Advanced Audit and Assurance

Study guide: Seventh edition

The Advanced Audit and Assurance subject provides a body of knowledge for you to understand the nature and diversity of audit and assurance engagements. The subject provides an insight on audit and assurance processes, the methodologies and procedures. It also examines the objectives of assurance engagements and current and future developments in assurance engagements. The environment within which the auditor or assurance practitioner operates, and the respective roles of the private and public sector auditors and internal audit, are also discussed.

In the CPA Program, the professional responsibilities of accountants are discussed in the Ethics and Governance subject. However, this subject emphasises the ethical and professional conduct of auditors. The strategic business analysis techniques in the Advanced Audit and Assurance subject are further discussed in the Strategic Management Accounting and Global Strategy and Leadership subject in their respective context.

This subject and the Contemporary Business Issues subject also cover sustainability reporting and assurance, with an emphasis on businesses. Advanced topics in financial reporting that complement the accounting knowledge of audit professionals are covered in the Financial Reporting subject, and accounting for financial instruments is discussed in the Financial Risk Management subject.

This subject will introduce you to international pronouncements including the international standards for audit, review and assurance engagements, the standard on quality management for audit firms and the code of ethics. You will be taken through case studies to illustrate the strategic approach in audit engagements. Contemporary developments in assurance engagements are discussed in this subject in the context of future practice management opportunities.

General objectives

On completion of this subject, you should be able to:

• understand and apply the framework for assurance engagements in audit and review engagements, and other assurance engagements, and discuss the elements of an assurance engagement
• apply the standards to assurance engagements, and the fundamental ethical principles for the auditing profession
• explain the responsibilities of management and the auditor in relation to an audit
• evaluate historical financial information by applying professional scepticism and judgement
• design audit processes and procedures to be undertaken by auditors in conducting audit and assurance engagements
• evaluate the indicators of potential fraud and recommend a course of action
• apply the relevant auditing standards to the assessment for fraud and going concern in an audit of financial statements
• evaluate the sufficiency and appropriateness of the audit evidence gathered
• apply the appropriate standards that relate to a range of engagement circumstances that impact the auditor's report and the auditor's opinion
• evaluate circumstances that may give rise to modifications to the auditor's report or the auditor's opinion
• describe the various types of assurance engagements.

Exam structure

The Advanced Audit and Assurance exam is compromised of multiple-choice questions.

Subject content

The “weighting” column in the following table provides an indication of the emphasis placed on each module in the exam, while the "recommended proportion of study time" column is a guide for you to allocate your study time for each module.