ACA SKILLS DEVELOPMENT GRIDS

2016

AUDIT AND ASSURANCE

ICAEW 2015
ACA OVERVIEW
The ICAEW chartered accountancy qualification, the ACA, is one of the most advanced learning
and professional development programmes available. Its integrated components provide an in-
depth understanding across accountancy, finance and business. Combined, they help build the
technical knowledge, professional skills and practical experience needed to become an ICAEW
Chartered Accountant.

Each component is designed to complement each other, which means that students can put theory
into practice and can understand and apply what they learn to their day-to-day work. The
components are:

Professional development
ICAEW Chartered Accountants are known for their professionalism and expertise. Professional
development prepares students to successfully handle a variety of different situations that they
encounter throughout their career.

The ACA qualification improves students ability and performance in seven key areas:
adding value
communication
consideration
decision making
problem solving
team working
technical competence.

Ethics and professional scepticism

Ethics is more than just knowing the rules around confidentiality, integrity, objectivity and
independence. Its about identifying ethical dilemmas, understanding the implications and behaving
appropriately. We integrate ethics throughout the ACA qualification to develop students ethical
capabilities so they will always know how to make the right decisions and justify them.

Three to five years practical work experience

Practical work experience is done as part of a training agreement with one of our authorised
training employers around the world. Students need to complete 450 days, which normally takes
between three and five years. The knowledge, skills and experience they gain as part of their
training agreement are invaluable, giving them the opportunity to put what theyre learning into
practice.

15 accountancy, finance and business modules

Each of the ACA modules is directly relevant to the work that students do on a day-to-day basis.
They will gain in-depth knowledge across a broad range of topics in accountancy, finance and
business.

There are 15 modules over three levels. These can be taken in any order with the exception of the
Case Study which has to be attempted last. Students must pass every exam (or receive credit).

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Certificate Level
There are six modules that introduce the fundamentals of accountancy, finance and business.
They each have a 1.5 hour computer-based assessment, a 55% pass mark, and can be sat at any
time. Students may be eligible for credit for some modules if they have studied accounting, finance,
law or business at degree level or through another professional qualification.

These six modules are also available as a stand-alone certificate, the ICAEW Certificate in
Finance, Accounting and Business (ICAEW CFAB). Students studying for this certificate will only
complete these six modules. On successful completion, the ICAEW CFAB can be used as a
stepping stone to studying the ACA qualification.

Professional Level
The next six modules build on the fundamentals and test students understanding and ability to use
technical knowledge in real-life scenarios. Each module has a 2.53 hour exam and has a 55%
pass mark. The modules can be taken in March, June, September and December, except the
Business Planning alternative modules for banking and insurance which are available in June,
September and December.

The Professional Level modules are flexible and can be taken in any order to fit with a students
day-to-day work. The Business Planning and Business Strategy modules in particular help
students to progress to the Advanced Level.

Advanced Level
The Corporate Reporting and Strategic Business Management modules test students
understanding and strategic decision making at a senior level. They present real-life scenarios,
with increased complexity and implications from the Professional Level modules.

The Case Study tests all the knowledge, skills and experience gained so far. It presents a complex
business issue which challenges students ability to problem solve, identify the ethical implications
and provide an effective solution.

The Corporate Reporting and Strategic Business Management modules are 3.5 hours long and the
Case Study is 4 hours long; each has a 50% pass mark.

The Advanced Level modules can be taken in July and November. They are fully open book, so
they replicate a real-life scenario where all the resources are at their fingertips.

Skills development grid

This document presents the skills assessed alongside technical knowledge for Professional and
Advanced Level modules. The skills should be read with the syllabus and learning outcomes, and
the relevant technical knowledge grid for each module.

The link between work experience and the exams will be made explicit through the professional
development framework and the skills development grids.

Students should use the professional development framework and skills development grids to
ensure success in their exams and workplace.

For each skills area, there is a description of the specific skills that are assessed, and how these
skills are assessed.

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SKILLS PROGRESSION THROUGH THE ACA QUALIFICATION
Advanced Level

Assessed skills Certificate Level Professional Level Corporate Reporting and Case Study
Strategic Business
Management
Assimilating and using information
Understanding the subject Specific issues Simple scenarios Complex scenarios Unstructured complex business
matter and identifying issues scenarios
Accessing, evaluating and Information/data as provided Single information source Multiple information sources Multiple information sources
managing information provided provided including own research
Using technical knowledge and Highly structured application of Structured application of Structured application of Unstructured application of
professional experience non-integrated knowledge integrated and non-integrated integrated and non-integrated integrated knowledge and
knowledge knowledge and experience experience
Structuring problems and solutions
Using analytical tools Specified tools Specified tools Tools inferred by nature of Unspecified tools
problem
Analysing and evaluating Highly specified tasks Specified integrated and non- Specified integrated and non- Defined output but unspecified
problems integrated problems integrated problems problems
Applying judgement
Assessing quality of Objective testing Specified in simple scenario Specified in complex scenario Underlying requirement within
information complex scenario
Assessing options and Options given Options included in simple Options included in complex Balanced judgement of
priorities including ethical scenario scenario priorities and risks in
issues unstructured scenario
Considering other perspectives Not assessed Possible alternative provided Alternative(s) provided Alternatives identified using
professional experience
Conclusions, recommendations and communication
Drawing conclusions and Not assessed Specified conclusions and Specified conclusions and Conclusions and
making recommendations recommendations in simple recommendations in complex recommendations supported by
scenarios scenarios own evidence
Presenting data and written Prescribed exam format Exam requirements, including Short written professional Professional report with
work some professional presentation presentations appendices and executive
summary

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PROFESSIONAL LEVEL
AUDIT AND ASSURANCE
Assimilating and using information
Assessed skills
Reading and understanding subject matter.
Accessing, evaluating and managing information provided in a few defined sources.
Framing questions that clarify information or identify gaps in knowledge.
Operating to a brief in structured situations.
Explaining the nature of ethics and its significance in the business environment.
Understanding the public interest and social responsibility.
Understanding the importance of contributing to the profession.
Appreciating the ethos and culture of the accountancy profession.
Understanding the role of the professional accountant within the public interest, practice and
business contexts and the regulatory structure of the profession.
Understanding the importance of ethical behaviour to a professional and the reasons for the
adoption of ethical codes by professions acting in the public interest.
Understanding the pressures on professional ethical behaviour, including the interaction
between professional ethics and the law and other value systems.

How skills are assessed

Questions will contain both structured and unstructured detail that candidates have to understand.

Requirements will include demonstrating an understanding of:

the regulatory, professional and ethical issues relevant to accepting, carrying out and
managing assurance engagements; and
how quality assurance processes mitigate risks.

Structuring problems and solutions

Assessed skills
Understanding data and information given: identifying and understanding issues arising in
straightforward scenarios.
Using the data and information given: understanding requirements, analysing data and
information to support the requirement.
Drawing upon technical and professional knowledge learnt to analyse issues.
Understanding the workings of, and controls within, an organisational framework.
Applying knowledge from different technical areas: analysing problems that combine
technical skills in a single disciplinary environment.
Using new concepts: evaluating new ideas and concepts.
Appreciating the ethical dimensions of situations, problems and proposals.
Identifying and selecting appropriate courses of action using an ethical framework.
Financial data analysis: performing the required calculations; explaining or stating the issues.
Financial statement analysis: performing the required analytical process, explaining or
stating the issues.
Identifying and explaining the consequence of unethical behaviour.
Identifying and using relevant up to date content of International and ICAEW Code of Ethics
and FRC Ethical Standards.
Recognising ethical issues arising from situations likely to be encountered by chartered
accountants; identifying possible courses of action to resolve them.

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 How skills are assessed
Requirements will include planning assurance engagements in accordance with the terms of
engagement and appropriate standards, taking account of:
managing audit and other assurance engagements;
reliance on controls;
reliance on the work of internal audit or other experts;
reliance on the work of another auditor;
extent of tests of control and of substantive procedures, including analytical procedures
use of analytical procedures to identify the risk of misstatement; and
number, timing, staffing and location of assurance visits.

Applying judgement
Assessed skills
Applying discrimination: identifying the relevant/reasonable in data and evidence;
recognising varying quality in data or evidence.
Relating parts and wholes: discerning particular issues as part of wholes.
Demonstrating an understanding of different perspectives (eg social, political, economic):
analysing and interpreting problems and situations from a given stance.
Change management (appreciating the impacts/effects of change): considering and
evaluating the effects of a given future scenario.
Assessing/applying materiality: understanding the concept of materiality.
Applying a sceptical and critical approach in a given straightforward situation.
Appreciating when more expert help is required in a given straightforward situation.
Exercising ethical judgement in a given straightforward situation.
Developing arguments, having first appreciated the perspective of all other parties.
Conducting critiques: critically reviewing a statement, argument or position.

How skills are assessed

Candidates will be required to identify significant business or audit risks from a given scenario,
explain their impact on the financial statements, and finally recommend audit procedures to
mitigate the risk of a material error. Requirements will test the ability of candidates to filter
those issues which are more relevant than others in a given scenario.

Candidates' ability to distinguish the quality of data or evidence will be tested in two potential
ways. (i) Candidates will need to distinguish between data generated from within an
organisation and that generated by a third party, the latter being less susceptible to
management bias; and (ii) candidates will need to appreciate the effect on the quality of
evidence that bias caused by specific factors can have eg, where profits are used to determine
a bonus payment to be made to the companys management.

Question requirements will include the need to identify the impact of specific economic and
political factors on a set of financial statements eg, in the context of dealing with customers or
suppliers from overseas that (i) political instability may cause problems which prevent the
customer or supplier from trading, ultimately leading to going concern issues for the audited
entity; and (ii) economic factors may cause exchange rate fluctuations leading to the risk of
misstated balances in the financial statements.

Candidates will be expected to evaluate the effect of uncertain future events when describing
the procedures to be performed in carrying out an examination of a companys financial
forecasts.

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 Question requirements will include the need to assess the materiality of a particular matter (eg,
an unadjusted error) in the context of a set of financial statements. This assessment should
then inform the candidates judgement as to whether or not to modify the opinion given in a
statutory audit report.

Candidates are required to exercise ethical judgement in a variety of different scenarios,

including:
judging the potential independence risks involved in accepting or continuing an audit
engagement, and the procedures to mitigate those risks; and
consideration of the required steps upon the discovery of fraud/money laundering.

Candidates are expected to display the ability to present a structured argument to a client eg,
in situations where management is questioning the extent of audit work performed.

Conclusions, recommendations and communication

Assessed skills
Using technical knowledge to support reasoning and conclusions.
Decision making: using relevant quantitative approaches in decision analysis.
Identifying the best explanation, solution or steps against defined criteria in a given
straightforward situation.
Formulating opinions, reservations, advice, recommendations, plans, solutions, options
and risks including business implications in a given straightforward situation.
Preparing, describing, outlining the advice, report, notes required in a given
straightforward situation.
Presenting a basic or routine memorandum or briefing note in writing in a clear and
concise style.

How skills are assessed

Requirements will include:
advising on the regulatory, professional and ethical issues in carrying out an assurance
engagement;
concluding and reporting on assurance engagements, including determining whether to
a modified report with or without a modified opinion/conclusion; and
identifying weaknesses in financial information systems, their potential consequences
and recommendations for improvement.

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