases in sets of five questions under a time limit. Review every wrong answer and note whether the cause was knowledge, misreading or rushing.
- Finish with full timed mock exams. Practise written answers using a clear layout, with one point per mark and each point tied to the scenario. Compare your answers with the examiner's approach and fix recurring weaknesses.
Time management in the exam
- The exam has 100 marks in 180 minutes, so allow about 1.8 minutes per mark. Use this to set a time limit for every question before you start it.
- Do not assume Section A is quick. Each OT case is worth 10 marks, so give it roughly 18 minutes, including reading the scenario once carefully.
- Answer every objective question, since a wrong answer costs nothing extra. If you are unsure, flag it, make your best choice and move on.
- In the written questions, read the requirements first, then the scenario. Underline facts that signal risks, deficiencies or ethical issues, and plan a short list before writing.
- Write one clear point per mark and stop when you have enough. A 20-mark question needs about 36 minutes, so do not spend extra time polishing a single point.
- Keep the last 10 to 15 minutes to return to flagged questions and to add missing points to any written answer you left short.
Mistakes that cost marks in Audit and Assurance
Writing generic textbook lists in written answers
Fix: Tie every point to a fact in the question. State the issue, why it matters for the audit, and what the auditor should do.
Giving vague audit procedures such as 'check the invoices'
Fix: Write procedures with an action, the item and the purpose, for example agreeing a sample of items to supporting documents to confirm an assertion.
Confusing risks with deficiencies and recommendations
Fix: Check the requirement. A risk is what could go wrong in the financial statements. A deficiency is a weakness in control. A recommendation is the fix. Keep them separate.
Mixing up business risk and risk of material misstatement
Fix: Business risk comes from the entity's objectives and environment. Only business risks that could cause material misstatement become audit risks. Explain that link.
Weak answers on ethics and the auditor's report
Fix: For ethics, name the threat, explain why it arises and give a practical safeguard. For reports, decide whether the matter is material and pervasive before choosing the opinion.
Neglecting objective test practice
Fix: Practise OT cases regularly. Read every option, remember that marking is all or nothing, and check that your answer meets all conditions in the question.
Audit and Assurance: frequently asked questions
How is the ACCA Audit and Assurance exam structured?
It is a three-hour computer-based exam out of 100 marks, and all questions are compulsory. Section A has three 10-mark OT cases, each with five two-mark objective questions. Section B has one 30-mark and two 20-mark constructed response questions.
What is the pass mark for AA?
The pass mark is 50%. Because 70 marks come from written answers, you need good application skills as well as knowledge.
Do I lose marks for wrong answers in the objective questions?
No. An incorrect answer scores zero and is not penalised further, but partial marks are not given. Answer every question.
Which topics matter most in AA?
Risk assessment, internal control, audit evidence and procedures, and the auditor's report are used heavily across both sections. Ethics and completion topics such as going concern and subsequent events also appear often. Study all chapters, since all questions are compulsory.
When can I sit the AA exam?
AA is a session exam held in March, June, September and December. Only limited variants are offered in March and September, and all variants in June and December. Check ACCA's current timetable before you book.