SC E-Learning

CAF-8: Audit and Assurance

Competency
Apply knowledge of general concepts, principles, skills and techniques of auditing and selected
International Standards on Auditing, Assurance and Ethics.

Syllabus GRID Teaching Weightage

Ref. hours
A Audit Framework, Regulations and Professional Ethics 25-30 15-25
B Planning and Risk Assessment 20-25 15-20
C Audit Evidence and Internal Controls 50-55 45-55
D Conclusion and Reporting 15-20 10-15
Total 110-130 100

Syllabus GRID Topics Marks

Ref.
 ISA 200 & Basic & Auditing
Audit Framework,  ISA 210 & 220 15-25
A Regulation &  Code of Ethics
Professional Ethics
 ISA 300, 315, 320 & 330
Planning & Risk Assessment  ISA 230 & 240
B 15-20
 ISA 500, 501 & 505
 ISA 520, 530 & 550
 ISA 560, 570 & 580 45-55
 ISA 610 & 620
Audit Evidence & Internal  Internal Controls & IT Controls
C Controls  Test of Controls
 Substantive Procedures

 ISA 700, 701, 705 & 706 10-15

D Conclusion & Reporting  ISRE 2400

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning

Key Examinable Technical Competencies

Syllabus Proficiency Testing

Learning Outcomes
Ref. Level Level
A. Audit Framework, Regulations and Professional Ethics
a Basic Concepts
1. Describe briefly the history, vision, mission, objectives and
functions of the international auditing and assurance
standards board (IAASB).
2. Discuss the types, scope and inherent limitations of an
External Audit.
3. Discuss the concepts of true and fair view, professional P1 T1
skepticism, professional judgement, accountability and
stewardship.
4. Discuss the responsibility of management, those charged
with governance and external auditors in relation to
financial statements.
b Concept of Assurance and Non-Assurance Engagements
1. Discuss the types and levels of the assurance engagement.
2. Discuss briefly the non-assurance engagements related to P1 T1
Preparing Accounting Records and Financial Statements,
Valuation Services and Recruitment Services.
c Agreeing the terms of Audit Engagements
1. Discuss the concept, importance and the contents of
Engagement Letter.
P1 T1
2. Discuss factors to be considered in the case of recurring
audits.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
3. Discuss Preconditions for an audit and Course of action in
the case when preconditions are not present.
d Quality Control Procedures
1. Explain the overall objectives and importance of quality
control procedures in conducting an audit.
2. Explain briefly the quality control procedures for acceptance P1 T1
and continuance of client relationship and engagement,
engagement performance and monitoring.
e Appointment, Removal and Qualification of Auditors

1. Discuss the requirements related to appointment, removal, P2 T2

fee, qualification and disqualification of auditors.
2. Discuss the objectives, rights and duties of external auditors P1 T1
in relation to the Financial Statement.
f Code of Ethics
1. Discuss fundamental principles and threats to P2 T2
Independence and Objectivity.
2. Discuss the circumstances that cause threats and explain the
safeguards to offset threats to compliance with the
fundamental principles and threats to independence and
objectivity.
3. Explain the matters to be considered by an audit firm in the
following circumstances:
 Client acceptance
 Engagement acceptance
B Planning and Risk Assessment
a Planning an Audit
1. Discuss the importance of planning an audit and the content
of an audit strategy and detailed audit plan.
2. Discuss preliminary engagement activities.
3. Discuss additional considerations in initial audit
P1 T1
engagements.
4. Discuss briefly the concept of interim and final audit and list
the audit procedures that can be performed by the external
auditor at the interim and final stage of an audit.
b Audit Documentation

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1. Discuss the importance of audit documentation including
custody, ownership, confidentiality and retention.
P1 T1
2. Discuss types of working papers (Permanent and current),
including automated and standardized working papers.

Syllabus Proficiency Testing

Learning Outcomes
Ref. Level Level
3. Discuss factors to be considered in determining the form
and content of audit documentation.
c Risk Identification and Assessment
1. Define audit risk and its components.
2. Explain audit risk from the given scenario and the auditor’s
response to the risk identified.
3. Explain why auditors obtain an understanding of the entity
and its environment.
4. Explain the matters about which the auditor will obtain an
P2 T2
understanding of the entity and its environment.
5. Explain how the auditor will obtain an understanding of the
entity and its environment.
6. Explain the purpose of risk assessment procedures at the
planning stage of an audit.
7. Discuss documentation.
d Materiality in Planning and Performing an Audit
1. Explain the concepts of materiality, qualitative materiality,
revision in materiality, performance materiality.
2. Explain how materiality is calculated. P2 T2
3. Explain the application of materiality on audit.
4. Discuss documentation of materiality.
e Fraud and Error
1. Define fraud and error and discuss their differences.
2. Discuss types of Fraud.
3. Discuss the responsibility of Management, those charged
with governance and external auditor with respect to fraud.
4. Discuss risk assessment procedures with respect to fraud by P2 T2
the External Auditor.
5. Discuss response to the assessed risk of material
misstatement due to fraud (at the financial statement level).
6. Identify fraud risk factors and circumstances that indicate
the possibility of fraud in simple scenarios.
C Audit Evidence and Internal Controls

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
a Audit Evidence
1. Define audit evidence and discuss methods to obtain audit
evidence.
2. Discuss the concept of Sufficient and appropriate audit
evidence. P1 T1
3. Explain types of audit procedures.
4. Define financial statement assertions.
Syllabus Learning Outcomes Proficiency Testing
Ref. Level Level

b External Confirmation

1. Define external confirmation, types, methods and

significance of external confirmation.
2. Discuss planning and design of External Confirmation.
3. Discuss the course of action in the case of reply from third
parties (both in the case of positive and negative P2 T2
confirmations).
4. Discuss the course of action if management refuses to allow
the auditor to send confirmation.
5. Discuss the concept of exception and procedures to be
performed in the case of an exception.
c Analytical Procedures

1. Explain analytical procedures and their various types. P2 T2

2. Discuss factors to be considered when using analytical
procedures as substantive procedures.
3. Discuss the importance of analytical procedures at the
planning stage and when forming an overall conclusion / at
the end of the audit.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
4. Interpret accounting ratios along with audit risk.

d Audit Sampling

1. Explain audit sampling and its purpose.

2. Explain the concept of 100% testing and selection
technique including factors to be considered in this regard.
3. Discuss methods of sampling (Statistical and non-
statistical).
4. Explain the concept of sampling risk and non-sampling risk.
5. Explain the concept of Stratification. P1 T1
6. Discuss the concept of misstatement and rate of deviation
including expected and tolerated.
7. State the audit procedures to be performed on the
selected sample.
8. Discuss the concept of projecting misstatement and
evaluating the results of audit sampling.
e Subsequent Events

1. Explain requirements related to subsequent events and the

auditor’s responses.
P2 T2
2. Describe the auditor’s responsibility in respect of the
following situations:
- Events occurring between the date of the financial
statements and the date of the auditor’s report.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
- Facts that become known to the auditor after the date of
the auditor’s report but before the date the financial
statements are issued.
- Facts that become known to the auditor after the financial
statements have been issued.
f Going Concern
1. Discuss the concept of going concern assumption.
2. Discuss the responsibility of management and external
auditors with respect to going concern.
3. Explain potential indicators that an entity is not a going
concern.
P2 T2
4. Discuss the procedures to be applied in performing going
concern reviews and additional procedures when events or
conditions are identified.
5. Explain the impact on the audit report in the case of going
concern.
g Written Representation
1. Explain written representation.
2. Discuss the course of action when there is a doubt as to the
reliability of written representation.
3. Discuss the course of action in the event when
management does not provide the requested written P2 T2
representation.
4. Explain the impact on the audit report in the case there is a
doubt about the reliability of written representation and
when such is not provided by the management.
h Substantive Procedures
1. Explain the audit procedures to verify:
- Profit and loss items (Sales, Purchases, payroll expense,
Bad debt expense)
- Balance Sheet Items (Cash in hand, Cash at Bank,
Tangible and Intangible Fixed Assets, Debtors, Trade
Payables, Inventory, Long term loan, Various types of P2 T2
provisions)
- litigation and claims
- segment information
2. Explain the audit procedures for relevant and specific
financial statement assertions.
i Internal Control and Test of Controls

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1. Explain internal control and its components. P2 T2
Syllabus Learning Outcomes Proficiency Testing
Ref.
Level Level
D Conclusions and Reporting
a External Audit Report
1. Discuss the concept of unmodified and modified opinions.
2. Discuss the contents of an audit report.
3. Discuss additional reporting responsibilities.
4. Discuss the format and content of key audit matters (KAM),
emphasis of matter paragraph (EOMP) and other matter
paragraph (OMP).
5. Discuss the relationship of KAM with other content of audit
report. P1 T2
6. Discuss circumstances where EOMP and OMP are/may be
necessary.
7. Discuss the relationship of EOMP and OMP with other
content of audit report.
8. Discuss the impact on the audit report via various types of P2 T2
opinions in scenario-based questions.
b Engagement to Review Financial Statements
1. Discuss the concept and scope of a review engagement.
2. Explain Difference b/w audit and review engagement. P1 T1
3. Discuss the procedures to be performed by the practitioner
in the case of a review engagement.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning

Comprehensive Test
Series by SC E-Learning

Schedule For CAF-8 Audit

Test # Topic
1 Chapter 1
2 Chapter 2
3 Chapter 3
4 Chapter 4
5 Chapter 5
6 Chapter 6
7 Chapter 7
8 Chapter 8
9 Chapter 9
10 Chapter 10
11 Chapter 11
12 Chapter 12
13 Chapter 13
14 Chapter 14 & 15
Final Mock Full Book

Key Features:

 Tests can be attempted in any sequence and on any time.

 Flexible Timing and Schedule
 Inform your assistant about Test # before 24 hours.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
 Suggested answers will be shared within 4 days.
 Discussion of Problems (Faced by students in Tests).

0331 4435703

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
3. Discuss factors to be considered in determining the form
and content of audit documentation.
c Risk Identification and Assessment
1. Define audit risk and its components.
2. Explain audit risk from the given scenario and the auditor’s
response to the risk identified.
3. Explain why auditors obtain an understanding of the entity
and its environment.
4. Explain the matters about which the auditor will obtain an
P2 T2
understanding of the entity and its environment.
5. Explain how the auditor will obtain an understanding of the
entity and its environment.
6. Explain the purpose of risk assessment procedures at the
planning stage of an audit.
7. Discuss documentation.
d Materiality in Planning and Performing an Audit
1. Explain the concepts of materiality, qualitative materiality,
revision in materiality, performance materiality.
2. Explain how materiality is calculated. P2 T2
3. Explain the application of materiality on audit.
4. Discuss documentation of materiality.
e Fraud and Error
1. Define fraud and error and discuss their differences.
2. Discuss types of Fraud.
3. Discuss the responsibility of Management, those charged
with governance and external auditor with respect to fraud.
4. Discuss risk assessment procedures with respect to fraud by P2 T2
the External Auditor.
5. Discuss response to the assessed risk of material
misstatement due to fraud (at the financial statement level).
6. Identify fraud risk factors and circumstances that indicate
the possibility of fraud in simple scenarios.
C Audit Evidence and Internal Controls
a Audit Evidence

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1. Define audit evidence and discuss methods to obtain audit
evidence.
2. Discuss the concept of Sufficient and appropriate audit
evidence. P1 T1
3. Explain types of audit procedures.
4. Define financial statement assertions.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
b External Confirmation
1. Define external confirmation, types, methods and
significance of external confirmation.
2. Discuss planning and design of External Confirmation.
3. Discuss the course of action in the case of reply from third
parties (both in the case of positive and negative
P2 T2
confirmations).
4. Discuss the course of action if management refuses to allow
the auditor to send confirmation.
5. Discuss the concept of exception and procedures to be
performed in the case of an exception.
c Analytical Procedures
1. Explain analytical procedures and their various types. P2 T2
2. Discuss factors to be considered when using analytical
procedures as substantive procedures.
3. Discuss the importance of analytical procedures at the
planning stage and when forming an overall conclusion / at
the end of the audit.
4. Interpret accounting ratios along with audit risk.
d Audit Sampling
1. Explain audit sampling and its purpose.
2. Explain the concept of 100% testing and selection technique
including factors to be considered in this regard.
3. Discuss methods of sampling (Statistical and non-
statistical).
4. Explain the concept of sampling risk and non-sampling risk.
5. Explain the concept of Stratification. P1 T1
6. Discuss the concept of misstatement and rate of deviation
including expected and tolerated.
7. State the audit procedures to be performed on the selected
sample.
8. Discuss the concept of projecting misstatement and
evaluating the results of audit sampling.
e Subsequent Events

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1. Explain requirements related to subsequent events and the
auditor’s responses.
2. Describe the auditor’s responsibility in respect of the
P2 T2
following situations:
- Events occurring between the date of the financial
statements and the date of the auditor’s report.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
- Facts that become known to the auditor after the date of
the auditor’s report but before the date the financial
statements are issued.
- Facts that become known to the auditor after the financial
statements have been issued.
f Going Concern
1. Discuss the concept of going concern assumption.
2. Discuss the responsibility of management and external
auditors with respect to going concern.
3. Explain potential indicators that an entity is not a going
concern.
P2 T2
4. Discuss the procedures to be applied in performing going
concern reviews and additional procedures when events or
conditions are identified.
5. Explain the impact on the audit report in the case of going
concern.
g Written Representation
1. Explain written representation.
2. Discuss the course of action when there is a doubt as to the
reliability of written representation.
3. Discuss the course of action in the event when
management does not provide the requested written P2 T2
representation.
4. Explain the impact on the audit report in the case there is a
doubt about the reliability of written representation and
when such is not provided by the management.
h Substantive Procedures
1. Explain the audit procedures to verify:
- Profit and loss items (Sales, Purchases, payroll expense,
Bad debt expense)
- Balance Sheet Items (Cash in hand, Cash at Bank,
Tangible and Intangible Fixed Assets, Debtors, Trade
Payables, Inventory, Long term loan, Various types of P2 T2
provisions)
- litigation and claims
- segment information
2. Explain the audit procedures for relevant and specific
financial statement assertions.
i Internal Control and Test of Controls

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1. Explain internal control and its components. P2 T2

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
2. Discuss the objectives and limitation of an accounting and
internal control system.
3. Discuss how the internal control system is documented
through various methods.
4. Discuss the concept of Walkthrough Test and the difference
between Walk through Test and Test of Controls.
5. Discuss internal controls of a small company/entity.
6. Explain the risk, controls and test of controls to be
performed on major transition cycles (Sales system,
purchase system, inventory system, bank and cash system,
payroll system and revenue and capital expenditure
system).
j Using the Work of Others
1. Discuss the concepts and functions of the internal audit
department.
2. Explain the difference b/w the external audit and internal
audit.
3. Explain how the work of internal auditors is evaluated and
direct assistance of internal auditors is used.
4. Explain areas where an auditor’s expert can be used by the
P2 T2
external auditor.
5. Explain factors to evaluate the competence, capability and
objectivity of the auditor’s expert.
6. Explain how the adequacy of the auditor’s expert’s work can
be evaluated.
7. Explain how reference to the Auditor’s expert is made in the
auditors’ report.
k Related Party
1. Describe the term related party using simple examples.
2. Discuss how related party transactions can give rise to the
risk of material misstatement using simple examples.
3. Describe the audit procedures including risk assessment P2 T2
procedures and related activities to obtain information
relevant to identifying the related party relationships and
transactions including responses to the assessed risk of
material misstatement.
l Computer Assisted Audit Techniques and General & Applicable
IT Controls

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
1 Explain the concept of Computer Assisted Audit
Techniques, Test Data and Audit Software and their
advantages and disadvantages. P2 T2

2 Describe general I.T controls and Application I.T controls.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
Syllabus Proficiency Testing
Learning Outcomes
Ref. Level Level
D Conclusions and Reporting
a External Audit Report
1. Discuss the concept of unmodified and modified opinions.
2. Discuss the contents of an audit report.
3. Discuss additional reporting responsibilities.
4. Discuss the format and content of key audit matters (KAM),
emphasis of matter paragraph (EOMP) and other matter
paragraph (OMP).
P1 T2
5. Discuss the relationship of KAM with other content of audit
report.
6. Discuss circumstances where EOMP and OMP are/may be
necessary.
7. Discuss the relationship of EOMP and OMP with other
content of audit report.
8. Discuss the impact on the audit report via various types of
P2 T2
opinions in scenario-based questions.
b Engagement to Review Financial Statements
1. Discuss the concept and scope of a review engagement.
2. Explain Difference b/w audit and review engagement.
P1 T1
3. Discuss the procedures to be performed by the practitioner
in the case of a review engagement.

Key Examinable Professional Skills

1 Evaluate data and information from a variety of sources and perspective through
research, integration and analysis.
2 Apply critical thinking skills to solve problems, inform judgements, make decisions and
reach well-reasoned conclusions.
3 Communicate clearly and concisely when presenting, discussing and reporting in
formal and informal situations.
4 Respond effectively to changing circumstances or new information to solve problems,
inform judgements, make decisions, and reach well-reasoned conclusions.

Key Examinable Professional Values, Ethics and Attitude

1 Apply an inquiring mind when collecting and assessing data and information

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
2 Apply critical thinking when identifying and evaluating alternatives to determine an
appropriate course of action.
3 Analyze the interrelationship of ethics and law, including the relationship between
laws, regulations and the public interest.

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
4 Identify threats to compliance with the fundamental principles of ethics.
5 Apply ethical principles of ethics when collecting, generating, storing, accessing, using
and sharing data and information.

Specific Examinable Knowledge Reference

1 ISA 200: Overall objectives of the Independent Auditor and the conduct of an audit in
accordance with International Standards on Auditing
2 ISA 210: Agreeing the terms of audit engagement
3 ISA 220: Quality Control for an audit of financial statements
4 ISA 230: Audit documentation
5 ISA 240: The auditor’s responsibilities relating to fraud in an audit of financial
statements(including appendix 1 and 3)
6 ISA 300: Planning an audit of financial statements
7 ISA 315(revised): identifying and assessing the risk of material misstatement through
understanding the entity and its environment
8 ISA 320: Materiality in planning and performing an audit
9 ISA 330: The auditor’s response to assessed risks
10 ISA 500: Audit evidence
11 ISA 501: Audit evidence-specific considerations for selected items
12 ISA 505: External confirmations
13 ISA 520: Analytical procedures
14 ISA 530: Audit Sampling
15 ISA 560: Subsequent Events
16 ISA 570: (Revised) Going Concern
17 ISA 580: Written representations
18 ISA 610(revised 2013): Using the work of internal auditors
19 ISA 620: Using the work of an auditor’s expert
20 ISA 700(revised): Forming an opinion and reporting on Financial statements
21 ISA 701: Communicating Key audit matters in the Independent auditor’s report
22 ISA 705 (revised): modifications to the opinion in the independent auditor’s report

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw
 SC E-Learning
23 ISA 706 (revised): emphasis of matter paragraphs and other matter paragraphs in the
independent auditor’s report
24 ISRE 2400: Engagements to review historical financial statements
25 Companies Act 2017 (Sections 246 to 251)
26 ICAP Code of Ethics for Chartered Accountants revised 2019 (Sections 100-120, 320 and
330)

0331 4435703
https://www.youtube.com/channel/UCWaV1XbNFaY-WqjsZzymEvw