About 75% of all CPA Common Final Exam (CFE) writers choose Assurance as their role. The reason is that it’s one of the “easier” roles to achieve depth in.
But don’t let this fool you, there is still a lot of material to cover and lengthy practice cases to write. Here are my top 5 tips for passing the CPA PEP Assurance module:
1. Know how to write procedures
Audit procedures are a heavily tested topic; it may come up as part of an Audit Planning Memo or as a separate required. In both cases, follow these best practices:
- Use the RAP template: Risk, Assertion, Procedures
- Make the procedures case specific by integrating case facts
- Write at least 2 procedures for each FR issue
- Make sure the procedures directly address the risk(s)
- Don’t write the procedures in “point form” – use complete sentences
Writing procedures at the C level requires understanding of case writing and takes a lot of practice. I recommend keeping track of procedures as they come up in practice cases. By the end of the module, you will have an inventory of procedures to refer to. If you need a comprehensive template with lots of procedures, contact me to set up a coaching session and I’ll email those to you during our call.
2. Focus on these Assurance topics
There are roughly 23 chapters on Assurance in the Learning eBook, but I find the topics below to be the most commonly tested:
- Audit Planning Memo (APM) – CAS 315, 320, 330
- Assertions (B/S, I/S)
- Audit evidence – CAS 500
- Procedures – CAS 510
- Analytical Procedures – CAS 520
- Special Reports – CAS 805, Section 9100, CSAE 3000/3001, CSAE 3530/3531
- Reviews – CSRE 2400
- Compilations – HB 9200
Start with the above topics, then read the rest of the chapters so that you are well prepared. As you’re reading the Learning eBook, make concise summary notes for yourself. It also helps to use different colours of pens/fonts to separate the different concepts.
3. Qual matters more in Assurance
The qual analysis makes up 90% of the case in Assurance, while quant analysis is a very minor part. From my experience, most candidates fail due to either time management issues or inability to write at the C level. Here are the best practices of writing the qualitative analysis in your cases:
- Use bullet lists to organize your memo
- Use formatting to separate the issues (eg bolding, underlining, italicize)
- Keep your writing concise but deep enough for a C
- Have templates in mind for the common topics (eg RAP and VOOP for procedures, RAMP for Audit Planning Memo, WIR for control weaknesses, SAPPY for special reports, RRIIO APEX for audit evidence.)
- Come up with memory aids to chunk big technicals (eg IS COCCA CERV’d in BoSton? tells you all the assertions: Income Statement: Completeness, Occurrence, Cut-off, Classification, Accuracy // Completeness, Existence, Rights & obligations, Valuation in Balance Sheet).
Case writing is both a science and an art, the best strategy is to write lots of cases and to debrief effectively.
4. Manage your time well on the exam
It’s important that you manage your time on the exams. This means knowing how to Rank and Time Budget.
- The Assurance elective blueprint tells that 50-70% of the exam is Assurance and 20-40% is FR.
- Start your cases with FR and then write Assurance and any other areas
- The FR topics may impact your Assurance analysis (eg materiality calculation), so it’s important to rank these first
- Write FR topics in any order, as long as you address all of them
- The Assurance blueprint tells that the cases are 80-120 minutes in length
- Allocate about 20% of the case’s time on reading the case and the rest on solving the requireds
- Spend roughly 8-10 minutes on each issue and move on when you reach your time limit
5. Write more practice cases
You will get 8 practice cases (PCs) and 8 integrative problems (IPs) in the module. Unfortunately, those PCs and IPs don’t fully prepare you for the exam, since they don’t cover every AO that you may possibly see on the exam.
I provide four (4) original Assurance supplemental mock exam practice cases to help you improve your case writing skills and broaden your technicals. They cover a range of AOs, including:
- Business combination (IFRS)
- Sale and leaseback
- Lease from lessor’s perspective
- Held-for-sale assets
- Biological assets
- Government assistance
- Convertible debt
- Special engagements
- Use of an auditor’s expert
- Test of control procedures
- Substantive procedures
- Impact of misstatements
Head over to the cases section of my website to learn more. Most of the above topics are not covered in the Assurance module, but they come up on the exam over and over. If you have any questions or need additional help, I’m here for email support.
Assurance Practice Cases and Solutions
Preview and purchase the supplementary mock exam cases to improve your case writing skills and take on the Assurance module.