Audit and Assurance (UK) Detailed syllabus

(F8) This shows the breakdown of the main capabilities

(sections) of the syllabus into subject areas. This is
the blueprint for the detailed study guide.
This syllabus and study guide is designed to help
with planning study and to provide detailed
Approach to examining the syllabus
information on what could be assessed in
any examination session.
This section briefly explains the structure of the
examination and how it is assessed.
THE STRUCTURE OF THE SYLLABUS AND
STUDY GUIDE
Study Guide
Relational diagram of paper with other papers
This is the main document that students, tuition
providers and publishers should use as the basis of
This diagram shows direct and indirect links
their studies, instruction and materials.
between this paper and other papers preceding or
Examinations will be based on the detail of the
following it. Some papers are directly underpinned
study guide which comprehensively identifies what
by other papers such as Advanced Performance
could be assessed in any examination session.
Management by Performance Management. These
The study guide is a precise reflection and
links are shown as solid line arrows. Other papers
breakdown of the syllabus. It is divided into sections
only have indirect relationships with each other
based on the main capabilities identified in the
such as links existing between the accounting and
syllabus. These sections are divided into subject
auditing papers. The links between these are shown
areas which relate to the sub-capabilities included
as dotted line arrows. This diagram indicates where
in the detailed syllabus. Subject areas are broken
you are expected to have underpinning knowledge
down into sub-headings which describe the detailed
and where it would be useful to review previous
outcomes that could be assessed in examinations.
learning before undertaking study.
These outcomes are described using verbs
indicating what exams may require students to
Overall aim of the syllabus
demonstrate, and the broad intellectual level at
which these may need to be demonstrated
This explains briefly the overall objective of the
(*see intellectual levels below).
paper and indicates in the broadest sense the
capabilities to be developed within the paper.
Reading lists
Main capabilities
ACCA has two approved publishers: BPP
Professional Education and Kaplan Publishing
This paper’s aim is broken down into several main
Foulks Lynch. Both these publishers base their
capabilities which divide the syllabus and study
study texts on the detailed contents of the study
guide into discrete sections.
guides as published by ACCA. ACCA takes no
editorial responsibility for the detailed content of
Relational diagram of the main capabilities
these study texts although ACCA examiners will
annually review their content for general
This diagram illustrates the flows and links between
appropriateness and relevance in supporting
the main capabilities (sections) of the syllabus and
effective study towards ACCA examinations.
should be used as an aid to planning teaching and
In addition ACCA examiners will recommend other
learning in a structured way.
text books where appropriate, which students may
read in order to widen their reading beyond the
Syllabus rationale
approved study texts. Relevant articles will also be
published in student accountant.
This is a narrative explaining how the syllabus is
structured and how the main capabilities are linked.
The rationale also explains in further detail what the
examination intends to assess and why.

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 INTELLECTUAL LEVELS GUIDE TO EXAM STRUCTURE

The syllabus is designed to progressively broaden The structure of examinations varies within and
and deepen the knowledge, skills and professional between modules and levels.
values demonstrated by the student on their way
through the qualification. The Fundamentals level examinations contain
100% compulsory questions to encourage
The specific capabilities within the detailed candidates to study across the breadth of each
syllabuses and study guides are assessed at one of syllabus.
three intellectual or cognitive levels:
The Knowledge module is assessed by equivalent
Level 1: Knowledge and comprehension two-hour paper based and computer based
Level 2: Application and analysis examinations.
Level 3: Synthesis and evaluation
The Skills module examinations are all paper based
Very broadly, these intellectual levels relate to the three-hour papers. The structure of papers varies
three cognitive levels at which the Knowledge from ten questions in the Corporate and Business
module, the Skills module and the Professional level Law (F4) paper to four 25 mark questions in
are assessed. Performance Management (F5) and Financial
Management (F9). Individual questions within all
Each subject area in the detailed study guide Skills module papers will attract between 10 and
included in this document is given a 1, 2, or 30 marks.
3 superscript, denoting intellectual level, marked at
the end of each relevant line. This gives an The Professional level papers are all three-hour
indication of the intellectual depth at which an area paper based examinations, all containing two
could be assessed within the examination. However, sections. Section A is compulsory, but there will be
while level 1 broadly equates with the Knowledge some choice offered in Section B.
module, level 2 equates to the Skills module and
level 3 to the Professional level, some lower level For all three hour examination papers, ACCA has
skills can continue to be assessed as the student introduced 15 minutes reading and planning time.
progresses through each module and level. This
reflects that at each stage of study there will be a This additional time is allowed at the beginning of
requirement to broaden, as well as deepen each three-hour examination to allow candidates to
capabilities. It is also possible that occasionally read the questions and to begin planning their
some higher level capabilities may be assessed at answers before they start writing in their answer
lower levels. books. This time should be used to ensure that all
the information and exam requirements are properly
LEARNING HOURS read and understood.

The ACCA qualification does not prescribe or During reading and planning time candidates may
recommend any particular number of learning hours only annotate their question paper. They may not
for examinations because study and learning write anything in their answer booklets until told to
patterns and styles vary greatly between people and do so by the invigilator.
organisations. This also recognises the wide
diversity of personal, professional and educational The Essentials module papers all have a Section A
circumstances in which ACCA students find containing a major case study question with all
themselves. requirements totalling 50 marks relating to this
case. Section B gives students a choice of two from
Each syllabus contains between 23 and 35 main three 25 mark questions.
subject area headings depending on the nature of
the subject and how these areas have been broken Section A of each of the Options papers contains
down. 50-70 compulsory marks from two questions, each
attracting between 25 and 40 marks. Section B will

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offer a choice of two from three questions totalling
30-50 marks, with each question attracting
between 15 and 25 marks

GUIDE TO EXAMINATION ASSESSMENT

ACCA reserves the right to examine anything

contained within the study guide at any examination
session. This includes knowledge, techniques,
principles, theories, and concepts as specified.

For the financial accounting, audit and assurance,

law and tax papers, ACCA will publish examinable
documents every six months to indicate exactly
what regulations and legislation could potentially be
assessed at the following examination session.
Knowledge of new examinable regulations will not
be assessed until at least six calendar months after
the last day of the month in which documents are
issued or legislation is passed. The relevant cut-off
date for the June examinations is 30 November of
the previous year, and for the December
examinations, it is 31 May of the same year.

The study guide offers more detailed guidance on

the depth and level at which the examinable
documents will be examined. The study guide
should therefore be read in conjunction with the
examinable documents list.

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 Syllabus B Explain the nature of internal audit and
describing its role as part of overall
performance management and its relationship
PA AAA
with the external audit
(P1) (P7)
C Demonstrate how the auditor obtains an
understanding of the entity and its
CL (F4) FR (F7) AA environment, assesses the risk of material
(F8) misstatement (whether arising from fraud or
other irregularities) and plans an audit of
financial statements

AIM D Describe and evaluate information systems

and internal controls to identify and
To develop knowledge and understanding of the communicate control risks and their potential
process of carrying out the assurance engagement, consequences, making appropriate
and its application in the context of the professional recommendations
regulatory framework.
E Identify and describe the work and evidence
MAIN CAPABILITIES required to meet the objectives of audit
engagements and the application of the
On successful completion of this paper, candidates International Standards on Auditing (UK and
should be able to: Ireland)

A Explain the nature, purpose and scope of F Evaluate findings and modify the audit plan
assurance engagements including the role of as necessary
the external audit and its regulatory and ethical
framework G Explain how the conclusions from audit work
are reflected in different types of audit report,
explaining the elements of each type of report.

RELATIONAL DIAGRAM OF MAIN CAPABILITIES

Audit framework and regulation (A) Internal audit (B)

Planning and risk assessment (C)

Internal control (D) Audit evidence (E)

Review (F)

Reporting (G)

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RATIONALE 3. Assessing the risks of material misstatement
and fraud
The syllabus for Paper F8, Audit and Assurance, is
divided into seven areas. The syllabus starts with 4. Analytical procedures
the nature, purpose and scope of assurance
engagements, including the statutory audit, its 5. Planning an audit
regulatory environment, and introduces professional
ethics relating to audit and assurance. It then leads 6. Audit documentation
into internal audit, including the scope of internal
audit as well as the differences between internal 7. The work of others
audit and external audit. The syllabus then covers a
range of areas relating to an audit of financial D Internal control
statements. These include planning and risk
assessment, evaluating internal controls, audit 1. Internal control systems
evidence, and a review of the financial statements.
The final section then deals with reporting, including 2. The use of internal control systems by auditors
statutory audit reports, management reports, and
internal audit reports. 3. Transaction cycles

DETAILED SYLLABUS 4. Tests of control

A Audit Framework and Regulation 5. The evaluation of internal control components

1. The concept of audit and other assurance 6. Communication on internal control

engagements
E Audit evidence
2. Statutory audits
1. The use of assertions by auditors
3. The regulatory environment and corporate
governance 2. Audit procedures

4. APB ethical standards and ACCA’s Code of 3. The audit of specific items
Ethics and Conduct
4. Audit sampling and other means of testing
B Internal audit
5. Computer-assisted audit techniques
1. Internal audit and corporate governance
6. Not-for-profit organisations
2. Differences between external and internal audit
F Review
3. The scope of the internal audit function
1. Subsequent events
4. Outsourcing the internal audit department
2. Going concern
5. Internal audit assignments
3. Management representations
C Planning and risk assessment
4. Audit finalisation and the final review
1. Objective and general principles

2. Understanding the entity and knowledge of the

business

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 G Reporting

1. Audit reports

2. Reports to management

3. Internal audit reports

APPROACH TO EXAMINING THE SYLLABUS

The syllabus is assessed by a three-hour paper-

based examination, consisting of five compulsory
questions. The bulk of the questions will be
discursive but some questions involving
computational elements will be set from time to
time.

The questions will cover all areas of the syllabus.

Question 1 will be a scenario-based question worth

30 marks. Question 2 will be a knowledge-based
question worth 10 marks. Questions 3, 4 and 5 will
be worth 20 marks each.

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Study Guide b) Explain the relationship between International
Standards on Auditing and the work of the
Auditing Practices Board.[1]
A AUDIT FRAMEWORK AND REGULATION
c) Discuss the objective, relevance and
1. The concept of audit and other assurance importance of corporate governance.[2]
engagements
d) Discuss the need for auditors to communicate
a) Identify and describe the objective and general with those charged with governance.[2]
principles of external audit engagements.[2]
e) Discuss the provisions of international codes of
b) Explain the nature and development of audit corporate governance (such as the Combined
and other assurance engagements.[1] Code on Corporate Governance) that are most
relevant to auditors.[2]
c) Discuss the concepts of accountability,
stewardship and agency.[2] f) Describe good corporate governance
requirements relating to directors’
d) Discuss the concepts of materiality, true and responsibilities (e.g. for risk management and
fair presentation and reasonable assurance.[2] internal control) and the reporting
responsibilities of auditors.[1]
e) Explain reporting as a means of communication
to different stakeholders.[1] g) Analyse the structure and roles of audit
committees and discuss their drawbacks and
f) Explain the level of assurance provided by limitations.[2]
audit and other review assignments.[1]
h) Explain the importance of internal control and
2. Statutory audits risk management.[1]

a) Describe the regulatory environment within i) Compare the responsibilities of management

which statutory audits take place.[1] and auditors for the design and operation of
systems and controls.[2]
b) Discuss the reasons and mechanisms for the
regulation of auditors.[2] 4. APB ethical standards and ACCA’s Code of
Ethics and Conduct
c) Explain the statutory regulations governing the
appointment, removal and resignation of a) Define and apply the fundamental principles of
auditors.[1] professional ethics of integrity, objectivity,
professional competence and due care,
d) Discuss the types of opinion provided in confidentiality and professional behaviour.[2]
statutory audits.[2]
b) Define and apply the conceptual framework.[2]
e) State the objectives and principle activities of
statutory audit and assess its value (e.g. in c) Discuss the sources of, and enforcement
assisting management to reduce risk and mechanisms associated with, ACCA’s Code of
improve performance).[1] Ethics and Conduct.[2]

f) Describe the limitations of statutory audits.[1] d) Discuss the requirements of professional ethics
and other requirements in relation to the
3. The regulatory environment and corporate acceptance of new audit engagements.[2]
governance
e) Discuss the process by which an auditor
a) Explain the development and status of obtains an audit engagement.[2]
International Standards on Auditing (UK and
Ireland).[1]

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 f) Explain the importance of engagement letters C PLANNING AND RISK ASSESSMENT
and state their contents.[1]
1 Objective and general principles
B INTERNAL AUDIT
a) Identify and describe the need to plan and
1 Internal audit and corporate governance perform audits with an attitude of professional
scepticism.[2]
a) Discuss the factors to be taken into account
when assessing the need for internal audit.[2] b) Identify and describe engagement risks
affecting the audit of an entity.[1]
b) Discuss the elements of best practice in the
structure and operations of internal audit with c) Explain the components of audit risk.[1]
reference to the Combined Code on Corporate
Governance. [2] d) Compare and contrast risk based, procedural
and other approaches to audit work.[2]
2 Differences between external and internal
[2]
audit e) Discuss the importance of risk analysis.

a) Compare and contrast the role of external and f) Describe the use of information technology in
internal audit regarding audit planning and the risk analysis.[1]
collection of audit evidence.[2]
2 Understanding the entity and knowledge of
b) Compare and contrast the types of report the business
provided by internal and external audit.[2]
a) Explain how auditors obtain an initial
3 The scope of the internal audit function understanding of the entity and knowledge of
its business environment.[2]
a) Discuss the scope of internal audit and the
limitations of the internal audit function.[2] 3 Assessing the risks of material misstatement
and fraud
b) Explain the types of audit report provided in
internal audit assignments.[1] a) Define and explain the concepts of materiality
and tolerable error.[2]
c) Discuss the responsibilities of internal and
external auditors for the prevention and b) Compute indicative materiality levels from
detection of fraud and error.[2] financial information.[2]

4 Outsourcing the internal audit department 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 internal audit.[1]
4 Analytical procedures
5 Internal audit assignments
a) Describe and explain the nature and purpose of
a) Discuss the nature and purpose of internal analytical procedures in planning.[2]
audit assignments including value for money,
IT, best value and financial.[2] b) Compute and interpret key ratios used in
analytical procedures.[2]
b) Discuss the nature and purpose of operational
internal audit assignments including 5 Planning an audit
procurement, marketing, treasury and human
resources management.[2] a) Identify and explain the need for planning an
audit.[2]

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b) Identify and describe the contents of the overall 1 Internal control systems
audit strategy and audit plan.[2]
a) Explain why an auditor needs to obtain an
c) Explain and describe the relationship between understanding of internal control activities
the overall audit strategy and the audit plan.[2] relevant to the audit.[1]

d) Develop and document an audit plan.[2] b) Describe and explain the key components of an
internal control system.[1]
e) Explain the difference between interim and
final audit.[1] c) Identify and describe the important elements of
internal control including the control
6 Audit documentation environment and management control
activities. [1]
a) Explain the need for and the importance of
audit documentation. [1] d) Discuss the difference between tests of control
and substantive procedures. [2]
b) Describe and prepare working papers and
supporting documentation.[2] 2 The use of internal control systems by
auditors
c) Explain the procedures to ensure safe custody
and retention of working papers.[1] a) Explain the importance of internal control to
auditors.[1]
7 The work of others
b) Explain how auditors identify weaknesses in
a) Discuss the extent to which auditors are able to internal control systems and how those
rely on the work of experts.[2] weaknesses limit the extent of auditors’
reliance on those systems.[2]
b) Discuss the extent to which external auditors
are able to rely on the work of internal audit.[2] 3 Transaction cycles

c) Discuss the audit considerations relating to a) Explain, analyse and provide examples of
entities using service organisations.[2] internal control procedures and control
activities.[2]
d) Discuss why auditors rely on the work of
others.[2] b) Provide examples of computer system
controls.[2]
e) Explain the extent to which reference to the
work of others can be made in audit reports.[1] 4 Tests of control

D INTERNAL CONTROL a) Explain and tabulate tests of control suitable

for inclusion in audit working papers.[2]
The following transaction cycles and account
balances are relevant to this capability: b) List examples of application controls and
• sales, general IT controls.[2]
• purchases,
• stock, 5 The evaluation of internal control components
• revenue and capital expenditure,
• payroll, a) Analyse the limitations of internal control
• bank and cash. components in the context of fraud and error.[2]

b) Explain the need to modify the audit strategy

and audit plan following the results of tests of
control.[1]

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 c) Identify and explain management’s risk • tabulate those substantive procedures in a
assessment process with reference to internal work program.
control components.[1]
a) Debtors: [2]
6 Communication on internal control i) direct confirmation of debtors
ii) other evidence in relation to debtors and
a) Discuss and provide examples of how the prepayments, and
reporting of internal control weaknesses and iii) the related profit and loss account entries.
recommendations to overcome those
weaknesses are provided to management.[2] b) Stock: [2]
i) stock counting procedures in relation to
E AUDIT EVIDENCE year-end and continuous stock systems
ii) cut-off
1 The use of assertions by auditors iii) auditor’s attendance at stock counting
iv) direct confirmation of stock held by third
a) Explain the assertions contained in the parties,
financial statements.[2] v) other evidence in relation to stock.

b) Explain the principles and objectives of c) Creditors and accruals: [2]

transaction testing, account balance testing i) supplier statement reconciliations and
and disclosure testing.[1] direct confirmation of creditors,
ii) obtain evidence in relation to creditors
c) Explain the use of assertions in obtaining audit and accruals, and
evidence.[2] iii) the related profit and loss account entries.

2 Audit procedures d) Bank and cash:[2]

i) bank confirmation reports used in
a) Discuss the sources and relative merits of the obtaining evidence in relation to bank and
different types of evidence available.[2] cash
ii) other evidence in relation to bank and
b) Discuss and provide examples of how cash, and
analytical procedures are used as substantive iii) the related profit and loss account entries.
procedures.[2]
e) Fixed assets and long-term liabilities:[2]
c) Discuss the problems associated with the audit i) evidence in relation to fixed assets and
and review of accounting estimates.[2] ii) long term liabilities and
iii) the related profit and loss account entries.
d) Describe why smaller entities may have
different control environments and describe the 4 Audit sampling and other means of testing
types of evidence likely to be available in
smaller entities.[1] a) Define audit sampling and explain the need for
sampling.[1]
e) Discuss the quality of evidence obtained.[2]
b) Identify and discuss the differences between
3 The audit of specific items statistical and non-statistical sampling.[2]

For each of the account balances stated in this sub- c) Discuss and provide relevant examples of, the
capability: application of the basic principles of statistical
• explain the purpose of substantive sampling and other selective testing
procedures in relation to financial procedures. [2]
statement assertions,
• explain the substantive procedures used in
auditing each balance, and

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d) Discuss the results of statistical sampling, e) Discuss the disclosure requirements in relation
including consideration of whether additional to going concern issues.[2]
testing is required.[2]
f) Discuss the reporting implications of the
5 Computer-assisted audit techniques findings of going concern reviews.[2]

a) Explain the use of computer-assisted audit 3 Management representations

techniques in the context of an audit.[1]
a) Explain the purpose of and procedure for
b) Discuss and provide relevant examples of the obtaining management representations.[2]
use of test data and audit software for the
transaction cycles and balances mentioned in b) Discuss the quality and reliability of
sub-capability 3.[2] management representations as audit
evidence.[2]
c) Discuss the use of computers in relation to the
administration of the audit.[2] c) Discuss the circumstances where management
representations are necessary and the matters
6 Not-for-profit organisations on which representations are commonly
obtained.[2]
a) Apply audit techniques to small not-for-profit
organisations.[2] 4 Audit finalisation and the final review

b) Explain how the audit of small not-for-profit a) Discuss the importance of the overall review of
organisations differs from the audit of for-profit evidence obtained.[2]
organisations.[1]
b) Explain the significance of unadjusted
F REVIEW differences.[1]

1 Subsequent events G REPORTING

a) Explain the purpose of a subsequent events 1 Audit reports

review.[1]
a) Describe and analyse the format and content of
b) Discuss the procedures to be undertaken in unmodified audit reports.[2]
performing a subsequent events review.[2]
b) Describe and analyse the format and content of
2 Going concern modified audit reports.[2]

a) Define and discuss the significance of the 2 Reports to management

concept of going concern.[2]
a) Identify and analyse internal control and
b) Explain the importance of and the need for system weaknesses and their potential effects
going concern reviews.[2] and make appropriate recommendations to
management.[2]
c) Explain the respective responsibilities of
auditors and management regarding going 3 Internal audit reports
concern.[1]
a) Describe and explain the format and content of
d) Discuss the procedures to be applied in internal audit review reports and other reports
performing going concern reviews.[2] dealing with the enhancement of
performance.[1]

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 b) Explain the process for producing an internal
audit report.[1]

READING LIST

ACCA’s approved publishers:

BPP Professional Education

Contact number: +44(0)20 8740 2222
Website: www.bpp.com/acca

Kaplan Publishing Foulks Lynch

Contact number: +44(0)118 989 0629
Website: www.kaplanfoulkslynch.com

Additional reading:

Accountancy Tuition Centre (ATC) International

Contact number: +44(0)141 880 6469
Website: www.atc-global.com

Cosserat, G.W. (2004). Modern Auditing, (Second

edition), John Wiley and Sons Ltd.

student accountant
http://www.frc.org.uk/apb

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