Audit and Assurance (AA) March/June 2026 Examiner's Report: Key Takeaways for ACCA Students

Many ACCA students struggle with Audit and Assurance (AA) because they know the theory but find it difficult to apply concepts correctly in exam scenarios. Vague answers, confusion between audit procedures and controls, and poor risk explanations can cost valuable marks. Understanding what examiners expect is therefore essential for improving performance.

The Audit and Assurance (AA) March/June 2026 Examiner’s Report provides useful insights into these challenges. It highlights student performance, common mistakes, correct approaches, and areas where marks were lost across Sections A and B. By studying this feedback, ACCA students can understand examiner expectations, improve answer quality, and prepare more effectively for upcoming AA exams.

What Is the Audit and Assurance (AA) March/June 2026 Examiner's Report

The Audit and Assurance (AA) March/June 2026 Examiner's Report is an official document from ACCA. It is written by the examining team after checking thousands of student answers. This AA Examiner Report explains what students did well and where they lost marks.

Many students preparing for ACCA F8 Examiner's Report topics use this feedback to fix their mistakes. The report is helpful because it comes straight from the people who check the papers. It gives real, honest advice for future attempts.

Key Highlights From the AA Examiner's Report June 2026

The AA exam has two parts, and both are compulsory. Understanding this structure helps students plan their time better.

• Section A: Three case-based objective test (OT) questions, each with five questions, totaling 30 marks

• Section B: One 30-mark question and two 20-mark questions, testing deeper understanding

• Candidates must manage time wisely since each mark is linked to about 1.8 minutes

• The report reminds students that practice is the biggest key to passing

The ACCA AA examiners report also notes that students who skip regular practice usually struggle with the written questions, since these test real application skills, not just theory.

Audit and Assurance (AA) March/June 2026 Examiner's Report PDF

Section A: The Bell Co Case

This case involved an audit supervisor examining several estimates in Bell Co's draft financial statements — depreciation, a legal claim, inventory, and a directors' bonus accrual.

• Question One (Audit Risk from Estimates): Candidates identified which circumstances increased audit risk. Management changing its depreciation approach and a prior-year file showing understated provisions both increased risk, while finance director review of estimates did not, since it represents oversight rather than a risk factor.

• Question Two (Depreciation Substantive Procedures): Correct answers were A and D — recalculating a sample of assets' depreciation, and reviewing the policy for reasonableness given the loss on disposal. Reviewing board minutes for authorisation (C) was rejected as it's a test of control, not substantive.

• Question Three (Legal Claim Evidence): Correct answer was A (1 and 3) — inspecting customer correspondence for additional claims and obtaining lawyer confirmation. Writing directly to the customer or comparing to the prior year's provision were both inappropriate.

• Question Four (Inventory Allowance): Correct answer was C — comparing post-year-end sales prices to cost, which tests valuation at the lower of cost and net realisable value. Other options tested existence, accuracy, or rights and obligations instead.

• Question Five (Ranking Bonus Evidence): Correct answer was B (4, 2, 1, 3) — auditor-generated recalculation agreed to contracts was most reliable, while verbal discussion with the payroll clerk was least reliable.

Section B: Albatross Co (30 Marks) — Audit Risk, Ratios, and Substantive Procedures

Requirement (a) — 4 marks: Candidates defined audit risk and its three components (inherent, control, detection risk). Many lost marks by describing inherent risk vaguely as "due to the nature of the business" rather than giving its technical definition, or by simply listing the components without defining audit risk itself.

Requirement (b) — 4 marks: Candidates calculated eight ratios (gross profit margin, operating profit margin, inventory holding period, receivables collection period) across two years. Only the final figures earned credit — workings alone were not creditworthy. Most candidates handled this well.

Requirement (c) — 16 marks: Candidates described eight audit risks with matching auditor responses. Key technique points included:

• Reading the entire scenario first and highlighting relevant facts before drafting.

• Clearly stating which financial statement area was affected (e.g., "property, plant and equipment could be overstated"), not vague terms like "assets could be misstated."

• Avoiding copy-pasted scenario facts without actually identifying the risk.

• Ensuring auditor responses were practical actions an auditor would take — not management actions, and not just "increased professional scepticism" without specifics.

• Using ratio results (like a rising receivables collection period) together with scenario information to support risk identification, but only claiming credit once per risk.

Requirement (d)(i) — 4 marks: Candidates needed analytical procedures only for revenue — a capitalised instruction many missed, instead listing tests of detail like casting the sales listing, which earned no credit. Valid procedures included comparing revenue to prior year/budget by product line and investigating (not just identifying) significant fluctuations.

Requirement (d)(ii) — 2 marks: For settlement discounts, candidates needed two well-detailed substantive procedures, guided by IFRS 15 — recognising that discounts should reduce revenue rather than sit within interest expense.

Section B: Dewberry Co (20 Marks) — Internal Controls

Requirement (a) — 4 marks: Candidates listed four purchases-system control objectives without needing the scenario. Common errors included confusing objectives (e.g., "purchases are only made for valid business transactions") with control procedures (e.g., "ensure purchases are authorised") — only objectives earned credit.

Requirement (b) — 16 marks: Candidates identified eight control deficiencies, explained their business impact, and recommended fixes. Key lessons:

• A deficiency must be the actual gap in control — e.g., not that an exception report exists, but that it's never reviewed.

• Explanations must be specific to each deficiency's real-world consequence (e.g., stockouts leading to lost revenue), not generic "this may lead to fraud or error."

• Recommendations must be concrete actions, not restatements of the objective (phrases like "ensure that…" earned no credit).

Section B: Toulouse & Co (20 Marks) — Substantive Procedures and Auditor's Reports

Requirement (a) — 5 marks (Trade Receivables): Procedures needed full detail — e.g., "review after-date cash receipts" had to be extended with "and follow through to the pre-year-end balance." Since the scenario ruled out receivables confirmation, candidates who still described confirmation steps earned no credit. Procedures must target the receivables balance, not revenue.

Requirement (b) — 5 marks (Bank Loan): Candidates needed procedures tailored to the loan's specific structure — agreeing initial proceeds to the bank ledger, recalculating the interest/capital split of repayments, and verifying the current/non-current liability split. Reviewing board minutes for loan authorisation was rejected as a test of control, and auditing the machinery the loan financed was irrelevant to the requirement.

Requirement (c) — 5 marks (Sales Tax Liability): The focus had to stay on the year-end liability, not general sales tax procedures throughout the year. Valid procedures included reviewing correspondence with the tax authority and agreeing the liability to the post-year-end bank statement.

Requirement (d) — 5 marks (Auditor's Report Impact): This tested an unresolved irrecoverable receivable issue. Marks were split across discussing the issue, assessing materiality, describing the type of modification, and stating the report impact. Common errors included saying the "report" is modified instead of the "opinion," omitting reference to material misstatement, and incorrectly mentioning emphasis of matter or key audit matters paragraphs, which weren't relevant here.

How Students Can Use This ACCA AA Examiner's Report to Prepare

Reading the Audit and Assurance (AA) March/June 2026 Examiner's Report is only useful if students apply the lessons. Here is how to use it well:

• Practice past exam questions from real ACCA sessions regularly

• Learn exact definitions instead of general explanations

• Always read the full scenario before writing answers

• Highlight risk-related facts while reading the case study

• Write clear, detailed procedures instead of short, vague points

Following this AA Examiner Report advice can help students avoid repeating the same mistakes.

The Audit and Assurance (AA) March/June 2026 Examiner's report is a valuable guide for every ACCA AA student. It shows real exam patterns, common errors, and practical tips straight from the examiners. Reading this report carefully, along with regular practice, can help students prepare smarter and pass the AA exam with more confidence.