ACCA AA Examiner Report Analysis: Sept/Dec 2025 Exam Insights by Palak Rana ACCA Ma'am

The ACCA Examiner's Report is an invaluable tool for exam preparation, providing detailed insights into examiner expectations and common student errors from previous exams. By analyzing past performances, it helps candidates understand what examiners are looking for and how to apply theoretical concepts effectively in practical scenarios.

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This report serves as a roadmap for exam success, allowing students to fine-tune their approach and avoid common pitfalls. This analysis focuses on the recent September/December Examiner's Report, highlighting key takeaways that are essential for mastering exam technique, refining answer quality, and ultimately improving performance on the exam day.

The Optimal Strategy for Using ACCA AA Examiner's Report

Simply reading the Examiner's Report is insufficient for true benefit. A structured four-step process is recommended to understand potential mistakes and refine exam technique:

1. Attempt the Past Paper: First, complete the corresponding past paper (e.g., September/December 2025 paper) under strict exam conditions.

2. Review the Suggested Answers: After your attempt, carefully read ACCA's official suggested answers and marking guidelines.

3. Analyze Your Performance: Compare your answers against the suggested ones, identifying discrepancies, mistakes, and knowledge gaps. This critical step prevents similar blunders in the actual exam.

4. Read the Examiner's Report: Finally, read the Examiner's Report to see if the common errors highlighted by the examiner match your own.

This structured approach fosters self-evaluation from the perspective of a paper checker, which is invaluable for self-study students. It is highly recommended to follow this process for a minimum of three past papers.

General Structure of the ACCA AA Examiner's Report

The Examiner's Report typically includes:

• General Comments: Overview of candidate performance.

• Section A Analysis: Commentary on Objective Test (OT) cases and challenging areas.

• Section B Analysis: Detailed commentary on Constructed Response (CR) questions, focusing on themes, knowledge gaps, and exam technique.

Section A: Analysis of Objective Test (OT) Questions

This section addresses common challenges in specific knowledge-based questions.

1. Rights of a Removed Auditor

• Correct Rights: An auditor has the right to receive notice of their removal resolution and speak at the general meeting where their removal is discussed.

• Incorrect Rights: Access to company books is during engagement, not necessarily after removal. Attending board meetings is not a general right.

2. Identifying Assurance Engagements

• Core Principle: An assurance engagement provides a conclusion or opinion to enhance user confidence.

• Comparative Structure: Assurance vs. Non-Assurance Services

3. Assurance on Profit Forecasts

• Level of Assurance: Due to the future-oriented nature of forecasts, the auditor provides limited assurance.

• Type of Conclusion: A negative conclusion (e.g., "nothing has come to our attention…") is given for limited assurance engagements.

4. Review Procedures on a Profit Forecast

• Common Mistake: Selecting procedures for a full audit (e.g., control testing, agreeing figures to invoices).

• Correct Approach: A review engagement primarily involves inquiry and analytical procedures. For a forecast, this includes investigating significant movements in forecasted revenue and comparing forecasts to prior years.

Section B: Analysis of "Q Company" (30-Mark Question)

This question covered internal controls, payroll substantive procedures, and corporate governance.

Part 1: Why and How to Understand Internal Controls

• Requirement: Explain why an auditor understands internal controls and identify two methods for this.

• Common Student Blunder: 'What' vs. 'Why': Many candidates incorrectly described what internal controls are.

• Correct Approach: Focus on why the understanding is necessary:

• To identify and assess the Risk of Material Misstatement (RMM).

• To determine if Test of Controls (ToC) are needed and to design them.

• To determine the nature, timing, and extent of Substantive Testing.

• Methods for Obtaining Understanding: Flowcharts, Narrative Notes, Internal Control Questionnaires (ICQs).

Part 2: Control Deficiencies, Recommendations & Tests of Control

This critical area requires a structured, multi-part answer for each issue.

• The Four-Step Answering Technique: For each scenario issue, provide:

1. Identify the Deficiency: State the weakness.

2. Explain the Implication: Explain why it's a problem and its specific negative impact (e.g., wastage of company resources).

3. Recommend a Control: Propose a specific, practical action.

4. Describe a Test of Control: Describe the auditor's procedure to check the control's effectiveness (e.g., Inspect, Observe, Re-perform, Inquire).
   (Memory Tip: Remember the four-step approach for control deficiencies: Deficiency, Implication, Recommendation, Test of Control.)

Part 3: Substantive Procedures for Payroll Expense

• Requirement: Describe substantive procedures for payroll expense evidence.

• Common Blunders: Vague procedures, confusing with tests of control, or irrelevant procedures.

• The P.A.S.S. Framework for Substantive Procedures: A well-described procedure includes:

• **P**urpose (assertion being tested)

• **A**ction (what auditor does)

• **S**ource (document used)

• **S**cenario (link to specific facts)
  (Memory Tip: Think P.A.S.S. to ensure your substantive procedures are complete and effective.)

• Examples:

• Recalculate gross-to-net pay for a sample and agree to payroll records for accuracy.

• Agree total net pay from payroll records to bank statement for occurrence and accuracy.

• Perform analytical procedures comparing payroll expense month-by-month and against prior year/budget, investigating fluctuations.

Part 4: Corporate Governance Deficiencies

• Requirement: Identify two deficiencies, explain them, and recommend a solution.

• Correct Approach:

1. Identify the Governance Weakness: State the specific failure.

2. Explain why it is a Problem: Detail the negative consequence (e.g., lack of independent oversight).

3. Give a Clear, Actionable Recommendation: Propose a practical solution.

Section B: Analysis of "Survival Company" (20-Mark Question)

This question covered audit documentation, ratio analysis, and audit risk.

1. Purpose of Audit Documentation

• Correct Focus: Explain the purpose: to provide evidence for the audit opinion, assist in planning, and facilitate quality control.

2. Ratio Calculation

• Common Mistake: Not attempting calculations or only showing workings without a clearly labeled final answer.

3. Audit Risk and Auditor's Response

• The Three-Step Answering Technique for Audit Risk:

1. Identify the Risk: State the risk using scenario info and calculated ratios.

2. Explain the Risk: Explain its financial statement impact, specifying the account and assertion at risk (e.g., overstatement of revenue).

3. Auditor's Response: Describe the auditor's approach to address the risk.
   (Memory Tip: For Audit Risk, always follow the three steps: Identify, Explain, Respond.)

• Examiner's Warnings:

• Link facts to specific financial statement risks.

• Lack of accounting knowledge (IFRS) is a handicap.

• Response is an approach, not detailed procedures.

• Stating "increase professional skepticism" scores NO MARKS; it's a mindset, not a specific response.

Examiner's Report: Common Mistakes in Audit Risk Questions

Examiners emphasize that audit risk is critical. Common errors include:

• Vague Terminology: State if an item is overstated or understated, not just "misstated."

• Lack of Assertion Link: Link risk to a specific financial statement assertion.

• Generic Responses on Professional Skepticism: Avoid stating "increase professional skepticism."

• Incorrect Response Type: Describe an approach, not detailed procedures.

• Insufficient Detail: Specify what will be asked of management, not just "discussion with management."

Summary of Common Candidate Failings

Recurring mistakes include:

• Stating a fact without explaining its risk.

• Failing to link risk to a specific assertion.

• Providing vague, generic responses.

• Not properly using ratios to identify or explain risks.

Guidance for Answering Audit Risk Questions

To improve, follow this guidance:

Comparative Structure: Improving Your Risk Description

Analysis of a 20-Mark Practice Question (Plantation Co.)

This question involved audit procedures for two clients, focusing on a continuous inventory count, purchases, expenses, and a director's bonus. Procedures, totaling 15 marks, needed to be sufficiently detailed, specifying documents used.

(Memory Tip: Remember the PASS framework, but apply it contextually to avoid rote learning without understanding.)

Also, check: ACCA 2026 Exam Format

Part A: Procedures for Continuous Inventory Count

Scenario Context: An interim audit for Tea Co. (manufacturer) with a continuous inventory system. Both Tests of Controls and Substantive Procedures are required.

Comparative Structure: Common Errors vs. Effective Procedures

General Errors in Answering Procedure Questions

Examiner feedback highlights critical errors in audit procedure questions:

• Mixing up Test of Controls and Substantive Testing: Failing to distinguish between them.

• Providing Irrelevant Procedures: Suggesting procedures not addressing the specific risk or assertion.

• Using Vague Verbs: Using weak, non-descriptive verbs like "check," "review," or "ensure."

Check, Also: ACCA Annual FEE 2026

Comparative Structure: Vague vs. Specific Procedural Language

Part D: Subsequent Events & Financial Statement Amendments

Scenario Context: A legal claim (contingent liability) now has a probable $0.4 million settlement.

• Analytical Process:

1. Identify Accounting Treatment: Determine if it's an adjusting or non-adjusting event under IAS 10.

2. Apply to Scenario: This is an adjusting subsequent event as it provides evidence of a present obligation at year-end.

3. Assess Materiality: Calculate the materiality of the settlement.

• Common Student Error: Misunderstanding the distinction between adjusting and non-adjusting events.

Key Exam Techniques & Final Advice

To succeed in the Audit & Assurance paper, focus on exam technique and practical application.

• Read the Requirement Carefully: This avoids providing irrelevant information.

• Understand Command Words: "Explain" is not "List." "Audit Procedures" are distinct from "Tests of Control" and "Substantive Procedures."

• Be Practical: Ask if an auditor can actually perform the action.

• Recognize Exam Patterns: Be prepared for common question types like Audit Risk, Control Deficiencies, and Substantive Procedures.

• Focus on Key Skills: Success depends on Clarity, logical Structure, Application to the scenario, and referencing specific documents in procedures.

• Final Recommendation: Study a minimum of three recent examiner reports, attempting the past paper first, then reading the report for insights into pitfalls and best practices.