By Paul Merison*
I have been an audit tutor for almost 18 years. Throughout that time, students have struggled to pass audit papers. In fact I regularly meet students who have only 2 papers left to complete their ACCA exams – F8 and P7. It happens far too often.
So, here is my advice on how to pass F8 and P7 (it is mostly the same advice for both papers).
But this will not make you pass.
I can tell you what to do to pass, I can explain all the knowledge and have you nodding at me with a smile showing you understand it all clearly. I can work past exam questions in front of you over and over again and you will tell me you totally understand the technique and what I have shown you.
But that will not make you pass either.
I know how to be an excellent golfer. The main technique is really easy to explain and to learn – just keep your head absolutely still when swinging any golf club, and the ball will probably go straight.
Simple. And it works.
So why, when I hit a golf ball, does it fly off sideways so often?
- When I am hitting the ball, my body wants my head to move, so unless I remind myself “head still, head still, head still” whilst I am swinging the golf club it regularly goes wrong;
- I suppose the “head still” thing would come naturally if I swung a golf club every day, but I do not practise enough to make it natural (and note that even world class golfers sometimes let their head move by accident, suggesting that even they sometimes need to remind themselves head still, head still, head still).
HOW TO PASS AUDIT EXAMS
Most of the marks on P7, and at least 60% of the marks on F8, are not a reward for knowledge. Instead, the majority of marks on F8 and P7 are for your ability on practical scenario questions.
There are only around 5 or 6 types of practical audit question (audit exams are very repetitive). Therefore stage 1 is to learn the technique for each type of practical audit question (ethics/professional issues, audit risk, internal controls, substantive testing, audit reports, non-audit assignments – this last one is more for P7 than F8).
A lot of students do stage 1 and when I ask they clearly know the technique. Unfortunately, far too few ever bother to learn from my golf story above.
PRACTISE using the technique, on real past exam questions:
- firstly to practise identifying the points you want to make
- secondly to practise the explanations, in writing, in full
Repeat Stage 2. Repeat it a LOT, especially in the final weeks and days and then hours before the exam. Repetition is annoying and eats up time but it works – how many golf balls do you think Tiger Woods hits each week?
On exam day, think through the techniques as you enter the exam hall.
Write them on the exam paper next to each question requirement during the 15 minutes of reading time.
And when writing your answers (i.e. hitting the golf ball), keep re-reading the technique and repeating it inside your head (not out loud!!) and make sure you are sticking to it.
For the pure knowledge/theory questions (more for F8 than P7), practise writing out your own explanations of the technical areas of the syllabus. It is so much easier to explain something for the 10th time than it is for the first (trust me, all experienced tutors know this all too well!).
SOME SPECIFIC ADVICE FOR P7 STUDENTS
You learned most of the audit knowledge (the standards) at F8 – there are only a few more added for P7.
However, the accounting standards that you are auditing are MUCH more numerous on P7, so take some time to practise writing a minimum of 5 bullet points to summarise each accounting standard, to help embed the key points in your head.
If it is that simple, why the poor pass rates then?
You are not going to enjoy reading this bit.
It is depressing in many ways, but you need to read, understand, grit your teeth and do what I say.
- Most students seem happy to practise the numbers questions, and if you can get the methods half right you pass.
- Unfortunately, almost all audit questions require practise of WRITING not numbers, and most students seem to hate doing this (or will make rough notes, instead of writing things out in full)
I think the problem here is that calculations cannot be half done, so students will try the whole thing just like in the exam hall – whereas with written answers it is far too easy to think up some ideas, then check the answer to see if your ideas are there…and then stop.
HOW MUCH SHOULD YOU WRITE?
- There seems to be some confusion about how much detail is needed to earn a mark. Aim for 2-4 lines of writing for every mark you are trying to earn, and bear in mind that anything less than 10 words is unlikely to be clear enough to earn a full mark (look at the points made in this article and aim for a similar amount of words for each point you make in the exam)
- To make your points longer, explain everything – and that means every point you write should aim to include the word “because” (or similar, such as “in order to” or “as”)
HARD WORK REQUIRED – Fully planned content, followed by fully written out answers, to exam time, in order to build up thinking/writing speed.
Knowledge of accounting is important both on F8 and P7, so:
- For F8, ensure you understand how the books of prime entry and supporting ledgers fit together, and make sure you are comfortable with the main points of te accounting for inventory, tangible non-current assets, development costs, provisions and contingencies, and events after the reporting period (these seem to be the ones that get examined the most)
- For P7, ensure you are happy with every accounting standard on F7 or P2
Knowledge of audit standards is also important, especially for F8, so:
- For F8, make sure you are able to explain the key points of every audit standard from ISA 200 to ISA 720 (except ISAs 220, 550 and 600)
- For P7, the more basic ISAs are less likely to be tested directly, but more complicated ones such as Subsequent Events, Other Information, and Initial Audits remain worth knowing well, and core standards on areas such as audit risk and response, evidence, and audit reports must not be ignored
HARD WORK REQUIRED – Audit has a relatively low knowledge requirement compared to some exam papers, so there is no excuse for not putting in the effort and knowing your stuff. Remember what I said above – staring at the knowledge does not make it go in. Practise writing it out or speaking it out loud without the Notes in front of you.
No conclusion is needed.
Read the above guidance. And do it.
Paul Merison is Director of ACCA at LSBF London
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