This article explains the changes affecting paper P7 from June 2013 and candidates are

encouraged to familiarise themselves with the content of this article while preparing for exams in
June 2013 and subsequent sittings.

Format of the paper

The main change is that the format of the paper is being standardised from June 2013 onwards.
There will still be two compulsory questions in Section A and a choice of two from three
questions in section B. It is only the mark allocation that is changing. The questions in section A
will be for 35 and 25 marks. In section B each of the optional questions will be for 20 marks.
This standardisation is common to the Optional level examinations and has been introduced to
help candidates to manage their time in the exam, and to improve exam technique.

Syllabus changes

It would normally be the case that the syllabus and study guide published for June and December
2013 is relevant for exams in 2013. ACCA made an exception and has now extended the syllabus
and Study Guide of 2013 to June 2014. So, exam for June 2014 will be based on the 2013
Syllabus and Study Guide.
There have been a few small changes made to the syllabus. In syllabus area D Planning an Audit,
two new learning outcomes have been included, both of which are relevant to the demonstration
of higher skills rather than the additional of technical content to the syllabus. The first new
learning outcome relates to the identification of additional information. Candidates need to be
able to identify and explain the additional information that would be relevant to audit planning in
a given scenario. Candidates who have familiarised themselves with past papers will have seen
requirements similar to this in various questions, for example in relation to planning a due
diligence assignment. The new learning outcome simply clarifies that a similar requirement
could be asked in respect of planning an audit.
The second new learning outcome relates to the identification of matters not relevant to planning
an audit. This is a different skill being tested the ability to prioritise information that has been
given in an audit planning scenario, and to focus on the most important information relevant to
audit planning. This learning outcome is unlikely to appear as a specific requirement, but is
implied in all audit planning scenarios, and simply means that candidates will produce a good
answer if they select and prioritise the most important information and spend less time
discussion the less relevant i matters from the scenario provided.
Both of these learning outcomes have been added to the paper P7 syllabus following
recommendations from ACCAs regulatory authorities who periodically review the Syllabus and
Study Guide.

Candidates are also encouraged to read an article which first appeared on ACCAs website in
May 2012, which describes the appropriate exam technique to use in an audit planning question,
as it contains important guidance on tackling this type of question.
A second area of the syllabus where new learning outcomes have been included is syllabus area
B Professional and Ethical considerations, where two new learning outcomes have been included
in relation to professional scepticism. The first learning outcome that has been added to syllabus
area B is 'Discuss the importance of professional scepticism in planning and performing an
audit', and the second is 'Assess whether an engagement has been planned and performed with an
attitude of professional scepticism, and evaluate the implications'.
The syllabus has been made more robust in respect of professional skepticism due to its being a
matter of increasing importance in the profession, with the IAASB issuing in February 2012 a
document entitled Questions and Answers - Professional Skepticism in an Audit of Financial
Statements, which explores the importance of professional skepticism as a concept to be
employed during an audit. Similarly, the UKs Financial Reporting Council issued a Briefing
Paper on Professional Skepticism in March 2012, covering similar ground to the IAASB
document. On issuing the IAASB document, the Chairman of the IAASB stated the
following. 'The IAASBs International Standards on Auditing (ISAs) explicitly recognize the
fundamental importance of professional skepticism. Nevertheless, adopting and applying a
skeptical mindset is ultimately a personal and professional responsibility to be embraced by
every auditor. It is an integral part of the auditors skill set, is closely interrelated to the
fundamental concepts of auditor independence and professional judgment, and contributes to
audit quality. The auditors education, training, and experience are therefore critical.' This
highlights the importance of professional skepticism not just as an attitude to be employed by the
auditor, but as a crucial part of quality control including ethical considerations. A sceptical
attitude enhances the auditors ability to identify and respond to conditions that may indicate
possible misstatement due to error or fraud and critically assess audit evidence.

Current issues

Candidates are reminded that current issues remains a feature of the syllabus and that they should
be aware of IAASB developments and matters being debated within the profession. The IFAC
website contains information on the work of the IAASB including its current projects and
consultations. Such matters have formed the basis of discussion questions in paper P7, in which
candidates are required to discuss a statement and are expected to form their own views and
opinions on such matters. Current issues can also be embedded within scenario based questions.
Current issues encompasses a wide variety of areas, and the topics of current issues requirements
in past examinations have included for example, the audit of complex and subjective
transactions and matters such as going concern and revenue recognition, developments in ethical
standards and in the regulation of the auditing profession, and revisions to auditing standards.

The list of examinable documents for Paper P7 is updated annually and candidates should ensure
that their study material includes the relevant examinable documents for the exam sitting they are
preparing for. This is important for many reasons, one of which is that changes to examinable
documents may be linked to a current issue, so clearly using out of date study materials means
that a candidate may not perform well on a current issues question. However reading beyond the
study text is very much encouraged in relation to current issues as this will help candidates to
understand issues from a broad perspective, enabling a proper discussion in the examination.

Conclusion

This short article has highlighted the way that mark allocations between questions will be
standardised from June 2013 onwards, and the changes made to Paper P7 syllabus and study
guide for the June 2013 sitting onwards. These changes are not major, but in part help to ensure
that Paper P7 covers matters of increasing importance to the profession.
ACCA Exam tips for Paper P2

Question 1
Either cash flow or foreign consolidation ( Im preferring cash flow! ), some corporate
governance element and / or some ethics
Question 2
A Various IAS / IFRS question 4 or 5 tricky areas where the directors are proposing to follow
their preferred treatment, but they are probably wrong. Need to explain how / why they are
wrong
Question 3
Similar to question 2 with IFRS and IAS covering such as Share based payments, Employee
benefits, Leasing ( recent article in Student Accountant ), Revenue
Question 4
Management commentary, publication of KPIs, mandatory or voluntary, potential problems with
the concept of effective control where an investor holds, say, 35% and auditor maintains that
this is effective control but directors refute it

ACCA Exam tips for Paper P7

Question 1
Respond to an email ( with briefing notes from a meeting with a (possibly ) new client ). You are
asked to prepare an outline report for the partner to present the case / problems to the members of
the audit team at the planning meeting. Take your calculator there WILL BE materiality
considerations to take into account
Question 2
Identify business risks ( or audit risks ) relating to a client and suggest ways to minimise the risk
Question 3
Identify the matters you should consider and State what audit evidence you should expect to
find BEWARE the difference between audit evidence you should expect to find compared
with the audit procedures which you should expect to have been carried out
Question 4
Various matters and their impact on the audit report / opinion
Question 5
Advantages and costs of establishing an internal audit department as distinct from
outsourcing OR Comment on the ethical and professional issues raised within a brief scenario
with 2 or 3 matters identified
Exam tips are out! Enjoy but do not rely on them.
Kaplan
Q1 Groups and ethics
A SOFP has been examined for in the last 4 examinations (both exams in 2011 and 2012)
perhaps it is time for
a GSOCI (QBD) or a statement of cash flows (revision mock) group accounting question. In
either event, it is
likely to include a change in group structure (acquisition and/or disposal of subsidiary in the
year). Accounting
issues possibly examined within this question include:
Financial instruments
Joint arrangements
Foreign currency
The ethical issue will normally focus upon an incorrect or inappropriate accounting treatment in

the group
accounts question. As IFRS 10/11/12 are relatively new, it could focus upon determination of
whether one
entity has control over another, and whether an appropriate accounting treatment has been
applied.
Q2 and Q3
Possibly a focus upon P2-only reporting standards, and those which require the exercise of
judgement.
Accounting issues possibly examined here include:
IAS 19 Employee benefits in revision mock
IFRS 2 Share-based payment in revision mock
IFRS 9 & IAS 39 Financial instruments including hedging in QBD
Entity reconstructions including accounting issues in the revision mock as not yet examined
since it
was included in the syllabus in 2011.
Q4 Essay-style question
This is difficult to call. I was going to include a question in the revision mock or QBD dealing
with current
developments in hedging, but at the Examiners Conference, in answer to a question about how
likely or
detailed such a question could be in an exam, it was described as horrific and ,my only attract a
small number
of marks within a bigger question.
Instead, the focus is perhaps more likely to be on current standards which may be lacking or
deficient in some
way hence drafting a question for QBD dealing with revenue recognition and leasing in one
question.
Although this is unlikely to be the format of such a question, it does represent hedging bets by
covering two
topics in the same question. The essay-style question in the revision mock deals with clutter in
company
accounts something the Examiner made specific reference to at the Conference.
BPP
There will be 4 questions. The compulsory question for 50 marks will cover consolidated
financial statements with adjustments on other syllabus areas, plus written parts, often in the

context of accounting adjustments and ethics.

You need to do two of the three 25 mark questions in section B of the exam, one of which is
normally set in the context of a specialised industry and one being a discussion question on
current developments. A statement of profit or loss and other comprehensive income
(with/without a statement of financial position) or a statement of cash flows seem likely for this
sitting and could include discontinued activities, disposals and acquisitions and a joint
venture/associate, while the issue of too much disclosure (see examiner article Bin the clutter),
management commentary, application of the definition of control, improvements in performance
measurement, conceptual framework or leasing are possibilities for the discussion question.
Opentuition
Question 1
Either cash flow or foreign consolidation ( Im preferring cash flow! ), some corporate
governance element and / or some ethics
Question 2
A Various IAS / IFRS question 4 or 5 tricky areas where the directors are proposing to follow
their preferred treatment, but they are probably wrong. Need to explain how / why they are
wrong
Question 3
Similar to question 2 with IFRS and IAS covering such as Share based payments, Employee
benefits, Leasing ( recent article in Student Accountant ), Revenue
Question 4
Management commentary, publication of KPIs, mandatory or voluntary, potential problems with
the concept of effective control where an investor holds, say, 35% and auditor maintains that
this is effective control but directors refute it
LSBF
* Group income statement or cash flow statement.
* Possibly two mix questions with the usual suspects of goodwill provisions financial
instruments and sbp and the rest.
* Current issues including leases Smes and jvs.

First Intuition
* Q1: Group question on disposals, piecemeal acquisitions or cashflow.
* Ethics.
* Revenue recognition current issue.
* Deferred tax.
* Share based payments.
Becker
Consolidation in Q1.
Disposals & complex groups.
Step acquisitions.
Cash flow.
Foreign sub.
Complex.
Financial instruments (IAS 39/IFRS 9) including hedging.
Employee benefits (IAS 19), amended in 2011.
Leases (IAS 17).
Share-based payments (IFRS 2).
Impairment of assets (IAS 36).
Deferred tax (IAS 12).