The audit process has many stages and it takes time. This is for good reason. The end result is crucial for many decisions made by the entity’s management, the shareholders, and many other stakeholders. The opinion on whether the financial statements are true and fair needs to be the right one. Exam preparation should be given comparative time and attention so that the end goal for the exam process is a successful one.
Acceptance
Auditors must decide whether to accept the assignment, or, if it is an existing client, continue for the current period. They must consider factors such as time restraints, resources available, expertise required, and potential ethical threats causing complications.
The first stage of an exam process is making sure you are ready to start this process. Are you mentally prepared for the paper you are considering, and do you have the time, resources, and expertise on hand to complete this?
Engagement
Auditors must outline an agreement with their client, confirming responsibilities of both the client and the auditor.
If you are beginning your studies, have you agreed how? What resources are you going to use? Have you decided on a learning provider? Book the resources you need and book the exam you are taking. Commit!
Planning
Auditors must plan effectively to ensure they have identified the risks, the deadlines required and considered the work needed.
Guess what! You need to plan the exam process with the same approach. How long do you have till the exam? How much time are you going allow for revision? How much time do you have per week to study with your other commitments? What could go wrong during the study period and do you need an expert to help you?
Assess Controls and Systems
The auditor must assess how reliable the controls and systems are for the entity being audited. This will help them decide how much additional audit work is needed. The stronger the client controls, the less substantive audit work is required. After all, there would be a reduced risk of material misstatements present in the financial statements.
Do you have lectures to attend or watch? Do you have a tutor to help you and reduce time pouring over the tricky parts of the syllabus? How strong is your control system to prevent you taking longer to complete the process and fail the exam?
Substantive Audit Procedures
The fieldwork. The auditor must carry out audit procedures on the balances and disclosures within the financial statements. The aim is to identify material misstatements, so the financial statements show a true and fair view.
Your fieldwork is your study time. Be methodical. Create your own summarised notes of each chapter. Practice questions, even during the tuition phase. Carry out regular, bitesize, study sessions. Create evidence that confirms you have done the work needed!
Finalisation and Review
At this stage of the audit process, it is time to reflect on the work completed so far. Is it sufficient and appropriate? The auditor also completes specific work designed for the final stages such as written representations, subsequent event and going concern reviews.
At this stage of the exam process, you should be revising. Reviewing notes prepared during the tuition phase is part of it, but exam practice is the bulk. If your exam is a CBE, you must use the technology, so you are prepared for the exam you are sitting. You must also practice exam questions to time. This is the last hurdle. Make it count.
The Audit Report
This is the final stage of the audit process. The work is complete, and the Engagement Partner now has the task of deciding and reporting on whether the financial statements are true and fair, or not!
The final stage of the exam process is exam day. You now have the task of recalling everything you have learnt to answer the exam questions you have been given. The better the exam process, the easier this day becomes. Did you do enough? How good is your process?