EPSO Auditors cheat sheet

ISA 200: reasonable assurance is a high but not absolute level; inherent limitations include sampling risk, estimation uncertainty and fraud concealment.

Audit risk model: AR = IR × CR × DR. Detection risk is the only component the auditor controls directly, through the nature, timing and extent of procedures.

Materiality: performance materiality is set below overall materiality to reduce the probability that uncorrected and undetected misstatements exceed overall materiality.

ISA 315 (Revised 2019): identify significant risks as those close to the upper end of the spectrum of inherent risk, judged on likelihood and magnitude, before considering controls.

ISA 700/701: KAMs are selected from matters communicated with those charged with governance; a matter need not be a significant risk to qualify as a KAM.

ISA 570 going concern: the auditor evaluates management's assessment covering at least 12 months from the reporting date (or a shorter period if justified).

Opinion types: unmodified; qualified (material but not pervasive); adverse (material and pervasive misstatement); disclaimer (inability to obtain sufficient evidence, material and pervasive).

ISA 240 fraud: presumed risk of fraud in revenue recognition; the auditor must rebut it expressly in the documentation if not treated as a risk.

IFRS 15 five-step model: identify the contract; identify performance obligations; determine transaction price; allocate to obligations; recognise revenue on satisfaction.

IFRS 16 lessee: recognise a right-of-use asset and a lease liability at the present value of lease payments; short-term (≤12 months) and low-value leases are exempt.

IFRS 9 impairment: expected credit losses use a three-stage model; stage 1 recognises 12-month ECL, stages 2 and 3 recognise lifetime ECL.

IFRS 9 classification of financial assets turns on the business model and the contractual cash flow characteristics (SPPI) test.

IAS 36: an impairment loss is recognised when the carrying amount exceeds the recoverable amount, defined as the higher of fair value less costs of disposal and value in use.

IAS 37: a provision is recognised only when a present obligation exists, an outflow is probable, and the amount can be reliably estimated.

IAS 21: foreign currency transactions are translated at the spot rate on the transaction date; monetary items are retranslated at the closing rate.

Consolidation (IFRS 10): control exists with power over the investee, exposure to variable returns, and the ability to use power to affect those returns.

TFEU Article 310 and the Financial Regulation (EU, Euratom) 2018/1046 require sound financial management, defined by the principles of economy, efficiency and effectiveness.

Budgetary principles: unity, annuality, equilibrium, unit of account, universality, specification and sound financial management; the budget is adopted by the European Parliament and the Council.

The Court of Auditors (TFEU Art. 285) audits all revenue and expenditure and issues an annual statement of assurance (DAS) to the European Parliament and the Council.

OLAF (Regulation 883/2013) investigates fraud, corruption and irregularities affecting the EU's financial interests; it has no judicial powers.

EPPO (Regulation 2017/1939) is an enhanced cooperation body competent to investigate and prosecute crimes against the EU budget.

Financial Regulation: the authorising officer by delegation is responsible for legality and regularity; the accounting officer for accounts; the internal auditor applies IIA standards.

Horizon Europe (Regulation 2021/695) funds research; eligible costs must be actual, incurred during the action, necessary and recorded in the beneficiary's accounts.

TFEU Art. 325 obliges Member States and the Union to counter fraud affecting the Union's financial interests through effective and dissuasive measures.

Judge validity against the passage only; external knowledge, even if true, is not a basis for a valid answer.

True means the statement follows logically from the passage; false means it contradicts it; cannot say means the passage neither supports nor contradicts it.

Quantifiers matter: 'all', 'some', 'most' and 'only' change the truth conditions; 'most A are B' does not entail 'all A are B'.

Watch for scope shifts: a statement about a subclass is not established by a claim about the whole class.

Distinguish correlation from causation; a passage reporting an association does not support a causal claim unless it says so.

Extreme wording ('never', 'always', 'exclusively') is valid only if the passage uses equally absolute language.

Temporal order matters: a fact stated as happening after another cannot be used to support a claim about what happened before.

Answer the question asked; a statement that is true but irrelevant to the question is not the correct option.

Percentage change = (new − old) / old × 100; percentage points measure the difference between two percentages, not a relative change.

Compound growth: final = initial × (1 + r)^n; reverse by taking the nth root to recover the annual rate.

Weighted average = Σ(value × weight) / Σ(weight); equal weighting of unequal groups is a common distractor.

Ratios: to divide an amount in ratio a:b:c, the shares are a/(a+b+c), b/(a+b+c), c/(a+b+c) of the total.

Index numbers: value in index points = base value × index/100; rebase by dividing each index by the new base index and multiplying by 100.

Margin versus markup: margin = profit/revenue; markup = profit/cost. A 25% margin equals a 33.3% markup.

Estimate before computing: round to one significant figure to eliminate implausible options, then compute exactly only if needed.

Unit traps: check whether figures are in thousands, millions or percentages, and whether a rate is annual or monthly.

Count elements per cell to detect arithmetic progressions (+1, +2, −1) across a sequence.

Track rotation direction and step: 90° clockwise per step differs from 45° counter-clockwise; note whether the whole figure or one element rotates.

Classify transformations: rotation preserves orientation; reflection reverses it; translation changes neither.

Check alternation: two interleaved sequences (odd positions, even positions) often govern shape, colour and position independently.

Superposition rules: elements may be added (union), removed (intersection), or toggled (XOR) between consecutive frames.

Shading and fill often follow their own rule independent of shape movement; track them separately.

Symmetry axes, number of sides and number of intersections are frequent numeric attributes; count them before assuming a visual rule.

Eliminate options that break the established rule for a single attribute; the correct option satisfies all rules simultaneously.