CA ANZ Core 5 common mistakes
CA ANZ Core 5 · Understand the traps and how to avoid them.
In calculation questions the candidate jumps straight to the arithmetic without first deciding which accounting framework or measurement basis applies (for example, choosing between cost and revaluation, or between the cost method and the equity method), and only afterwards notices that the required inputs are missing or the wrong basis was used.
Under time pressure the numeric surface of the question feels like the fastest route to an answer, and candidates rely on the calculation they practised most recently rather than reading the requirement and the facts that constrain the method.
What to do instead
Before calculating, write one line identifying the standard or framework, the measurement basis, and the two or three figures the method requires. If any required figure is absent, stop and re-read the stem, because that absence usually signals a different method is intended.
When preparing consolidated statements the candidate adds the parent's and subsidiary's asset and liability balances line by line and reports the total without eliminating the investment in the subsidiary, intragroup receivables and payables, intragroup sales and purchases, or unrealised profit in inventory.
The consolidation schedule looks like a summation exercise, and the elimination entries are invisible in the individual ledgers, so candidates who work mechanically from the trial balances omit them.
What to do instead
Build a standing elimination checklist (investment against equity plus acquisition-date adjustments, intragroup balances, intragroup income and expense, unrealised profit, dividends) and tick each item before finalising totals. Practise writing the journal for each elimination until it is automatic.
In variance analysis the candidate computes every variance as a single figure and labels it favourable or unfavourable by sign alone, without separating price and efficiency components or checking which factor actually caused the variance.
Candidates memorise formulas but not the logic of the responsibility model, so a negative number is treated as bad and a positive one as good regardless of the perspective (for example, a favourable purchase price variance caused by buying lower-grade material).
What to do instead
For each variance state the formula, the responsible manager, and the likely operational cause before assigning favourable or unfavourable. Where a variance could be caused by a quality trade-off, say so explicitly, because examiners often award marks for the interpretation rather than the number.
The candidate answers an audit risk question by listing generic risks ('the client may misstate revenue') without linking each risk to the specific facts in the scenario, the affected assertion, and a responsive audit procedure.
Risk identification feels like a recall task, and candidates reproduce a memorised list instead of analysing the facts given, which is what the question actually rewards.
What to do instead
Use a fixed three-column structure for every risk answer: fact from the scenario, assertion at risk, and one specific procedure that responds to it. If a risk cannot be tied to a stated fact, it does not belong in the answer.
The candidate mixes up the purpose of substantive testing and tests of controls, or recommends increasing sample sizes as the response to a control deficiency rather than redesigning the audit approach.
The concepts are taught together and both involve sampling, so candidates conflate 'test more items' with 'obtain different evidence', and they default to the familiar tool of sample size.
What to do instead
State the purpose of each test in one sentence before answering (controls: operating effectiveness; substantive: detection of material misstatement). When controls are ineffective, the correct response is to rely less on controls and perform more or different substantive procedures, not simply to enlarge the sample.
In tax questions the candidate applies the corporate tax rate to an accounting profit figure without adjusting for non-deductible expenses, non-assessable income, temporary differences, or the correct timing of recognition, and treats the result as the tax expense.
Accounting profit is the most visible number in the stem, and the reconciliation from accounting profit to taxable income is a multi-step process that candidates skip when time is short.
What to do instead
Always run an explicit reconciliation: start with accounting profit, add back non-deductible items, deduct non-assessable items, adjust for temporary differences, apply the rate, then separately address deferred tax. Show the reconciliation in the answer even when only the final figure is requested, because it earns method marks.
In capital budgeting and valuation questions the candidate discounts the wrong cash flows, for example including sunk costs, ignoring working capital recovery, omitting tax on the sale of an asset, or discounting accounting profit rather than cash flow.
The mechanics of discounting are easy to practise, so candidates focus on the arithmetic and treat the cash flow identification as trivial, when in fact most of the marks sit in the cash flow schedule.
What to do instead
Build the cash flow schedule in a fixed order: initial outlay, incremental operating cash flows after tax, working capital movements, terminal value including after-tax salvage. Explicitly exclude sunk costs and allocated fixed overhead, and state the treatment of each item in one line.
The candidate answers strategy and governance questions by describing what the organisation should do, without naming the analytical framework, the governance body, or the statutory duty that makes the recommendation defensible.
These domains read as discursive, so candidates write plausible prose, but the marking guide rewards the correct framework (for example, a five forces or value chain analysis) and the correct source of authority (for example, directors' duties or a specific listing rule).
What to do instead
Open each answer by naming the framework or the governing rule, apply it step by step to the scenario facts, and finish with a recommendation that follows from the analysis. If the question asks who is responsible, name the board, committee, or officer rather than 'management'.
In business law and ethics questions the candidate identifies the legal issue correctly but stops there, failing to apply the relevant element or test (for example, offer, acceptance, consideration and intention, or a conflicts-of-interest disclosure obligation) to the facts and reach a conclusion.
Candidates treat issue-spotting as the whole answer and run out of time or words before the application stage, which is where most marks are allocated.
What to do instead
Use an issue, rule, application, conclusion structure for every scenario. Reserve roughly equal space for rule and application, and always finish with a definite conclusion even if it is qualified, because an unanswered 'is there a contract?' loses the marks attached to it.
In data analytics and information systems questions the candidate recommends a tool or technology ('use a dashboard', 'automate the reconciliation') without specifying the data required, the test performed, and the audit or business assertion it addresses.
Technology questions invite enthusiasm about tools, and candidates answer at the level of general capability rather than the specific procedure and evidence the tool produces.
What to do instead
For each recommendation state three things: the data population and its completeness check, the specific test or analysis performed, and the assertion or decision it supports. If the recommendation cannot be tied to an assertion, replace it with one that can.