Three Rules by Alan Lewin ( Paper 2.6 )

In order to succeed in Paper 2.6, you have to practise past papers before the exam and then meet the expectations of the examiner. Knowledge is not enough. There are three key rules you should follow to be successful in the Paper 2.6 examination.

EXAMINATION RULE 1

The examiner expects candidates to have appropriate knowledge.
Candidates are expected to make a reasonable attempt at the examination. Examinable knowledge is stated in the Syllabus and Study Guide so candidates know what will be covered in the exam. Given that there are seven major sections to the syllabus, and six examination questions on each paper, you can probably expect roughly one question from each syllabus area in each examination. This is not to say that two questions could not be directed to the same area of the syllabus, but three would be unlikely as it would place too much emphasis on one area.

In other words, candidates are expected to be aware of the syllabus and to have studied the knowledge relating to each syllabus area. If a question is asked, for example, on an engagement letter, then candidates should know the contents of that letter and be able to list those contents in an answer.

EXAMINATION RULE 2

Practise applying your knowledge by attempting examination-style questions under examination conditions.
It may seem an obvious point, but a good method of obtaining a pass in the Paper 2.6 exam is to practise answering questions under examination conditions.

A question such as ‘List the contents of an engagement letter’ can be answered with classroom theory, ie studying from a textbook. However, the question: ‘Explain the reasons why you may not wish to accept the engagement for the audit of the XYZ company’ requires knowledge of the specific company. This information will be available in the scenario in the examination question. What you have to do is identify relevant parts of the scenario and use those in the answer. In other words you are applying your knowledge of engagement risk to a specific situation.

The best method of preparing for these questions is practise. It allows you to learn the technique of reading through a question, to identify appropriate points, and to use those points in your answer.

EXAMINATION RULE 3

Identify the point, explain it, relate it to the scenario.
It is important to identify the point, explain it, and relate it to the scenario, providing the ‘correct’ amount of writing in an answer.

The following section is based on the Pilot Paper question about E-wheels (click here to view a copy of the Pilot Paper in PDF format). It's probably helpful to have a look at the question so you have a clearer understanding of the comments below.

E-wheels is a company selling cars on the Internet. The key points of the scenario are:

• there is a competitive market
• management disagreements
• possible going concern issues
• question focus on planning.

Part (b) of the question requires you to explain the risks associated with the audit. As part of your approach to answering the question, you should read the scenario to try and identify the risks for this particular audit. You should note that one of the reasons you may not want to accept an engagement is because this is the first year you will have audited this client. Your answer could be simply: ‘First year audit’.

The comment shows you have identified a reason for having a higher risk on the audit. However, there is simply not enough detail to show why the point is relevant to this particular client. Your next attempt at the same point could be: ‘As this is the first year of audit, care must be taken as mistakes could be made due to lack of knowledge of the client.’

The answer now explains the problem of this being a first year audit, but not for E-wheels. So instead of gaining the one mark available, you have probably only obtained half because the answer is missing some vital information. Ask yourself: ‘Why is there a particular problem in the first year of audit for the E-wheels client?’ A good answer is:

‘This is the first year we have audited E-wheels. The directors require an unmodified audit opinion suggesting they may put pressure on the auditor to complete the audit quickly. Haste and lack of knowledge of a new client may mean the auditor will miss important points.’

As your final answer this is much better. You have now shown why a first year audit is a relevant comment for E-wheels by applying your knowledge to the specific situation. You could add more words but these would almost be superfluous. In an exam you would now move onto the next point.

CONCLUSION

The three simple rules for the Paper 2.6 examination are:

• Rule 1: the examiner expects candidates to have appropriate knowledge. This knowledge will be examined in knowledge-based questions.
• Rule 2: practise applying your knowledge by attempting examination-style questions under examination conditions. This gives you the confidence to attempt the real examination.
• Rule 3: for application questions: identify the point, explain it, and then relate it to the scenario. This shows you can relate knowledge to a specific scenario.

Hopefully these rules will help ensure you are prepared for the Paper 2.6 examination.

Alan Lewin is examiner for Paper 2.6