http://freeaccastudymaterial.blogspot.com/ / t.c om sp o og bl ter ial dy ma stu Practice & Revision Kit Look inside ac ca Paper F8 Audit and Assurance Practice & Revision Kit for exams up to June 2015 Free access to our Exam Success site htt p:/ June 2014 £18.00 ACCA Approved /fr ee BPP House 142-144 Uxbridge Road London W12 8AA United Kingdom T 0845 075 1100 (UK) T +44 (0)20 8740 2211 (Overseas) E Learningmedia@bpp.com bpp.com/learningmedia • Banks of questions on every syllabus area • Answers with detailed guidance on approaching  questions • Three mock exams with full answers and guidance For exams up to June 2015 Contact us One of a suite of products supporting Paper F8 Audit and Assurance, for use independently or as part of a package, this Kit is targeted at ACCA’s exams up to June 2015 and contains: Practice & Revision Kit Paper F8 Audit and Assurance This Kit provides material specifically for the practice and revision stage of your studies for Paper F8 Audit and Assurance that has been comprehensively reviewed by the ACCA examining team This unique review ensures that the questions, solutions and guidance provide the best and most effective resource for practising and revising for the exam Audit and Assurance BPP Learning Media is dedicated to supporting aspiring business professionals with top-quality learning material as they study for demanding professional exams, often whilst working full time BPP Learning Media’s commitment to student success is shown by our record of quality, innovation and market leadership in paper-based and e-learning materials BPP Learning Media’s study materials are written by professionally qualified specialists who know from personal experience the importance of top-quality materials for exam success ACCA F8 ACCA approved content provider ACCA APPROVED CONTENT PROVIDER http://freeaccastudymaterial.blogspot.com/ ACF8(INT)RK14.indd 1-3 05/06/2014 15:15 co m/ http://freeaccastudymaterial.blogspot.com/ log sp o t P R A C T I C E l.b PAPER F8 ym ate ria AUDIT AND ASSURANCE tud BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA qualification This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams as In this Practice and Revision Kit, which has been reviewed by the ACCA examination team, we: Discuss the best strategies for revising and taking your ACCA exams  Ensure you are well prepared for your exam  Provide you with lots of great guidance on tackling questions  Provide you with three mock exams  Provide ACCA exam answers as well as our own for selected questions ea cc  htt p:/ /fr e Our Passcard and i-pass products also support this paper FOR EXAMS UP TO JUNE 2015 http://freeaccastudymaterial.blogspot.com/ & R E V I S I O N K I T log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ l.b First edition 2007 &JHIUI edition JVOF 201 ria ISBN 9781 4727 1105 (previous ISBN 9781 4453 6649 4) e-ISBN 9781 4727 1169 ate British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ym All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA as www.bpp.com/learningmedia tud Published by We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions The suggested solutions in the practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated © BPP Learning Media Ltd 2014 /fr e ea Ricoh UK Limited Unit Wells Place Merstham RH1 3LG cc Printed in the United Kingdom by htt p:/ Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable, sustainable sources ii http://freeaccastudymaterial.blogspot.com/ Contents co m/ http://freeaccastudymaterial.blogspot.com/ Page Finding questions log sp o t Question index v Topic index x Helping you with your revision xi Revising F8 l.b Topics to revise xii Question practice xii Passing the F8 exam xiii Exam information xvii Useful websites xviii Questions and answers ria Questions Answers 89 Exam practice ate Mock exam  Questions 321  A plan of attack 329  Answers .330 ym Mock exam  Questions 347  A plan of attack 357  Answers .358 tud Mock exam (Specimen paper)  Questions 375  A plan of attack 385  Answers .386 htt p:/ /fr e ea cc Review form as ACCA examiner's answers  Specimen paper 403 iii http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ A note about copyright Dear Customer log sp o t What does the little © mean and why does it matter? Your market-leading BPP books, course materials and e-learning materials not write and update themselves People write them: on their own behalf or as employees of an organisation that invests in this activity Copyright law protects their livelihoods It does so by creating rights over the use of the content Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a serious breach of professional ethics With current technology, things might seem a bit hazy but, basically, without the express permission of BPP Learning Media: l.b Photocopying our materials is a breach of copyright Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to Facebook or emailing them to your friends is a breach of copyright ria   ate You can, of course, sell your books, in the form in which you have bought them – once you have finished with them (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single user licence basis: we not supply ‘unlock’ codes to people who have bought them second-hand htt p:/ /fr e ea cc as tud ym And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can afford by local printing arrangements, pricing policies and partnerships which are clearly listed on our website A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that If they act illegally and unethically in one area, can you really trust them? iv Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Question index The headings in this checklist/index indicate the main topics of questions, but questions are expected to cover several different topics log sp o t Questions set under the old syllabus Audit and Internal Review (AIR) paper are included because their style and content are similar to those which appear in the F8 exam The questions have been amended to reflect the current exam format Page number Marks allocation Mins Question Answer MCQs 47 85 89 Audit regulation 10 18 90 Regulation and ethics 10 18 91 Assurance and regulation 10 18 92 Corporate governance 10 18 93 Ethical issues 10 18 94 10 18 95 10 18 96 International Standards on Auditing (AIR 6/06) (amended) 10 18 98 10 Jumper (AIR 6/06) (amended) ate Time 10 18 10 99 10 18 10 100 10 18 11 102 10 18 11 104 10 18 12 106 10 18 12 108 10 18 12 109 10 18 13 111 18 Serena (12/11) (amended) 10 18 13 113 19 Orange (6/12) (amended) 10 18 13 114 20 Internal audit function 10 18 14 116 21 Internal audit responsibilities 10 18 14 117 22 MonteHodge (6/08) (amended) 10 18 14 118 23 Avocado (6/12) (amended) 10 18 15 120 24 Wood Industries (AIR 6/05) (amended) 10 18 15 122 25 Regulations and limitations (12/12) (amended) 10 18 16 124 26 Brampton (12/09) 10 18 16 126 NorthCee (Pilot Paper) (amended) ym 11 Conoy (6/09) (amended) 12 Goofy (6/11) (amended) 14 Ethics 15 Code of Ethics and Conduct 16 Stark (12/08) (amended) htt p:/ /fr e ea cc as 17 Governance tud 13 LV Fones (6/10) (amended) ria True and fair, ISAs and assurance engagements (6/10) (amended) l.b Part A: Audit framework and regulation Finding questions http://freeaccastudymaterial.blogspot.com/ v http://freeaccastudymaterial.blogspot.com/ Page number co m/ Time Marks allocation Mins Question Answer 27 MCQs 41 74 17 129 28 Audit risk and planning 10 29 Interim audit 10 30 Audit planning 10 31 Mason Air Services 10 32 Bingsby 10 33 Risks and professional scepticism 10 34 Sleeptight 10 35 Materiality and documentation (12/10) (amended) 10 36 Interim v final audit (AIR 12/04) (amended) 10 37 Donald (6/11) (amended) 10 38 Bridgford Products 10 log sp o t Part B: Planning and risk assessment 21 130 18 21 131 18 21 132 18 22 133 18 22 134 18 23 136 18 23 137 18 24 139 18 24 140 18 24 142 18 25 144 10 18 25 145 10 18 26 148 10 18 26 149 10 18 27 151 20 36 27 152 20 36 28 154 20 36 29 158 20 36 29 160 20 36 30 163 20 36 31 166 20 36 32 171 36 65 33 175 51 Documenting internal controls (6/11) (amended) 10 18 37 176 52 Flowers Anytime (AIR 12/02) (amended) 10 18 37 178 53 North 10 18 37 179 10 18 38 180 55 ICQs and ICEQs 10 18 39 181 56 Smoothbrush (6/10) (amended) 10 18 39 182 57 Lily (12/12) (amended) 10 18 40 184 58 Shiny Happy Windows (6/10) 10 18 40 186 59 SouthLea (Pilot Paper) (amended) 10 18 41 188 ria l.b 18 40 Cardamom 41 South 42 Planning, analytical procedures and interim audit ym 43 Specs4You (AIR 6/07) 44 Tempest (AIR 12/05) 47 Redsmith (12/10) 48 Abrahams (12/11) as 49 Sunflower (12/12) tud 45 EuKaRe (12/08) 46 Serenity (AIR 12/06) (amended) ate 39 Cinnamon Part C: Internal control ea cc 50 MCQs htt p:/ /fr e 54 Value for money audit (AIR 12/06) (amended) vi Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Page number Marks allocation Mins Question Answer 60 Burton Housing 10 18 41 189 61 Matalas (12/07) (amended) 10 18 42 62 Bluesberry (12/10) (amended) 10 18 43 63 Chuck (12/11) (amended) 10 18 43 193 64 Rhapsody (AIR 6/07) (amended) 20 36 44 195 65 Fitta 20 36 45 198 66 Greystone (12/10) (amended) 20 36 45 200 67 Blake (12/08) (amended) 20 36 46 204 68 Tinkerbell (6/11) (amended) 20 36 47 206 69 Pear (6/12) (amended) 20 36 48 211 70 DinZee (12/07) (amended) 20 36 49 215 46 83 50 219 10 18 55 220 ate Time 10 18 55 221 10 18 55 222 10 18 56 223 10 18 56 224 10 18 56 225 10 18 57 226 79 Analytical procedures and bank confirmations (6/08) (amended) 10 18 57 228 80 Zak (6/08) (amended) 10 18 58 229 10 18 58 231 82 Rocks Forever (AIR 12/05) (amended) 10 18 58 231 83 Whizee (12/07) (amended) 10 18 59 233 84 CAATs (12/12) (amended) 10 18 59 234 85 Redburn (12/09) (amended) 10 18 60 236 86 Tirrol (6/09) (amended) 10 18 60 237 87 Obtaining evidence 10 18 61 239 88 Letham (12/09) (amended) 10 18 61 240 89 Springfield Nurseries (AIR Pilot Paper) (amended) 10 18 61 242 90 Duck (12/11) (amended) 10 18 62 243 91 Audit procedures 10 18 62 245 92 MistiRead (AIR 6/07) (amended) 10 18 62 246 71 MCQs 72 Expert (12/08) (amended) 73 Audit techniques 74 Evidence and assertions (12/09) (amended) 75 External confirmations ym 76 Accounting estimates 77 Porthos (AIR 12/05) (amended) htt p:/ /fr e ea cc as tud 78 Newthorpe 81 Perpetual inventory system 192 log sp o t l.b ria Part D: Audit evidence 190 Finding questions http://freeaccastudymaterial.blogspot.com/ vii http://freeaccastudymaterial.blogspot.com/ co m/ Marks allocation Mins Question Answer 93 First Light 10 18 63 248 94 Mickey 10 18 63 95 Panda (6/13) (amended) 10 18 63 96 Delphic (12/07) 20 36 64 252 97 Tam (AIR 12/06) (amended) 20 36 64 255 98 BearsWorld (AIR 6/05) 20 36 65 257 99 Wear Wraith (AIR 6/06) 20 36 66 260 100 Tracey Transporters (AIR 6/05) 20 36 67 262 101 Duckworth Computers 20 36 67 264 102 Metcalf (AIR 6/07) (amended) 20 36 68 266 103 Have a Bite (12/09) (amended) 20 36 69 269 104 FireFly Tennis Club (AIR 12/06) (amended) 20 36 69 272 105 Walsh (AIR 12/06) (amended) 20 36 70 274 20 36 71 276 20 36 72 280 20 36 72 283 46 83 74 284 110 Evaluating misstatements and responsibilities 10 18 78 285 111 Written representation and going concern (12/07) (amended) 10 18 78 287 112 Corsco (AIR 12/03) (amended) 10 18 79 289 113 Going concern and auditor's reports (AIR 12/03, amended) 10 18 79 290 114 Greenfields (12/10) (amended) 10 18 79 291 10 18 80 293 10 18 80 295 117 ZeeDiem (12/08) (amended) 10 18 81 296 118 Green (AIR 6/07) (amended) 10 18 81 298 119 Minnie (6/11) (amended) 10 18 82 300 120 Medimade (6/10) 10 18 82 302 121 Reporting (12/11) (amended) 10 18 83 304 122 Hood Enterprises (AIR 6/05) (amended) 10 18 83 306 123 Galartha (12/07) 10 18 84 307 124 Humphries (12/11) (amended) 10 18 84 309 125 Boggart (12/11) (amended) 10 18 85 311 126 Strawberry (6/12) (amended) 10 18 85 313 107 Rose (12/12) 108 Textile Wholesalers Part E: Review and reporting htt p:/ as /fr e ea cc 116 EastVale (amended) tud ym 109 MCQs 115 Tye (6/09) 249 251 log sp o t l.b ria 106 Pineapple (6/12) viii Page number ate Time Finding questions http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Mock exam Mock exam htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t Mock exam (Specimen paper) Finding questions http://freeaccastudymaterial.blogspot.com/ ix htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 404 ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ 405 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 406 ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ 407 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 408 ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ 409 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 410 ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ 411 htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ 412 ACCA examiner's answers: Specimen exam http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t co m/ http://freeaccastudymaterial.blogspot.com/ Notes http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ Name: co m/ Review Form – Paper F8 Audit and Assurance (06/14) Address: During the past six months you recall seeing/receiving any of the following? (Tick as many boxes as are relevant) log sp o t How have you used this Kit? (Tick one box only) Home study (book only) On a course: college Our advertisement in Student Accountant With 'correspondence' package Our advertisement in Pass Other Our advertisement in PQ Our brochure with a letter through the post Why did you decide to purchase this Kit? (Tick one box only) Our website www.bpp.com Which (if any) aspects of our advertising you find useful? (Tick as many boxes as are relevant) Have used the complementary Study text Have used other BPP products in the past l.b Recommendation by friend/colleague Prices and publication dates of new editions Information on product content Saw advertising Facility to order books off-the-page Other None of the above Passcards Kit i-Pass ym Which BPP products have you used? Text ate ria Recommendation by a lecturer at college Home Study Package Passing F8 Questions Top Tips etc in answers Mock exam answers cc Overall opinion of this Kit as Content and structure of answers tud Your ratings, comments and suggestions would be appreciated on the following areas Excellent Useful Not useful Good Adequate Poor Yes No ea Do you intend to continue using BPP products? Very useful The BPP author of this edition can be e-mailed at: Yen-peiChen@bpp.com htt p:/ /fr e Please return this form to: Pippa Riley, ACCA Publishing Manager, BPP Learning Media Ltd, FREEPOST, London, W12 8AA http://freeaccastudymaterial.blogspot.com/ http://freeaccastudymaterial.blogspot.com/ co m/ Review Form (continued) TELL US WHAT YOU THINK htt p:/ /fr e ea cc as tud ym ate ria l.b log sp o t Please note any further comments and suggestions/errors below http://freeaccastudymaterial.blogspot.com/ ... coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA- approved support for your revision We look at the dos and don’ts of revising for, and taking, ACCA exams  We... This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams as In this Practice and Revision Kit, which has been reviewed by the ACCA examination team, we: Discuss... http://freeaccastudymaterial.blogspot.com/ co m/ http://freeaccastudymaterial.blogspot.com/ Helping you with your revision BPP Learning Media – Approved Learning Partner – content Tackling revision