F8 Syllabus 2011
F8 Syllabus 2011
F8 Syllabus 2011
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A Explain the nature, purpose and scope of
assurance engagements including the role of
Review (F)
Reporting (G)
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RATIONALE 3. Understanding the entity and its environment
The Audit and Assurance syllabus is essentially 4. Materiality, fraud, laws and regulations
divided into seven areas. The syllabus starts with
the nature, purpose and scope of assurance 5. Analytical procedures
engagements, including the statutory audit, its
regulatory environment, and introduces professional 6. Planning an audit
ethics relating to audit and assurance. It then leads
into internal audit, including the scope of internal 7. Audit documentation
audit as well as the differences between internal
audit and external audit. The syllabus then covers a D. Internal control
range of areas relating to an audit of financial
statements. These include planning and risk 1. Internal control systems
assessment, evaluating internal controls, audit
evidence, and a review of the financial statements. 2. The use of internal control systems by auditors
The final section then deals with reporting, including
statutory audit reports, management reports, and 3. Transaction cycles
internal audit reports.
4. Tests of control
DETAILED SYLLABUS
5. The evaluation of internal control components
A. Audit framework and regulation
6. Communication on internal control
1. The concept of audit and other assurance
engagements E. Audit evidence
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2. Reports to management
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Study Guide 3. The regulatory environment and corporate
governance
g) Explain the five elements of an assurance g) Analyse the structure and roles of audit
engagement.[2] committees and discuss their benefits and
limitations.[2]
h) Explain the level of assurance provided by
audit and other review engagements.[1] h) Explain the importance of internal control and
. risk management.[1]
2. Statutory audits
i) Compare the responsibilities of management
a) Describe the regulatory environment within and auditors for the design and operation of
which statutory audits take place.[1] systems and controls.[2]
b) Discuss the reasons and mechanisms for the 4. Professional ethics and ACCA’s Code of Ethics
regulation of auditors.[2] and Conduct
c) Explain the statutory regulations governing the a) Define and apply the fundamental principles of
appointment, rights, removal and resignation of professional ethics of integrity, objectivity,
auditors.[1] professional competence and due care,
confidentiality and professional behaviour.[2]
d) State the objectives and principle activities of
statutory audit and assess its value (e.g. in b) Define and apply the conceptual framework,
assisting management to reduce risk and including the threats to the fundamental
improve performance).[1] principles of self-interest, self-review,
advocacy, familiarity, and intimidation.[2]
e) Describe the limitations of statutory audits.[1]
c) Discuss the safeguards to offset the threats to
the fundamental principles.[2]
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d) Describe the auditor’s responsibility with regard C PLANNING AND RISK ASSESSMENT
to auditor independence, conflicts of interest
and confidentiality.[1] 1. Objective and general principles
e) Discuss the preconditions, requirements of a) Identify the overall objectives of the auditor.[2]
professional ethics, and other requirements in
relation to the acceptance of new audit b) Identify and describe the need to plan and
engagements.[2] perform audits with an attitude of professional
scepticism, and to exercise professional
f) Discuss the process by which an auditor judgment.[2]
obtains an audit engagement.[2]
c) Explain the need to conduct an audit in
g) Explain the importance of engagement letters accordance with ISAs.[1]
and state their contents.[1]
2. Assessing the risks of material misstatement
B INTERNAL AUDIT
a) Explain the components of audit risk.[1]
1. Internal audit and corporate governance
b) Explain the risks of material misstatement in
a) Discuss the factors to be taken into account the financial statements.[2]
when assessing the need for internal audit.[2]
3. Understanding the entity and its environment
b) Discuss the elements of best practice in the
structure and operations of internal audit with a) Explain how auditors obtain an initial
reference to appropriate international codes of understanding of the entity and its
corporate governance.[2] environment.[2]
2. Differences between the external auditor and b) Describe risk assessment procedures for the
the internal audit function identification and assessment of the risks of
material misstatement.[2]
a) Compare and contrast the role of external and
internal audit regarding audit planning and the 4. Materiality, fraud, laws and regulations
collection of audit evidence.[2]
a) Define and explain the concepts of materiality
3. The scope of the internal audit function and performance materiality.[2]
a) Discuss the scope of internal audit and the b) Explain and calculate materiality levels from
limitations of the internal audit function.[2] financial information.[2]
4. Outsourcing the internal audit function c) Discuss the effect of fraud and misstatements
on the audit strategy and extent of audit
a) Explain the advantages and disadvantages of work.[2]
outsourcing the internal audit function.[1]
d) Discuss the responsibilities of internal and
5. Internal audit assignments external auditors for the prevention and
detection of fraud and error.[2]
a) Discuss the nature and purpose of internal
audit assignments including value for money, e) Explain the auditor’s responsibility to consider
IT, best value and financial.[2] laws and regulations.[2)
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5. Analytical procedures process, the information system, including the
related business processes, relevant to financial
a) Describe and explain the nature, and purpose reporting, and communication, control
of, analytical procedures in planning.[2] activities relevant to the audit, and monitoring
of controls.[2]
b) Compute and interpret key ratios used in
analytical procedures.[2] c) Discuss the difference between tests of control
and substantive procedures. [2]
6. Planning an audit
2. The use of internal control systems by
a) Identify and explain the need for planning an auditors
audit.[2]
a) Explain how auditors record internal control
b) Identify and describe the contents of the overall systems including the use of internal control
audit strategy and audit plan.[2] questionnaires and internal control evaluation
questionnaires. [2]
c) Explain and describe the relationship between
the overall audit strategy and the audit plan.[2] b) Explain how auditors identify deficiencies and
significant deficiencies in internal control
d) Explain the difference between interim and systems and how those significant deficiencies
final audit.[1] limit the extent of auditors’ reliance on those
systems.[2]
7. Audit documentation
3. Transaction cycles
a) Explain the need for and the importance of
audit documentation. [1] a) Explain, analyse and provide examples of
internal control procedures and control
b) Describe the contents of working papers and activities.[2]
supporting documentation.[2]
b) Provide examples of computer system
c) Explain the procedures to ensure safe custody controls.[2]
and retention of working papers.[1]
4. Tests of control
D INTERNAL CONTROL
a) Explain and tabulate tests of control suitable
The following transaction cycles and account for inclusion in audit working papers.[2]
balances are relevant to this capability:
• revenue, b) List examples of application controls and
• purchases, general IT controls.[2]
• inventory,
• revenue and capital expenditure, 5. The evaluation of internal control components
• payroll,
• bank and cash. a) Analyse the limitations of internal control
components in the context of fraud and error.[2]
1. Internal control systems
b) Explain the need to modify the audit strategy
a) Explain why an auditor needs to obtain an and audit plan following the results of tests of
understanding of internal control relevant to control.[1]
the audit.[1]
c) Identify and explain management’s risk
b) Describe and explain the five components of an assessment process with reference to internal
internal control system of the control control components.[1]
environment, the entity’s risk assessment
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6. Communication on internal control • explain the substantive procedures used in
auditing each balance.
a) Discuss and provide examples of how the
reporting of internal control significant a) Receivables: [2]
deficiencies and recommendations to overcome i) direct confirmation of accounts receivable
those significant deficiencies are provided to ii) other evidence in relation to receivables
management.[2] and prepayments, and
iii) the related income statement entries.
E AUDIT EVIDENCE
b) Inventory: [2]
1. The use of assertions by auditors i) inventory counting procedures in relation
to year-end and continuous inventory
a) Explain the assertions contained in the systems
financial statements.[2] ii) cut-off
iii) auditor’s attendance at inventory counting
b) Explain the assertions in relation to classes of iv) direct confirmation of inventory held by
transactions, account balances, and third parties,
presentation and disclosures.[1] v) other evidence in relation to inventory.
c) Explain the use of assertions in obtaining audit c) Payables, accruals, provisions and
evidence.[2] contingencies: [2]
i) supplier statement reconciliations and
2. Audit procedures direct confirmation of accounts payable,
ii) obtain evidence in relation to payables
a) Discuss the quality and quantity of audit and accruals, and
evidence.[2] iii) the related income statement entries.
b) Discuss the relevance and reliability of audit d) Bank and cash: [2]
evidence.[2] i) bank confirmation reports used in
obtaining evidence in relation to bank and
c) Discuss and provide examples of how cash
analytical procedures are used as substantive ii) other evidence in relation to bank and
procedures.[2] cash, and
iii) the related income statement entries.
d) Discuss the problems associated with the audit
and review of accounting estimates.[2] e) Tangible non-current assets and non-current
liabilities: [2]
e) Describe why smaller entities may have i) evidence in relation to non-current assets
different control environments and describe the and
types of evidence likely to be available in ii) non-current liabilities and
smaller entities.[1] iii) the related income statement entries.
f) Explain the auditor’s responsibilities and f) Share capital, reserves and directors’
describe procedures to be applied in relation to emoluments: [2]
opening balances and comparative i) evidence in relation to share capital,
information.[2] reserves and directors’ emoluments, and
ii) the related income statement entries.
3. The audit of specific items
4. Audit sampling and other means of testing
For each of the account balances stated in this sub-
capability: a) Define audit sampling and explain the need for
• explain the purpose of substantive sampling.[1]
procedures in relation to assertions,
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b) Identify and discuss the differences between F REVIEW
statistical and non-statistical sampling.[2]
1. Subsequent events
c) Discuss and provide relevant examples of, the
application of the basic principles of statistical a) Explain the purpose of a subsequent events
sampling and other selective testing review.[1]
procedures. [2]
b) Discuss the procedures to be undertaken in
d) Discuss the results of statistical sampling, performing a subsequent events review.[2]
including consideration of whether additional
testing is required.[2] 2. Going concern
d) Discuss why auditors rely on the work of a) Explain the purpose of and procedure for
others.[2] obtaining written representations.[2]
e) Explain the extent to which reference to the b) Discuss the quality and reliability of written
work of others can be made in audit reports.[1] representations as audit evidence.[2]
b) Explain how the audit of not-for-profit 4. Audit finalisation and the final review
organisations differs from the audit of for-profit
organisations.[1] a) Discuss the importance of the overall review of
evidence obtained.[2]
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c) Evaluate the effect of dealing with uncorrected READING LIST
misstatements.[2] This section only contains examiner suggested
reading which is in addition to the study texts
G REPORTING and/or revision materials and/or other reading listed
within the learning content provider directory.
1. Audit reports
Additional examiner suggested reading:
a) Describe and analyse the format and content of
unmodified audit reports.[2] Please note, the following text is only relevant for
students studying in Singapore
b) Describe and analyse the format and content of
modified audit reports.[2] AUDIT COMMITTEE GUIDANCE COMMITTEE
GUIDEBOOK FOR AUDIT COMMITTEES IN
2. Reports to management SINGAPORE
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SUMMARY OF CHANGES TO F8 Changes have been made to F8 (INT) to provide
clarification regarding items which were listed in the
RATIONALE FOR CHANGES TO STUDY GUIDE examinable documents, but not specifically referred
PAPER F8 to in the study guide. These were therefore
intrinsically always within the syllabus and are not
ACCA periodically reviews its qualification additions as such.
syllabuses so that they fully meet the needs of
stakeholders such as employers, students, The deletions are areas which will not be examined
regulatory and advisory bodies and learning by the new examiner.
providers. As a result of the latest review, ACCA is
making changes to the ACCA Qualification effective The main areas to be added or deleted from the
from June 2011. With each syllabus is included a syllabus from that date are shown in Table 1 below:
specific rationale for these changes as far as each
examination syllabus and study guide is concerned.
Table 1 – Additions to F8
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The areas to be removed from the syllabus are
shown in Table 2 below:
Table 2 – Deletions to F8
A Audit framework and regulation 2d) Types of opinion provided in statutory audits
B Internal Audit 2b) Compare and contrast internal and external audit
reports
C Planning and risk assessment 1b) Engagement risks affecting the audit
C 1d) Compare and contrast risk based, procedural and
other approaches to audit work
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