The Mickey Mouse Worries

Question: As informed I need to remember the definition in Audit?

Layman say: How many Audit term are there in Audit syllabus, I can assure you there are more than 100 terms. So can you remember all 100 terms' definition?

Is ACCA an exam for memory test? I will not deny that some part of the syllabus you need to memorise especially when it come to "specific factor that affect audit" but not definition.

Question: if I do not memorise what should I write?

Layman say: Explain the definition with your own words and add on with example!

Question: How? Everyone that I know of the try to memorized

Layman say: I will not discourage you if you have very good memory skills. If yes go ahead and remember it but hard. But for other student like layman who is not so skillful, my recommendation are as follow?

Q: Define Audit Risk (4 marks)

You have 4 marks up there! In exam you only have 7 minutes to answer the above question!

Now when you are too tense in exam and forget about the "Official Definition that you are suppose to Remember" What should you do sit there and think hard, let your precious time fly away or you should do something with it?

Layman is not smart but I think I need to do something that I should get marks…………

Examiner Answer

Audit risk is the risk of giving an inappropriate opinion on the financial statements; for example failing to qualify when the financial statements contain a material error. Audit risk has three individual components in the formula:

Audit Risk = Inherent Risk x Control Risk x Detection Risk

Text book definition

Audit risk is defined as:

The risk of that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.'

Layman Answer

Audit risk is the risk that auditor might give a wrong audit opinion in their audit report. For example: When a Financial statement of a company is actually qualified but the Audit provided a wrong opinion by saying that the financial statement is unqualified.

Do you think the text book definition is wrong ? do you think layman definition is wrong ? What definition you have learned through "REMEMBER by HARD" Same version or different version

Is there only one way to define?
(Note there above is only part of the answer 1 mark)

Another example

Official definition that you should remember by Hard for Inherent risk is

Inherent risk" is the susceptibility of an assertion to a misstatement that could be material, either individually or when aggregated with other misstatements, assuming that there are no related controls'

Examiner Answer:

This is the risk that an account balance or class of transactions contains a material error.

(Note there above is only part of the answer 1 mark)

So do you think that examiner needs you to remember by hard? Do you think that definition of Audit term need to be REMEMBER BY HARD?

You have the wisdom to judge!

Good Luck