Audit and

Assurance

Syllabus
A

Audit Framework and regulation

Planning and risk assessment

Internal control

Audit Evidence

Review and reporting

F8 Exam
Question Type

Knowledge

Practical

15

20

60

35

65

12 MCQ =20
marks
6LQ
=80
marks (4*10,
2*20)

Knowledge:

Core Area:

Internal Audit
Corporate governance

Substantive procedures/test of
controls
Internal Controls
Audit risk + Response
Ethics
Audit report

Examiners comments
Differentiating between test of controls and substantive
procedures
Starting the procedure by using the word check
Vague explanation of procedures
Too many or too few

Financial statements Assertions

Transactions & Events

Position/Balance

Revenue & Expense

Asset, liability & Equity

Occurrence

Existence

Accuracy

Valuation & Allocation

Completeness

Completeness

Cut-off

Rights & Obligation

Classification
Presentation & Disclose
Understandabi
lity

Auditor must perform Tests of Control and/or Substantive

procedures to have reasonable assurance over the
assertions:
Audit test

Tests of Control

Substantive procedures

Assess the effectiveness of the

internal control system.

Obtain additional, direct evidence about the

amounts shown in the FS.

Enquiry: Seeking information of

knowledgeable persons over the inside or
outside of the company

Yes. Meeting with employees to

discuss Proper authorization etc.

Yes. Talk with the management companys

operation status

Confirmation (External):obtained as a
direct written response to the auditor from
a third party (the confirming party) in paper
form, electronic medium or other medium.

Yes, to check whether the control is

in place

Yes, to have additional evidence to

confirm /agree with the amounts in FS

Inspection: the examination of records or

documents, whether internal or external

Yes. To inspect how a control is

performed

Yes. To physical counting the inventory.

Observation: looking at a procedure or

process being performed by others

Yes, observing the performance of

control activities.

Yes, the auditors attendance at the

inventory counting by the entitys staff

Recalculation: checking the mathematical

accuracy of documents or records

Yes, recalculation of mass balance

report

Yes, recalculating depreciation of tangible

assets.

Re-Performance: execution of procedures &

controls which were originally performed

Yes, use a junior employee to

access wage information

Yes, re-counting the inventory

Analytical Procedure

NO

Yes, evaluations of financial information

through analysis of both financial and nonfinancial data; investigation of fluctuations
and relationships that are inconsistent with
other relevant information or that differ
from expected values by a significant

F8-2015-June-Q
8

Which of the following is a substantive audit procedure for wages and salaries?

Inspect a sample of clock cards for evidence of authorisation by a responsible official

Recalculate a sample of payroll deductions such as employment taxes to confirm accuracy

Attempt to access and make changes to the payroll master file using the log on for a junior

clerk
(1 mark)

6 (a)
(i)

Identify and explain FOUR financial statement assertions relevant to classes of transactions and

events
for the year under audit; and
(ii)

For each identified assertion, describe a substantive procedure relevant to the audit of REVENUE.
(8 marks)