Finding the Point

[Lightwarrior]

Hi

What is the first thing to learn in Audit and how to start the preperation of the subject?



Thanks

Lightwarrior!

[Vandana]

Hi there,

I think the first point is to understand WHY an audit has to be done. Imagine you were left £100,000 by your great Aunt Sammy. The same day one of your friends, Tara, came to you and said she needed £100,000 for her business and could you become a shareholder in her business. If you give her that money, you may not have time to track what she is doing and how her business is doing. So you need someone independent and credible to assure you that her income statement (i.e. sales less expenses) is reasonably stated. That means that Tara has really made the sales that she is showing in her books, and that they are not over stated or understated. She really has got the assets she says she has etc etc.

Once you have understood that point, try to look at the financial statement assertions. For each assertion, try to understand why it is needed, from an investors point of view, and therefore what an auditor is looking for. I hope this helps.

Regards, Vandana

[Acid]

Thank you Vandana . This forum is really useful . I bought the GTG Keynotes and they are the best notes for ACCA students.


Lightwarrior

[hrinkaa]

Hi, this is hrinkaa.

I am unsure about other countries, but in India, Cost Accountants cannot sign Financial Statements, Income Tax returns, or appear before tribunals, done by Chartered, when however Chartereds can do Cost Audits.

How is it in other countries, for example, can an ICAEW member do what an ACCA can do, though the reverse is not possible.

Study areas and contents are the same, the expected levels of knowledge is the same. In some cases, a question set in one institute exam is asked in another institute exam.

Will it not improve revenue and service opportunities for the practicing accountants, and increase healthy competition. Would it not increase the MNC firms.
There are only the big 4, why that number has not increased to double digits over the years?

Why this disparity.

[Vandana]

Hrinkaa,

You ask a great question! It is one that is on my mind a lot too. Basically in the UK, ACCA has just the same powers as an ICAEW. However, a CIMA qualified person can not sign off an audit report, because if you look at the CIMA syllabus, they do not have as much in there on financial reporting and auditing. However, an ICAEW and often an ACCA can do what a CIMA person does, because the majority of the CIMA syllabus is included in the other's syllabus. I should caveat this and say that CIMA does infact have risk management and other strategic areas that are NOT covered in ICAEW or ACCA, BUT are not essential to neccessarily running a business, so therefore people assume that an ICAEW or ACCA can actually do the job.

Whilst the study areas may be the same between 2 accountancy bodies, the emphasis of the questions may be very very different. Also, generally the UK qualifications require a higher amount of strategic thinking and want the student to answer the question as if they are writing a report to a client. This tests very different skills, which are actually much more needed in business.

There are 4 big accounting firms and 2 larger ones, which are often now placed with the 4 big ones - that is Grant Thornton and BDO. It is strange that there are not many more, but I guess it is all to do with reputation. Remember Arthur Andersen disappeared off the face of the earth because people lost trust in them after Enron. If you look at the revenues of the larger firms, they are tremendous! It would take a lot for the No 8 firm to catch up with the Big 4!

We at GTG are campaigning hard for there to be more recognition of global accountancy qualifications (especially in India) across the world. These qualifications help people improve their careers, and more important improve their strategic thinking, which is where I believe ACCA wins hands down. You really are industry ready if you pass the exams and have learnt the material to use in real life.

Hope this helps! Vandana

[hrinkaa]

Cheers Vandana,

I have never seen a group where such high level, clear and concise, and lateral thinking exists, and you lead us by example.

One highlighting event for me of 2008 is GTG enrolling.

I have industrial experience of 14 years, and i seem to have lost time in writing my ACCA exams. I have not written since 3 years, primarily due to no trainers and reference books.

With GTG, I have a feeling I will make up for lost time and stop giving excuses.

Hrinkaa

[Vandana]

Hi Hrinkaa,

I am so happy to see what you wrote! The main reason we decided to set up GTG was for students like you, who may not have the funds or the ability to access tuition or materials. We really wanted to make a quality and affordable product and offer students a great service. So it means a lot to know that we are helping you!

Please do keep studying and GET THROUGH! You will help change India for the better!!!

Vandana

[karinka8]

who to prepare the working paper

[Acid]

The Audit Team prepares the working papers

[alan268]

Hi there,

I think the first point is to understand WHY an audit has to be done. Imagine you were left £100,000 by your great Aunt Sammy. The same day one of your friends, Tara, came to you and said she needed £100,000 for her business and could you become a shareholder in her business. If you give her that money, you may not have time to track what she is doing and how her business is doing. So you need someone independent and credible to assure you that her income statement (i.e. sales less expenses) is reasonably stated. That means that Tara has really made the sales that she is showing in her books, and that they are not over stated or understated. She really has got the assets she says she has etc etc.

Once you have understood that point, try to look at the financial statement assertions. For each assertion, try to understand why it is needed, from an investors point of view, and therefore what an auditor is looking for. I hope this helps.

Regards, Vandana

Hi Vandana,

I'm from Singapore. May I check what is the different if I choose F8 International instead of F8 Singapore in my ACCA exam. Is it passing International papers are more value than the local papers?

Thks & Rdgs
Alan268

[Vandana]

The advantage of doing international is you have more opportunities of working in other countries as you are up to date on international standards.

I would definitely reccomend international if your aim is to work in more countries than just singapore. If you will stay there, then it makes sense to do the Singapore variant

Regards

[alan268]

The advantage of doing international is you have more opportunities of working in other countries as you are up to date on international standards.

I would definitely reccomend international if your aim is to work in more countries than just singapore. If you will stay there, then it makes sense to do the Singapore variant

Regards

Thanks! you are bravo!

[krishna3898]

Hi vandana,
Really no words to say thanks for you,because CEO of GTG,reply to all,and really encouraging reply,before buy GTG,i really suffer to much,even some time no many time I think to give up ACCA,but GTG,and this fourm really help me not only me all ACCA students,mainly indian student,because all other publisers very expensive,and you know without understanding I mugup the subject,finally GTG,is boon of ACCA students,.please keep it up.
and am always pray for you people.
Thanks.
krishna