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What does the term 'risk of material misstatement' comprise?
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2026 Statistics
Key Facts: ACCA AA Exam
3 hours
Session CBE Duration
ACCA AA Syllabus and Study Guide
50%
Pass Mark
ACCA Exam Regulations
30 marks
Section A OT Cases
ACCA AA Syllabus and Study Guide
5 areas
Syllabus Areas A-E
ACCA AA Syllabus and Study Guide
~40%
Typical Pass Rate
ACCA Results Announcements
ISAs
Standards Examined
IAASB / ACCA
ACCA AA (Audit and Assurance) is a 3-hour session computer-based exam at the Applied Skills level. Section A has three objective test case questions worth 30 marks in total (five 2-mark OTs each); Section B has three constructed-response questions, one worth 30 marks and two worth 20 marks. The pass mark is 50%, consistent with all ACCA exams. The syllabus has five areas: A Audit framework and regulation, B Planning and risk assessment, C Internal control, D Audit evidence, and E Review and reporting, all grounded in the International Standards on Auditing. The current syllabus edition runs from September 2025 to June 2026.
Sample ACCA AA Practice Questions
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1Which statement best describes the objective of an external audit of financial statements under International Standards on Auditing?
A.To obtain reasonable assurance that the financial statements as a whole are free from material misstatement and to express an opinion
B.To provide absolute assurance that the financial statements contain no errors of any kind
C.To detect and report all instances of fraud committed by management and employees
D.To prepare the financial statements on behalf of the directors of the entity
Explanation: ISA 200 states the objective of an audit is to obtain reasonable (high but not absolute) assurance about whether the financial statements as a whole are free from material misstatement, enabling the auditor to express an opinion. Reasonable assurance is the highest level of assurance provided by a statutory audit.
2In an assurance engagement, which element refers to the information against which the subject matter is evaluated?
A.Sufficient appropriate evidence
B.Suitable criteria
C.The three-party relationship
D.The assurance report
Explanation: An assurance engagement has five elements: a three-party relationship, subject matter, suitable criteria, sufficient appropriate evidence, and a written report. Criteria are the benchmarks (such as an applicable financial reporting framework) used to evaluate or measure the subject matter.
3A review engagement that expresses a conclusion in the form 'nothing has come to our attention' provides what level of assurance?
A.Reasonable assurance, expressed positively
B.Absolute assurance, expressed positively
C.Limited assurance, expressed negatively
D.No assurance at all
Explanation: A review engagement provides limited (moderate) assurance, lower than the reasonable assurance of an audit. The conclusion is expressed in a negative form: that nothing has come to the practitioner's attention indicating the subject matter is materially misstated.
4Which of the following is a fundamental principle of the ACCA Code of Ethics and Conduct?
A.Materiality
B.Going concern
C.Substance over form
D.Integrity
Explanation: The five fundamental principles in the IESBA/ACCA Code are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Integrity requires the auditor to be straightforward and honest in all professional and business relationships.
5An audit firm's fees from a single listed client have represented more than 15% of total firm income for two consecutive years. Which threat to independence is most clearly created?
A.Self-interest threat from fee dependency
B.Advocacy threat from promoting the client
C.Familiarity threat from long association
D.Intimidation threat from litigation
Explanation: Where total fees from a public interest entity exceed 15% of the firm's total fees for two consecutive years, a self-interest threat arises because the firm becomes financially dependent on the client and may be reluctant to issue an unfavourable opinion. The Code requires disclosure to those charged with governance and a pre- or post-issuance review.
6The audit engagement partner has acted for the same listed audit client for seven consecutive years. What safeguard does the Code require?
A.Resignation of the entire audit firm immediately
B.Rotation of the engagement partner after a maximum period of service
C.An increase in the audit fee to reflect added risk
D.Obtaining written representations from the directors
Explanation: For public interest entities, long association of senior personnel creates a familiarity and self-interest threat. The Code requires partner rotation; the engagement partner generally serves a maximum of seven years and must then rotate off and observe a cooling-off period before returning.
7Under the principle of confidentiality, in which circumstance may an auditor disclose client information to a third party without breaching the Code?
A.Whenever another client of the firm would find the information useful
B.Whenever the auditor personally disagrees with the client's management
C.Where disclosure is required by law, such as a court order or anti-money-laundering legislation
D.To improve the firm's reputation by publicising the engagement
Explanation: Confidentiality may be overridden where disclosure is required by law (for example, to comply with legal proceedings or to report money laundering), permitted by law and authorised by the client, or where there is a professional duty or right to disclose. Disclosure must otherwise not occur without proper and specific authority.
8Which body is responsible for issuing the International Standards on Auditing (ISAs) used as the basis for the ACCA AA exam?
A.The International Accounting Standards Board (IASB)
B.The International Ethics Standards Board for Accountants (IESBA)
C.The Financial Reporting Council (FRC)
D.The International Auditing and Assurance Standards Board (IAASB)
Explanation: The IAASB sets the International Standards on Auditing (ISAs) and related quality management and assurance standards. The AA syllabus is examined on the basis of these ISAs.
9What is the primary purpose of an audit committee within a listed company's corporate governance structure?
A.To oversee the integrity of financial reporting and the relationship with the external auditor
B.To prepare the company's financial statements for audit
C.To set the executive directors' day-to-day operating budgets
D.To replace the external auditor's substantive testing
Explanation: An audit committee, normally composed of independent non-executive directors, monitors the integrity of financial reporting, reviews internal control and risk management, oversees the internal audit function and manages the relationship with the external auditor, including their appointment, remuneration and independence.
10Which of the following best describes the 'expectation gap' in auditing?
A.The difference between planning materiality and performance materiality
B.The difference between what the public believes auditors do and what auditors actually do
C.The gap between the year-end date and the date the auditor's report is signed
D.The difference between budgeted and actual audit hours on an engagement
Explanation: The expectation gap is the difference between the responsibilities users believe auditors have, such as detecting all fraud or guaranteeing the entity's survival, and the auditor's actual responsibilities under ISAs. The auditor's report includes wording to help narrow this gap.
About the ACCA AA Practice Questions
Verified exam format metadata for ACCA Applied Skills — Audit and Assurance (AA) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.