Audit and Assurance (AA) is the eighth exam of your ACCA journey that you will be required to appear in and the fifth exam of the ACCA skills level. Audit and Assurance (AA) will introduce the students to the nature, scope, and procedures for audit and assurance engagements. NCFM Academy Hyderabad is one of ACCA tuition providers in Hyderabad India offers ACCA Paper F8 Audit and Assurance (AA) course in Ameerpet.
Audit and Assurance (AA) is a three-hour computer-based examination where all questions will be compulsory. All areas of the syllabus will be tested. The paper will be based on computational and discursive elements and some questions will have a scenario or case study like approach. Prior to the start of the three hours of the exam, students will be given ten minutes to read the exam instructions.
Section A of the exam comprises three 10 mark case-based questions. Each case has five objective test questions worth 2 marks each.
Section B of the exam comprises one 30 mark question and two 20 mark questions. Section B of the exam will predominantly examine one or more aspects of audit and assurance from planning and risk assessment, internal control or audit evidence, although topics from other syllabus areas may also be included.
Syllabus of ACCA Paper F8 Audit and Assurance
The syllabus is divided into five sections with further sub-sections.
A- Audit framework and regulation
This is the first section of this course and it introduces the students to the concept and scope, needs for and objectives of the audit and other types of assurance engagements. This section will cover the topic of external audits and various procedures, regulatory frameworks, and protocols necessary to maintain the objectivity of the auditors during the engagement. Students will learn about the importance of corporate governance and its objectives and relevance, students will need to identify best corporate governance practices, duties of directors and the weaknesses in the corporate governance structure of an entity and the recommendations to overcome those weaknesses.
Students will be introduced to the five fundamentals of professional ethics and the ACCA`s code of ethics and conduct. Students will be required to understand the responsibilities of an auditor in situations that create a threat to professional independence and identify the threats to their professional ethics and respond with appropriate safeguards to different scenarios.
B- Planning and risk assessment
This is the second section of this course and it will introduce the students to the planning process for an audit engagement and the risk assessment process. Students will be introduced to the preliminary audit activities, preconditions of audit and the processes and procedures which are required under ISA for an audit engagement. Students will be required to identify the overall objectives of the auditor and the need to conduct an audit in accordance with ISAs and understand the need to plan and perform audit work with professional skepticism and judgment.
This section will cover the audit risks in detail. Students will be required to be familiar with the process of assessing audit risk and the different types and categories of audit risk an auditor is expected to come across. Concepts of materiality and performance materiality will be introduced and students will be required to calculate levels of materiality.
Students will learn the importance and the different procedures auditors carry to obtain an initial understanding of the entity and its environment to help in planning and carrying out audit engagement.
This section will also cover fraud and relevant laws and regulations. Students will learn about fraud and its impact on the overall nature of audit engagement and the role of management and external auditors to detect, prevent and address an instance of fraud.
This section also covers the need and importance for audit planning and the different activities and procedures auditors undertake to plan the audit. The difference between internal and external audit will be covered. Students will learn about audit documentation and the reports which need to be maintained and retained during and after an audit of an entity.
C- Internal control
This is the third section of this course and it focuses upon the internal control environment of an entity. Students will learn why auditors need to understand the internal control environment and systems in place in an entity. Students will be introduced to the five essential components of internal control and why their understanding is necessary for an auditor in order to achieve a comprehensive level of assessment of the strength of internal control systems of the entity under review. This section also covers the communication auditors need to make to address the deficiencies in the internal control systems.
Students will learn about different tests of control related to different areas of operation
D- Audit evidence
This is the fourth section of this course and it will cover the need and importance of audit evidence. Students will learn about the underlying assertions which make up the financial statements and how these assertions affect the audit work.
Students will understand and learn about the need for audit evidence. This section will build upon your earlier studies regarding the importance, quality, and relevance of information and data. Students will learn different methods of collecting audit evidence.
This section will introduce different procedures auditors perform on the data gathered during the course of an audit engagement. Students will learn about analytical procedures and limitations. Tests of control and substantive procedures will be introduced to the students and the different audit procedures which are carried out on specific items and classes of transactions such as payables, receivables, current and non-current assets, current and non-current liabilities. Students will be introduced to the usage and need for computer-assisted audit techniques.
This section will also cover the audit procedures required to assess the work of others and the degree of reliance auditors can place on such work. Audit techniques for not-for-profit organizations will also be covered under this section.
E- Review and reporting
This is the fifth and final section of this course and it will cover the review process and the finalized audit report. This section will introduce subsequent events and the audit procedures required to assess their importance, relevance, and materiality. Students will learn about the importance of the going concern assumption for the entity and the audit procedures required to ascertain this assumption.
This section will also cover the importance and need for written representations from the managers and those charged with governance and the situations where written representations are obtained.
Students will understand the importance and procedures for an overall review of the audit process to ensure sufficient appropriate audit evidence has been obtained and the effect of any material misstatement in the financial statements which may not have been detected in the audit process.