The Hindu Business Line : How to improve your auditing score

There is a change in the pattern of the CA PCC auditing paper compared to PE-II. The paper consists of eight questions, all of which are to be answered. Questions 1 and 2 carry 20 marks each and the remaining six carry 10 marks each.

Q1 has 10 parts of two marks each, totalling 20 marks. The candidate has to state true or false and give reasons for the same.

The question mostly centres around the standards and company audit. A question from EDP or government audit cannot be ruled out though.

Keep in mind that the questions carry only two marks each. Therefore, all the 10 are to be answered in about half an hour.

Give the reason in not more than three sentences, quoting the relevant provisions of the law or the standards. With good reasoning, scoring 20 marks is possible.

Divide and conquer

Q2 is also for 20 marks. This is based on practical situations. Three or four questions carry 20 marks and cover the standards (Accounting Standards as well as Audit and Assurance Standards) and company audit.

Divide the answer into four points:

Explain the legal provision, be it the standard or the company law. Quoting the section is not very important, though it is useful. But do not quote a section or provision unless you are sure of it. Quoting a wrong provision only exhibits ignorance of the subject.

Give your interpretation of the given situation (at times this may not be required).

Correlate the legal provision to the given situation to develop your reasoning and build up logic.

Based on the above, give your conclusion.

Strategically, do not start your answer with the conclusion. A structured answer is needed to score well.

A good answer should help you get at least 15 out of the 20 marks allotted to this question.

This strategy will also works for other subjects such as law and income-tax.

Structure to score

Q7 is based on audit procedures of vouching/verifying.

Remember the assurances the auditor would require in substantive procedures while answering the question on vouching. Write one line each on rights and obligations, genuineness, bona fides, measurement, materiality, recording, and completeness.

You would have then covered the answer properly. While on verification/valuation, write on ownership, existence, usage, recording in non-financial records, and applicability of any accounting standard.

A good answer should help you score up to seven marks for this question.

By careful structuring, the candidate should be able to score a minimum of 40 marks on these three questions.

The remaining four questions (3, 4, 5, and 6) are from company audit, government audit/EDP audit, audit and assurance standards, and audit of specialised institutions such as cinema, educational institutions, etc.

These questions are normally split into two parts — 6+4 or 7+3. This is where the candidate has to use his judgment. Editing capabilities to adjust the answers based on marks allotted would be important.

When properly attempted, scoring about 30 out of the 40 marks for these four questions is achievable.

Flavour welcome

Q8 is on short notes, where the student is required to answer two out of three questions for 10 marks. A good strategy would be to explain the concept in a couple of sentences and explain its importance in auditing at the planning stage, during the course of audit and on conclusion of the audit.

Reference to relevant Audit and Assurance Standard or the provision of law would add value to the answer. A good answer should fetch 6-7 marks.

On an overall analysis, scoring of marks can be spread out as under: Question 1 — maximum marks 20; attainable 16; Question 2 — 20 and 15; Questions 3 to 6 — 40 and 30; Questions 7 and 8 — 20 and 15; Total — 100 and 76.

Avoid mental blocks

Even after considering underperformance due to unforeseen circumstances, 70 marks should not be difficult for an average candidate. A good candidate can surpass this and go on to touch the coveted 80 marks in auditing. Giving a margin of 10 per cent, 70-80 marks in auditing is reasonable.

A candidate should overcome mental blocks — such as certain subjects are practical and certain others theoretical. Even a paper such as accounting has marks set apart for theory (such as accounting standards)True. But the methodology of studying, answering the questions should also be considered. Often, candidates work out the problems in accounting or costing or income-tax. But the same effort is not put in auditing, law, information technology. The objective in solving problems is to ensure that your answers are in line with the expectations. The same holds good for other subjects too. Start matching what you have in mind with what is expected of you. It stands you in good stead.

Proper presentation

In auditing, we come across the term “sufficient and appropriate”. Your answers should also be sufficient and appropriate. Often, the answers are lacking in content.

On the contrary, scoring more than 70 marks in auditing is quite possible. There are also candidates who clear the first group because of marks scored in auditing and not necessarily in accounting.

With careful preparation, the possibility of getting high marks in auditing cannot be ruled out.