Audit & Assurance - The Malaysian Institute Of Certified Public

Audit & Assurance
(2) 2011
Module outline
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AAA211 Module outline v3
The Chartered Accountants Program
About the Chartered Accountants Program
Objectives of the Program
Learning & Assessment Guide (LAG)
Audit & Assurance (AAA)
Module objectives
Assumed knowledge
Time allocation
Candidate Learning Pack (CLP)
Focus sessions
Prescribed reading materials
Additional resources
Audit & Assurance (2) 2011 • Module Overview
Module Overview • Audit & Assurance (2) 2011
The Chartered Accountants Program
About the Chartered Accountants Program
The Chartered Accountants Program (the Program) is the formal educational requirement
for membership of the Institute of Chartered Accountants in Australia (the Institute).
The Institute is the only Australian professional accounting body recognised by the major
accounting bodies worldwide, and is a founding member of the international accounting
coalition, the Global Accounting Alliance (GAA).
The GAA was formed in November 2005 and is an alliance of leading professional
accountancy bodies in significant capital markets. It was created to promote quality services,
share information and collaborate on important international issues. The GAA works with
national regulators, governments and stakeholders, through member-body collaboration,
articulation of consensus views, and working in collaboration where possible with other
international bodies, especially the International Federation of Accountants (IFAC).
The GAA facilitates a co-operation between 11 of the world’s leading professional
accounting organisations:
> The American Institute of Certified Public Accountants (AICPA)
> Canadian Institute of Chartered Accountants (CICA)
> Hong Kong Institute of Certified Public Accountants (HKICPA)
> Institute of Chartered Accountants in Australia (ICAA)
> Institute of Chartered Accountants in England and Wales (ICAEW)
> Chartered Accountants Ireland (ICAI)
> Institute of Chartered Accountants of Scotland (ICAS)
> The Japanese Institute of Certified Public Accountants (JICPA)
> New Zealand Institute of Chartered Accountants (NZICA)
> South African Institute of Chartered Accountants (SAICA)
> Institut der Wirtschaftsprüfer in Deutschland e.V. (IDW).
These organisations represent over 775,000 of the world’s leading professional accountants
in over 165 countries from around the globe.
The Chartered Accountants Program is also recognised as a Graduate Diploma * by
higher education authorities in Australia. Successful completion of the Program and
the subsequent awarding of a Graduate Diploma provide candidates with substantial
exemptions for Masters programs in many Australian universities.
The Grad Dip CA comprises the following five modules:
1. Taxation (TAX)
2. Audit & Assurance (AAA)
3. Management Accounting & Analysis (MAA)
4. Financial Accounting & Reporting (FIN)
5. Ethics & Business Application (EBA).
* Applicable only to candidates who successfully complete all five modules of the CA Program developed by the
Audit & Assurance (2) 2011 • Module Overview
Of the five modules, the first four are technical modules and can be undertaken in any
order. The final module, Ethics & Business Application (EBA), focuses on ethics and corporate
governance as well as consolidating the learning from the four technical modules. Modules
are not undertaken concurrently.
Figure 1: Five Program Modules
On successful completion of EBA, candidates will be awarded the Grad Dip CA and will
then also be eligible to apply for membership with the Institute.
Objectives of the Program
The Program is designed to equip candidates with the knowledge, skills and values
identified as essential in a Chartered Accountant. These have been expanded into the
following 10 attributes:
> informed about the latest international, disciplinary and business knowledge
> innovative problem solvers
> forward-thinking change managers
> technology-literate
> collaborative team workers
> capable communicators of shared understandings
> service-oriented
> ethical
> professional
> reflective about their own knowledge, skills and values
Developing these attributes in a holistic manner is an integral feature of the Program.
Learning & Assessment Guide (LAG)
Additional information about the Program can be found in the Chartered Accountants
Program Learning & Assessment Guide (LAG) in the candidate section of myCA.
The LAG contains comprehensive information about:
> Policies and regulations
> Code of academic conduct
> Regional offices and key contacts
> Learning resources
Module Overview • Audit & Assurance (2) 2011
> Further assistance and support.
Candidates can access myCA via <> or, alternatively,
Audit & Assurance (AAA)
This module explains the framework for auditing and assurance. Broadly, the four units
examine the following areas:
> Unit 1: Planning the audit
– The process for the audit of a general purpose financial report
Accounting Professional and Ethical Standards Board statements, audit regulations
from the Corporations Act 2001 and case law
– Australian Auditing Standards: Introduction
– Overall responsibilities in conducting the audit
– Risk assessment (planning)
> Unit 2: Conducting the audit
– The risk response
– Using the work of others
> Unit 3: Audit evidence, evaluation, reporting and internal audit
– Evaluation of audit evidence
– Formulating audit opinions and reporting considerations
– Role and purpose of the internal auditor
> Unit 4: Other aspects of the audit and assurance framework
– Other assurance engagements
– Public sector reporting and accountability environment
– The role of the external auditor in the public sector
– The future of assurance.
Module objectives
The overall objective of AAA is for candidates to develop skills which will enable them
> plan, perform and report on assurance engagements in a professional manner, and
> use professional and ethical judgement in applying relevant legal and professional
pronouncements to all stages of a given assurance engagement.
Audit & Assurance (2) 2011 • Module Overview
Assumed knowledge
Apart from a strong undergraduate knowledge of auditing, it is also assumed that you
have the following:
> a good understanding of financial accounting and preparation of general purpose
financial reports
> a basic understanding of Australian Accounting Standards (AASBs)
> a basic understanding of Australian Auditing Standards (ASAs)
> a good understanding of standard business cycles and processes, and how they are
accounted for, including:
– sales – how a sale is initially recorded in an entity’s accounting system, and then
how it flows through the system; debits and credits recorded when the sale is a
cash sale; debits and credits that are recorded when the sale is on credit
– credit notes – how credit notes are recorded and their impact on the accounting
system of an entity on sales and accounts receivable balances
– revenue – how revenue from a sale is recorded in an entity’s accounts (immediately
or over a period of time)
– accounts receivable/debtors – where a sale is made on credit, how the accounts
receivable that results from that sale is dealt with by an entity and its accounting
system; recording the accounts receivable; recording the provision for doubtful
debts; writing off the accounts receivable balance if the receivable balance is not
– purchases – how the purchase of a good or service by an entity is recorded in an
entity’s accounting system, and then how it flows through the system; how debits
and credits are recorded when a purchase is made using cash or on credit
– accounts payable/creditors – where a purchase is made on credit, how the
accounts payable that results from that purchase is dealt with by an entity and its
accounting system; recording the accounts payable; recording the payment of the
accounts payable balance
– inventory – having a basic understanding that when items are purchased for
manufacture by an entity, that those items go through the entity’s inventory
and COGS (cost of goods sold) accounts rather than being recorded directly in
– expenses – how items purchased through the accounts payable system end up
being recorded in the expense accounts of an entity; how items end up being
recorded in expense accounts from sources outside of the accounts payable subledger or system
– payroll – a basic understanding of the components of payroll and how it is all
recorded by an entity (e.g. gross salary, superannuation contributions, workers’
compensation payments, payroll tax, and PAYG payments); how accounting for
payroll is impacted if payments are made in cash versus via electronic transfer or
– property, plant and equipment (PP&E) – a basic understanding of how items of
PP&E are recorded by an entity and how associated depreciation is recorded to
the entity’s expense accounts, and where applicable, how impairments of PP&E
are recorded
Module Overview • Audit & Assurance (2) 2011
– intangible assets, impairment and amortisation – a basic understanding of how
intangible assets are recorded in an entity’s accounts, when and how the principles
of amortisation are to be applied and how the impairment of intangible assets is
> a good understanding of how each of the accounting cycles/sub-ledgers, outlined
above, feed into the ultimate preparation of an entity’s financial statements
> a good understanding of the role and importance of auditing in providing investors
with independent verification of general purpose financial reports.
Time allocation
The expected workload for this module is approximately 120 hours. The breakdown
of the 120 hours is approximately as follows:
Hours per unit
Hours of work
4 units
Focus sessions
Exam (including 15 minutes reading time)
CLP reading, activities, myCA participation
* The first focus session has an additional 15 minutes for the welcome and introductions.
This is only a guide, depending on various factors and circumstances, and does not include
time that candidates allocate to studying for the final exam.
The assessment components are outlined below:
> Project – 20%
> Four focus sessions – 10% (attendance is compulsory)
> Final examination – 70%.
Assessment component
Contribution to final marks
An individual project submitted between Focus
Session 2 and Focus Session 3
Focus sessions
Attendance at focus sessions is compulsory. Each
of the four focus sessions will include:
> Block 1 – Unit review
> Block 2 – Candidate facilitation/presentation
> Block 3 – Comprehensive activity review
> Block 4 – Exam Practice Question (EPQ) review
and recap
Final examination
Any element of the syllabus may be covered in
four compulsory multi-part written questions (three
(3) hours plus 15 minutes reading time)
To pass the module, you must pass the exam (achieve 50% or more of the available
marks), pass the module overall and attend all four focus sessions. This is because each
assessment component examines different combinations of the attributes cultivated by
Audit & Assurance (2) 2011 • Module Overview
the Program. The exam is also the only assessment piece performed within stringent
individual conditions, guaranteeing the assessment of the knowledge, skills and values
built by the Program.
Candidate Learning Pack (CLP)
The CLP is the primary learning resource and contains comprehensive learning material
for all four units of study, including worked examples and activities. Candidates can
work through the CLP either independently or in collaboration with their colleagues
or mentors.
This is a web-based learning portal which is used to provide announcements and study
material to candidates, as well as access to a candidate peer discussion forum.
Focus sessions
The focus sessions follow the same path as the module, that is, with content taken from
the relevant unit. Marks have been reintroduced to focus sessions (starting from Term 2,
2011) for each of the four technical modules (not for the EBA module). Marks will be
released to candidates prior to the final exam. For more information on how the marks
will be awarded and their breakdown, please see the Learning & Assessment Guide (LAG)
on myCA.
Activity solutions (except for those reviewed in focus sessions) will be released at
commencement. The solutions to activities for review and the comprehensive activity
solution will be released on myCA on the last Friday of the relevant focus session week.
All the EPQ solutions will be released on myCA after the final focus session. Please check
the Chartered Accountants Program timetable for the focus session week dates.
Prescribed reading materials
The required reference for AAA is:
> The Institute of Chartered Accountants in Australia, Auditing and assurance handbook
2011, John Wiley & Sons Australia, Ltd, Milton, Qld
Additional resources
The following material will also provide additional support for candidates and will
be referred to in the CLP:
> copies of two past exam papers, including solutions and examiners’ feedback
> Accounting & auditing news today (ANT), available online at <charteredaccountants.>
Module Overview • Audit & Assurance (2) 2011
> Gay, G and Simnett, R 2009, Auditing and assurance services in Australia, 4th edn,
McGraw-Hill, Sydney
> Roebuck, P and Martinov-Bennie, N 2010, Case studies in auditing and assurance, 5th
edn, LexisNexis Butterworths, Sydney
> Chandler, J 2009, Auditing road map: A simple guide to the auditing process, Centennial
Books, Sydney. Available by contacting
> The Institute of Chartered Accountants in Australia 2010, Australian Audit Manual and
Toolkit 2010, Using Clarity Standards (Australian Audit Manual), October 2010, available
online on myCA.
With the exception of the Auditing road map (available for purchase at, the above recommended texts are available for purchase from
the UNSW bookshop.
Audit & Assurance (2) 2011 • Module Overview