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Mnemonics and Charts ACCA Paper F8: Audit and Assurance (International)
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Tony Surridge Online Limited, 2013


ACCA Paper F8: AUDIT AND ASSURANCE
Mnemonics and Charts

Published by Tony Surridge Online Limited in 2013

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ACCA Paper F8 Audit and Assurance Mnemonics and Charts

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Pages 774
Charts and text 226
Mnemonics 179
Specimen examples of audit working papers 37
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Main page
ISBN and Copyright statement
For the ladies only
Why study from a computer screen?
Memorising: Tips and techniques
Writing or saying things over and over again .
Vocalising
Initial letters and making phrases
The use of mnemonics
The use of jingles
Word association
Visualising
Link/story technique
Do I need to memorise all your mnemonics?
Disguise your use of mnemonics in the exam
Charts
Colour codes
Electronic links within the database

Syllabus Study Guide
The structure of the syllabus
Intellectual levels A Audit framework and regulation
Learning hours B Internal audit
Guide to exam structure C Planning and risk assessment
Guide to examination assessment D Internal control
Aim E Audit evidence
Main capabilities F Review
Relational diagram of main capabilities G Reporting
Rationale
Detailed syllabus
Approach to examining the syllabus

Contents
An overview of what is involved in Paper F8
Overview of the structure of e-book
Contents: Mnemonics and charts

Contents Mnemonics and Charts
Appendix A International Standards on Auditing
Appendix B Extracts of UK Company Act, 2006
Appendix C Specimen Audit Working Papers
Appendix D Glossary of Terms

ACCA Paper F8
AUDIT AND ASSURANCE
Mnemonics and Charts

Where shall I begin, please your majesty? he asked. Begin at the
beginning, the king said gravely, and go on till you come to the end:
then stop.
Lewis Carroll
Through the Looking-Glass
You have two choices:

1. Either scroll through the book - screen
by screen (like in a manual book), or
2. Hyperlink directly to the screen you
want.
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You are a partner at Green, Green and Associates, a medium to large accounting firm. One Thursday
morning a letter is received from Goodies Sweet Manufacturing (GSM) Company, a local unlisted UK
company which requests your company to submit a proposal for its current audit. You understand, from the
letter, that GSM is of a size considered small by UK legislation but that its principal shareholder, who is not
employed by the company, using a legal entitlement has insisted on an audit by an independent auditor. This
will be GSMs first independent audit.

The senior partner in your firm has assigned you to be GSMs engagement partner.

The following overview takes us through the stages, procedures and documents involved in such an audit
engagement (and also gives you quite a good idea of what is involved in the ACCA Paper F8 syllabus).

Start here and
get an overview
of what Paper
F8 entails ..
An overview of what is involved in
Paper F8 (1 of 4)

7
What you
need to know
BEFORE
YOU
START
Before you get involved in the audit work itself, you must be aware of the
background requirements. In essence, you must know and act
according to:

the objectives of the audit
the legal requirements
the auditing standards that you will use (your firm has adopted the
International Auditing Standards issued by the IAASB)
the code of ethical behaviour of your professional body (you are
an accredited member of the ACCA)
the procedures and rules of your accounting firm.

This is no problem for you. You are a professional accountant
accredited by ACCA.
Obtaining the
engagement
PHASE 1
Acceptance OF the client .. Acceptance BY the client
This is the first step on your journey through the audit. In this phase of the
audit you will have two objectives:

(i) To examine GSM (the client - who the International Auditing Standards
refer to as entity) to determine whether there is any reason to reject
the engagement. In others words, do we want the audit engagement?

(ii) On the basis that you do want to obtain the audit engagement to
convince GSM to employ your firm.

This first step involves six procedures:

1. Determine whether your accounting firm is able to meet the ethical
requirements regarding the client.

2. Determine whether your firm will need to employ the work of other
specialists or experts as part of the audit.

3. Communicate with predecessor auditor. (Not in this case because it
is a first audit.)

4. Select the staff who will form the audit team and consider the audit
costs and budget.

5. Prepare a client proposal.

6. Prepare and obtain an engagement letter which will only be issued
when the client agrees to your proposal.
Paper F8 (2 of 4)

8
Planning the
audit
PHASE 2
So you have obtained the audit .. Now you need to
plan it!
One day, soon after submitting your proposal a telephone call from GSM
finance director confirms that your accounting firm has been awarded the
engagement contract. You have sent your new client the engagement letter
and all is satisfactory. So now you need to plan the audit not an easy task!

Your audit will be made of two main parts:

(i) Tests of controls. This is sometimes referred to as the interim audit
and involves mainly testing the entitys internal control structure to
establish how much reliance can be placed on it.

(ii) The final audit. This involves detailed substantive procedures such as
gathering and assessing evidence.

The aim of the audit is to give assurance to the users of the financial
statements (mainly the shareholders of GSM) that there is no material
misstatement of the financial statements.

The procedures involved in planning the two parts of your audit will be:

(i ) To collect and analyse more information about GSM. This will help
you understand the entity and its environment, including its internal
controls.

(ii) Assess the risks of material misstatements of GSMs financial
statements.

(iii) Determine the level of materiality you consider acceptable.

(iv) Use the information and your analysis to prepare a planning
memorandum for the audit.

(v) Prepare an audit plan (or programme) which will contain the
procedures you plan in response to the risks you have identified.

Paper F8 (3 of 4)

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Testing and
evidence
PHASE 3
Down to work gathering data and carrying out audit
tests
The audit team have been assigned. Your plan is established . after
discussion with the members of the audit team Now the audit work begins.
Your aims in this, the main part of the audit, are to test for evidence of the
strengths or weakness of GSMs internal control structure (interim) and then
test for evidence of the fairness of the financial statements (final).

This phase of your audit will involve five main procedures:

1. Tests of GSMs internal control
2. Substantive tests of transactions.
3. Analytical procedures.
4. Tests of details of balances.
5. Search for unrecorded liabilities.

Everything that is done and all the evidence gathered will be documented in
the audits working papers.

Evaluation
and reporting
PHASE 4
You will now need to wrap up the audit and of
course produce reports

Your objective in this final phase of the audit is to complete the audit
procedures, form an audit opinion and issue audit reports.

There are at least seven procedures involved:

1. Evaluate evidence of governance in GSM.
2. Perform procedures to identify subsequent events.
3. Review financial statements and other relevant materials to assess
the going concern assumption for GSM.
4. Perform wrap-up procedures.
5. Prepare Matters for Attention of Partners.
6. Report to the board of directors. This is called a Management Letter.
7. Prepare Audit report.

Now you can relax
a job well done!
Paper F8 (4 of 4)

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ACCA Paper F8 syllabus:
Map of the mnemonics and charts
AUDIT FRAMEWORK
AND REGULATION
Section
A
INTERNAL AUDIT
Section
B
PLANNING AND RISK
ASSESSMENT
Section
C
INTERNAL CONTROL
Section
D
AUDIT EVIDENCE
Section
E
REVIEW
Section F
REPORTING
Section G
The Audit and Assurance syllabus is essentially divided into seven areas. The Tony Surridge
+
AddVance e-
book is based on the ACCA syllabus and contains the following seven sections:

1. The concept of audit and other assurance engagements
2. Statutory audits
3. The regulatory environment and corporate governance
4. Professional ethics and ACCAs Code of Ethics and Conduct
1. Internal audit and corporate governance
2. Differences between external and internal audit
3. The scope of the internal audit function
4. Outsourcing the internal audit department
5. Internal audit assignments
1. Objective and general principles
2. Understanding the entity and knowledge of the business
3. Assessing the risks of material misstatement and fraud
4. Analytical procedures
5. Planning an audit
6. Audit documentation
7. The work of others
1. Internal control systems
2. The use of internal control systems by auditors
3. Transaction cycles
4. Tests of control
5. The evaluation of internal control components
6. Communication on internal control
1. The use of assertions by auditors
2. Audit procedures
3. The audit of specific items
4. Audit sampling and other means of testing
5. Computer-assisted audit techniques
6. Not-for-profit organisations
1. Subsequent events
2. Going concern
3. Management representations
4. Audit finalisation and the final review
1. Audit reports
2. Reports to management
3. Internal audit reports
Click on Section E above, in the pink box, to review a small extract.

11
Section E:

AUDIT
EVIDENCE
1. The use of assertions by auditors
2. Audit procedures
3. The audit of specific items
4. Audit sampling and other means of testing
5. Computer-assisted audit techniques
6. Not-for-profit organisations

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Substantive procedures
Substantive procedures are tests performed to obtain audit evidence to detect material misstatements in
the financial statements, and are of two types:

(a) tests of detailed transactions; and
(b) analytical procedures.

Para 4, ISA 500

The objective of the auditor is to design and perform audit procedures in such a way as to enable
the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable
conclusions on which to base the auditors opinion.

Sufficiency and appropriateness are interrelated and apply to both tests of controls and substantive
procedures.

Sufficiency is the measure of the QUANTITY of audit evidence. (Sufficient evidence has been gathered
when AUDIT RISK is considered to be at an acceptable level. Auditors use professional judgement to
determine the extend of tests necessary to obtain sufficient evidence. In exercising this professional
judgement, auditors consider both the materiality of the item in question (e.g. monetary size) as well as the
inherent risk of the item (e.g. cash, due to its liquidity, may have a higher inherent risk than do certain
property, plant and equipment items).

Appropriateness is the measure of the QUALITY or RELIABILITY of the audit evidence. The quantity of
audit evidence required is affected by the level of risk in the area being audited. The quality and reliability
of audit evidence is influenced by its source and by its nature. The following generalisations may help in
assessing the quality and reliability of audit evidence.

Sufficiency
Appropriateness
We should remember what was discussed earlier:
Whenever an individual or a business decides that
success has been attained, progress stops.

Thomas J . Watson J r
Relevant standard:
ISA 500

13
Gathering
evidence
We start here
Substantive procedures form
the main part of the audit
Substantive procedures:
What you need to know ..
Assertions
Sufficient and
appropriate
evidence
Sampling
Accounting
estimates
Opening
balances
Substantive tests:
Bank and cash
Substantive tests:
Accounts receivable
Substantive tests:
Bank and cash
Substantive tests:
Inventory
Substantive tests:
Accounts payable
Substantive tests:
Property, plant
and equipment
PP&E)
Substantive tests:
Long-term debt
Substantive tests:
Shareholders equity
Confirmation

14
Gathering evidence:
Financial statements assertions
Audit tests are designed and conducted to obtain evidence about the financial statement assertions.
Financial statement assertions are the representations of the directors that are contained in the financial
statements. By authorising the financial statements, the directors are making representations about the
information therein. In planning and performing the audit, an auditor considers these assertions for the
various financial statements and accounts. When all of these assertions have been met for an account, the
account is confirmed with the accepted accounting principle. Thus, errors or fraud may be viewed as having
the effect of misstating one or more of the assertions. These representations or assertions may be described
in general terms in a number of ways, for example:

C Completeness. The assertion is that all transactions and accounts are included, and there are no
liabilities, transactions, events, unrecorded assets or undisclosed items.
O Occurrence. The assertion is that the transaction or event took place during the relevant period.
M Measurement. The assertion is that the transaction or event is recorded in the proper amount.
P Presentation and disclosure. The assertion is that the item is disclosed, classified and described in
accordance with the applicable reporting framework (relevant legislation and applicable accounting
standards).
A Appropriate valuation. The assertion is that the asset or liability is recorded at the appropriate
carrying value (e.g. inventories are stated at lower of cost or market value).
R Rights and obligations. The assertion is that assets or rights of the entity are liabilities or obligations
at a given date (e.g. that the firm has legal right to the inventory).
E Existence. The assertion is that the asset or liability exists at a given date.
Memory jog: in order to obtain evidence about
the financial statement assertions the auditor
needs to COMPARE many things against
the financial statements.

15
Gathering evidence:
Assertions tested by the auditor
OCCURRENCE
COMPLETENESS
ACCURACY
CUTOFF
CLASSIFICATION
Management assertions
used by the auditor about
CLASSES OF
TRANSACTIONS
AND EVENTS FOR
THE PERIOD
UNDER REVIEW

that transactions and events that have been
recorded have occurred and pertain to the
organisation.

that all transactions and events that should have
been recorded have been recorded.

that amounts and other data relating to recorded
transactions and events have been recorded
appropriately.

that transactions and events have been recorded
in the correct accounting period.

that transactions and events have been recorded
in proper accounts.
EXISTENCE
RIGHTS AND
OBLIGATIONS
COMPLETENESS
VALUATION AND
ALLOCATION
BALANCES AT
THE PERIOD END

that assets, liabilities and equity interests exist.

that the organisation holds or controls the rights
to assets, and liabilities are the obligations of
the organisation.

that all assets, liabilities and equity interests
that should have been recorded have been
recorded.

that assets, liabilities, and equity interests are
included in the financial statements at
appropriate amounts and any resulting
valuation or allocation adjustments are
appropriately recorded.

OCCURRENCE AND
RIGHTS AND
OBLIGATIONS
COMPLETENESS
CLASSIFICATION AND
UNDERSTANDABILITY
ACCURACY AND
VALUATION

that disclosed events, transactions and other
matters have occurred and pertain to the
organisation.

that all disclosures that should have been
included in the financial statements have been
included.

that financial information is appropriately
presented and described, and disclosures are
clearly expressed.

that financial and other information are disclosed
fairly and at appropriate amounts.

PRESENTATION
AND DISCLOSURE
About
About
About

16

Procedures and approach:
Substantive audit tests: terms

Note: Some of the more frequent terms you will find in written audit programmes include the following:

Agree To confirm that balances in the general ledger are correct.

Analyse Separation of account balances into separate parts and the ascertainment of
those parts.

Compare To set one group of figures with another set so as to ascertain how far
they agree or disagree, such as to compare the beginning balances with
last years audited figures.

Count To sum the value of (volume, monetary value, etc), such as reckoning the
value of cash, inventory, etc.

Examine To enquire into evidence, such as to enquire into authoritative documents.

Foot Add figures, such as to add the figures in a column of monetary values.

Prove To test the genuineness of, such as to re-calculate totals to ascertain their
correctness.

Read To interpret facts, such as to read minutes of directors meetings, etc.

Reconcile To prove consistency, such as to test that cash balances, or accounts
receivables balances are consistent with the facts.

Review An inspection of, such as the inspection of disclosures, legal documents,
etc.

Scan To examine critically, for example to study a set of data to specifically
identify unusual items.

17
the auditor to obtain SUFFICIENT
and APPROPRIATE audit evidence.
We must remember that the objective of an audit
of financial statements is to enable the auditor to
express an opinion whether the financial
statements are prepared, in all material respects,
in accordance with an identified financial reporting
framework.
Definition
Gathering evidence:
Sufficient and appropriate audit evidence
Audit
objective
Which
requires
Audit
evidence
Audit tests
Evidence
is obtained
from
Test of controls
Substantive
procedures
Audit evidence is the information that
auditors obtain in arriving at the
conclusions on which their report is
based.
Audit evidence includes all the information
contained within the accounting records and
accounting system underlying the financial
statements, and other information gathered by
the auditors, such as confirmations from third
parties. They are not expected to look at all the
information and will usually select samples.
To reach a position in which to
express a professional opinion,
the auditor needs to gather
evidence from various sources.
There are two types of test which
the auditor will carry out.
Tests of controls are conducted to obtain audit
evidence about the effectiveness of the:
design of the accounting and internal control
systems to establish whether they are suitably
designed to prevent or detect and correct
material misstatements; and
operation of the internal controls throughout
the period being audited.

Substantive procedures are tests to obtain audit
evidence to detect material misstatements in the
financial statements. There are generally of two
types:
Analytical procedures
Other substantive procedures such as tests of
detail of transactions and balances, review of
minutes of directors meetings and enquiry.

Gathering evidence:
Quality of evidence
ISA 500 Audit evidence requires auditors to

obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to
base the audit opinion.

Sufficiency and appropriateness are interrelated and apply to both tests of controls and substantive
procedures.

Sufficiency is the measure of the QUANTITY of audit evidence. (Sufficient
evidence has been gathered when AUDIT RISK is considered to be at an
acceptable level. Auditors use professional judgement to determine the
extend of tests necessary to obtain sufficient evidence. In exercising this
professional judgement, auditors consider both the materiality of the item in
question (e.g. monetary size) as well as the inherent risk of the item
(e.g. cash, due to its liquidity, may have a higher inherent risk than do certain
property, plant and equipment items).

Appropriateness is the measure of the QUALITY or RELIABILITY of the
audit evidence. The quantity of audit evidence required is affected by the
level of risk in the area being audited. The quality and reliability of audit
evidence is influenced by its source and by its nature. The following
generalisations may help in assessing the quality and reliability of audit
evidence.

W Written. Evidence in the form of documents (paper or electronic) or written representations are
more reliable than spoken words or representations.
O Originals. Original documents are more reliable than photocopies, or facsimiles.
R Records with strong controls. Evidence obtained from the organisations records is more
reliable when the system that produces them uses strong and effective controls.
D Directly by the auditor. Evidence obtained directly by the auditor is more reliable than that
obtained indirectly or by inference.
S Sources that are external. Audit evidence from external sources is more reliable than that
obtained from the organisations records.

Memory jog: WORDS are more reliable when they come from
external sources, and are obtained directly by the auditor, and
written (not just spoken), are from originals and are produced by
systems using strong and effective controls.
Sufficiency
Appropriateness
Relevant standard:
ISA 500
18

19
Audit evidence can be obtained by one or more of the following procedures:

C Confirmation. Seeking confirmation from another source concerning details in the organisations
accounting records, e.g. confirmation from customers of debtor balances.
A Assets inspection. Inspection of assets that are recorded in the accounting records to confirm
existence, to give evidence of valuation, but without confirming rights and obligations.
R Recalculation. Checking arithmetic of organisations records, e.g. totalling a ledger account.
R Re-performance. Independently executing procedures or controls, either through the use of
computer assisted audit techniques (CAATs) or manually.
I Inquiry. Seeking information from the organisations staff or external sources. Strength of
evidence depends on the knowledge and the integrity of the source of information.
E Evaluation by analytical procedures. Evaluating and comparing financial and/or non-financial
data for plausible relationships.
S Sight (observation). Involves watching a procedure being performed, e.g. cash and cheques
being banked. This has limited value, as it only confirms the procedure took place when the
auditor was present.

Gathering evidence:
Audit procedures for obtaining audit information
Memory jog: the auditor CARRIES out
these procedures in order to obtain the
necessary audit evidence.
Im telling
you.. This is
an important
page
Note: Some sources add TWO more procedures to this list

1. Vouching - checking from recorded entry to supporting document.
2. Tracing - checking from supporting document to recorded entry.

20
Gathering evidence:
Audit procedures for obtaining audit information 1 of 2

CONFIRMATION
Used to corroborate
information contained in
the accounting records
Examples
Used to confirm:
accounts receivable
accounts payable
balances held with banks
cash surrender value of life insurance
notes payable (with lenders or bond holders)
etc.
INSPECTION
Consists of
examining records,
documents, or
tangible assets
Examples
Used to review:
sales orders
sales invoices
purchase invoices
shipping documents
bank statements
customer return documents
customer complaint letters
etc.
RECALCULATION
Consists of checking the
arithmetical accuracy of
source documents and
accounting records or
performing independent
calculations.
Examples
Extending sales invoices and inventory..
Adding journal and subsidiary records.
Checking the calculation of prepaid expenses.
Calculation of depreciation expense.
etc.
RE- PERFORMANCE
Consists of independent
execution of procedures or
controls that were originally
performed as part of the
entitys internal control.
Examples
Re-perform aging of accounts receivable.
Use of CAATs* to check controls recorded
in the database.
* CAATs are Computer aided auditing techniques (which we cover later.)

21
Gathering evidence:
Audit procedures for obtaining audit information 2 of 2

INQUIRY
Consists of seeking
information of
knowledgeable
persons inside or
outside the entity
Examples
Obtaining written or
oral information from
the client in response
to specific questions
during the audit
ANALYTICAL
PROCEDURES
Consist of the analysis of
significant ratios and trends
including the resulting
investigation of fluctuations
and relationships that are
inconsistent with other
relevant information or that
deviate from predictable
amounts.
Examples
Calculation trends in sales over the past few
years.
Comparing net profit as a percentage of sales
in current year with the percentage of the
preceding year.
Comparing client current ratio to the industry
current ratio.
Comparing budgets to actual results.
Etc.
OBSERVATION
Consists of looking at a process or
procedure being performed by others.
Examples
Observation by the auditor of the
counting of inventories by
entitys personnel.
Site visit at the clients facilities.
Etc.

22
When asked a general question about how to design audit
procedures you should remember the auditors need to:

1. Concentrate on managements financial statements
assertions.
2. Link them to the three main aspects that concern the audit.
3. Use appropriate procedures to seek assurance about the
three main aspects.
Financial statements assertions:

C Completeness
O Occurrence
M Measurement
P Presentation and disclosure
A Appropriate valuation
R Rights and obligations
E Existence
Seeking assurance about the assertions in
terms of the three main aspects of:

1. Classes of transactions and events for
the period under review.
2. Balances at the period end.
3. Presentation and disclosure
Audit procedures:

C Confirmation
A Assets inspections
R Re-calculations
R Re-performance
I Inquiry
E Evaluation by analytical
techniques
S Sight (observation)

What is the auditor doing?
What are managements assertions?
How does the auditor do it?
Click here for the mnemonic COMPARE
Click here for the mnemonic
CARRIES

23
Gathering evidence: Substantive audit tests
Corroborating evidence is the supporting documentation that is the basis for a transaction recorded in the
journals and ledgers, and assertions represented in the financial statements. While there may be many types
of corroborating evidence, the following list are the ones mainly used by auditors carrying out substantive
procedures. Remember them as the mnemonic: IS A CAP.

I Interrelationships. Interrelationships within the data such as interest expense and accrued interest
payable, unusual items, etc. provide assurance as to the reasonableness of items and the absence of
material misstatements due to errors.
S Subsequent events. Subsequent events confirm the status of estimates and assertions at the
financial date. For example, subsequent collection of receivables gives evidence as to their valuation
and collectability.

A Authoritative statements. Authoritative statements by a client provide support for a treatment of
certain items in the recording and aggregation of transaction data. Authoritative statements by third
parties such as confirmations provide evidence concerning the existence of transactions with third
parties.

C Calculations. Calculations by auditors such as the calculation of depreciation expense, tax liabilities,
etc. support the application of IASs.
A Authoritative documents. Authoritative documents such as property deeds, suppliers invoices.
P Physical existence. Physical existence is determined by observation and count.

Memory jog: just remember it as IS A CAP.

24
Problems
associated with
confirmation
Situations
where
confirmation
may not be
appropriate
Risks where
confirmation
may be
appropriate
Negative
confirmation
may be
appropriate
Gathering
evidence:
Confirmation
method
Confirmation
We start here
Gathering evidence: Confirmation
What you need to know
In the main confirmation
means writing a letter to a
third party

25
Gathering evidence: Confirmation method 1 of 5
Confirmation
Confirmation consists of the response to an enquiry of a third party to collaborate
information contained in the accounting records. The procedure is the process of
asking third parties to confirm information known to them, such as asking
receivables (debtors) to confirm amounts due to them. Confirmation is the auditors
receipt of a request from an independent third party verifying the accuracy of the
information requested. It is the act of obtaining audit evidence from a third party.
Confirmation is an
example of a
substantive test
Confirmation, say confirmation of balances of accounts receivable, will provide a
test of the ending account balance and is therefore a detailed test of a balance a
type of substantive test.
Confirmation is a
generally accepted
auditing procedure
But take note of the Mnemonic: ACCA.
Key procedures
necessary to
obtain a
confirmation
1. Auditor reviews the need to obtain a confirmation using the information
obtained from the preliminary risk assessment of the client.

2. Auditor prepares the confirmation letter as appropriate for the particular
request, for example in the case of a bank confirmation the letter is in the
format agreed with banks in the clients jurisdiction.

3. The client authorises (signs) the letter thus giving the third party (e.g. the
debtor) permission to divulge confidential details. Where the client has
provided the third party with a standing authority to disclose information to the
auditor, the authorising reference is quoted on the confirmation request letter.

4. The auditor, not the client, mails these letters. The auditor should check
randomly to ensure that letters are addressed to the respondents that the
auditor chose, and for the amounts shown in the books of account.

5. The third party is requested to respond in writing directly to the auditor.

Confirmation may
be used for
specific risks
An auditor may use confirmation in response to a specific risk of misstatement.
Examples of likely risks are shown in the Mnemonic: A CA IS BLIND.

26
26
Advantages of
using confirmation
Confirmation provides highly persuasive evidence, because audit evidence is
more reliable when it is obtained from independent sources, para A1,
ISA 500 Audit Evidence states:

The reliability of information to be used as audit evidence, and therefore of
the audit evidence itself, is influenced by its source and its nature, and the
circumstances under which it is obtained, including the controls over its
preparation and maintenance where relevant. Therefore, generalizations
about the reliability of various kinds of audit evidence are subject to
important exceptions. Even when information to be used as audit evidence is
obtained from sources external to the entity, circumstances may exist that
could affect its reliability. For example, information obtained from an
independent external source may not be reliable if the source is not
knowledgeable, or a managements expert may lack objectivity. While
recognizing that exceptions may exist, the following generalizations about
the reliability of audit evidence may be useful:

The reliability of audit evidence is increased when it is obtained from
independent sources outside the entity.

- There is, however, a distinction between evidence provided by independent
third parties acting in a professional capacity, e.g. a bank manager, lawyer,
other qualified accountants, and evidence from the third parties such as
customers and suppliers in the business contact group.

- A letter from, say a debtor, confirming that the amount due from him/her is
correctly recorded in the books of the client, is useful to the auditor, but
generally, non-professional business contacts such as debtors may have a
closer, more dependent relationship to the client.

- Neither can the auditor be certain that the debtors accounting and control
systems are reliable.

Problems
associated with
confirmation
For possible disadvantages of using confirmation refer to Mnemonic: CINT
Relevant standard:
ISA 505

27
Positive and
negative
confirmation
ISA 505
External Confirmations identifies two forms of confirmation:
(i) Positive confirmation
(ii) Negative confirmation

Positive
confirmation
The positive form/letter requests a reply from the recipient by either
confirming agreement with stated information or by asking the
respondent to fill in information (a blank confirmation).

By using the blank confirmation approach the auditor may reduce the
risk that a respondent replies to a request without verifying the
information. With a blank confirmation the recipient must enter the
value from their own records.

However, the blank confirmation letter requires more work from the
recipient and this may result in lower response rates.

When no reply is received to a positive confirmation request, a second
letter is normally mailed to the third party. If a reply is still not received,
or the first confirmation request is returned undelivered, the auditor
normally performs alternative procedures. Para 6, ISA 505 defines
non-response as:

A failure of the confirming party to respond, or fully respond, to a
positive confirmation request, or a confirmation request returned
undelivered.

Para 12, ISA 505 states:

In the case of each non-response, the auditor shall perform alternative
audit procedures to obtain relevant and reliable audit evidence. (Ref:
Para A18-A19).

Relevant standard:
ISA 505
NEXT CHART NEXT MNEMONIC

28
Gathering evidence:
Confirmation method- 4 of 5
Positive and
negative
confirmation
(continued)
Positive confirmation requests are normally appropriate when inherent
and/or control risk is assessed as high (in other words a low level of
detection risk is to be achieved).
Negative
confirmation
The negative confirmation form/letter confirmation requests the
recipient to respond only if he/she disagrees with the information
stated on the request. Para 15, ISA 505 External Confirmations states
as follows:

Negative confirmations provide less persuasive audit evidence than
positive confirmations. Accordingly, the auditor shall not use negative
confirmation requests as the sole substantive audit procedure to
address an assessed risk of material misstatement at the assertion
level unless all of the following are present: (Ref: Para. A23)

(a) The auditor has assessed the risk of material misstatement as low
and has obtained sufficient appropriate audit evidence regarding
the operating effectiveness of controls relevant to the assertion;

(b) The population of items subject to negative confirmation
procedures comprises a large number of small, homogeneous,
account balances, transactions or conditions; (See Mnemonic:
LANE and para 15, ISA 505)

(c) A very low exception rate is expected; and

(d) The auditor is not aware of circumstances or conditions that would
cause recipients of negative confirmation requests to disregard
such requests.
Relevant standard:
ISA 505


29
When client does
not authorise
confirmation
(continued)
If the auditor concludes that managements refusal to allow the auditor to send a
confirmation request is unreasonable, or the auditor is unable to obtain relevant
and reliable audit evidence from alternative audit procedures, the auditor would
communicate with those charged with governance in accordance with ISA 260
(Revised and Redrafted) Communication with Those Charged with Governance.

The auditor also would determine the implications for the audit and the auditors
opinion in accordance with ISA 705 Modifications to the Opinion in the
Independent Auditors Report.

The implications of ISA 505 External Confirmations are:

(i) When the auditor seeks an external confirmation and management refuses
to grant permission for him/her to do so, the auditor should carefully balance
the validity of the clients request and the validity of the third-party
confirmation.

(ii) If the auditor agrees with the reasonableness of managements request not
to seek third-party confirmation regarding a particular matter, the auditor
should apply alternative procedures to obtain sufficient and adequate
evidence regarding that matter.

(iii) If the auditor does not accept the validity of managements refusal and is
prevented from carrying out the confirmation, there has been a limitation
on the scope of the auditors work and he/she should consider the impact of
this limitation on the auditors opinion and report.

Situations where negative confirmation may be appropriate
Memory jog: in such cases the negative confirmation request is a
LANE the auditor can use.
Negative confirmation requests may be appropriate where:
L Large numbers of small homogeneous, account balances, transactions or
conditions is involved in the test.
A Assessed level of inherent risk and control risk is low, and therefore there is a low risk of
material misstatement.
N No obvious reason exists why respondents will disregard the confirmation requests. The
auditor is not aware of circumstances or conditions that would cause recipients of negative
confirmation requests to disregard such requests.
E Errors of a substantial number are not anticipated. A very low exception rate is expected.

30

A Accounts receivable balance with debtors.
- the auditor may take a random sample, or
- may list customers with very large balances or very small balances, customers that are slow in
paying, and/or that buy and pay erratically
- the auditor then gives this list to the client to prepare a confirmation letters (format already
agreed) requesting that customers reply direct to the auditor
- the auditor, not the client, mails these letters.

C Contract terms with customers, creditors or suppliers. Auditors are interested in all contracts
and in particular long-term notes and bonds payable, stock options, pension agreements, contracts
with vendors for future delivery of supplies, government contracts for completion, royalty agreements,
trade-union contracts, and leases. Contracts may affect the assessed inherent risk.
A Accounts payable balance. Similar approach is taken to that adopted for accounts receivable (see
above).

I Inventory quantity and value held by third parties. For example, if the client is involved with
timber importation and the timber is held in bonded warehouses until required by the entity for
manufacture and sale, the auditor would normally regard a letter from the bonded warehouse
company that they hold stocks of timber (of a stated quantity/value/date) on behalf of the client as
good evidence, provided that the warehouse company is of good reputation.
S Shares outstanding with stock transfer agents. A stock transfer agent is a company (broker),
usually a third party unrelated to stock transactions, which cancels the name and certificate of the
former stockholder who 'sold' the stock, and substitutes the 'new' owner's name on the Official Master
Shareholder listing.

B Bank balances with banks As part of their verification procedures, auditors obtain confirmation from
bank managers of bank balances and other matters at the year-end. The letter requests the bank to
give details of bank accounts, of customers assets held, either as a security or for safe custody, of
contingent liabilities and certain other information. (A contingent liability is a potential future obligation
to an outside party for an unknown amount resulting from the outcome of a past event).
L Life insurance cash surrender value with insurer.
I Insurance cover with insurer.
N Notes payable with lender such as promissory notes held by suppliers.
D Debenture or bond holders to determine indenture conditions.

Gathering evidence:
Specific risks for which confirmation may be relevant
Memory jog: A certified auditor (CA) IS often BLIND
concerning existence, quantity and condition of assets and liabilities
relating to a third party without obtaining independent confirmation
from that third party.

31
Confirmation of accounts or balances is a generally accepted auditing procedure, unless:

A Account or balance is immaterial.
C Confirmation would be ineffective as an audit procedure possibly due to the inability of the
confirmations to adequately address the completeness assertion.
C Combined assessment of inherent and control risk is low e.g. in situations where the auditor
feels that there is low risk of material misstatement.
A Assessment using other substantive evidence is sufficient to reduce the audit risk to an
acceptable level e.g. confirmation procedures may be omitted due to the availability of externally
generated evidence (e.g. both purchase agreements and suppliers invoices)

Gathering evidence:
Situations where confirmation may not be appropriate
Memory jog: blame the ACCA for having to learn all this.
Possible disadvantages of confirmations are:

C Costly way of gathering evidence.
I Inconvenient to those asked to supply the information.
N Non-compliance by recipients of confirmation letters.
T Time-consuming for the auditor.

Gathering evidence:
Problems associated with confirmation
Memory jog: CINT is a word that has no meaning (but thats the
case with Kit-Kat, Kodak, Twix and many other brand names which are
used specifically for quick memory recall!)

32
Disadvantages
of statistical
sampling
Advantages
of sampling
Statistical
sampling
techniques
Evaluation
of tests
Testing the
sample
Sample
selection
methods
Deciding
sample size
Design of the
sample
Where
sampling is
not
appropriate
Three steps
Main
aspects
Sampling
We start here
Gathering evidence by sampling:
What you need to know
Many students find sampling
a difficult concept.
ISA 530
might help!
Relevant standard:
ISA 530

33
Gathering evidence by sampling
Risk
assessment
Risk-based
auditing
Audit risk
Inherent risk
Control risk
Detection risk
Testing by
sample
Design of
sample
Testing by
sample
Evaluation of
test results
Statistical v
non-statistical
Statistical
sampling
techniques
Objectives
Sample
population
Sample size
Selection
method
Random
selection
Haphazard
selection
J udgemental
selection
Block
sampling
Systematic
sampling
Test of
controls
Substantive
procedures
Analysis
of errors
Inferences
Attribute
sampling
Variables
sampling
Monetary-unit
sampling
Relevant standard:
ISA 530


Appendix A:
International Standards on Auditing:
June and December 2013 Examinations 1 of 5
The following six screens itemise the International
Audit Standards and other examinable documents for
the J une and December 2013 examinations.

Reference is made to them as applicable in the body
of this Tony Surridge
+
AddVance e-publication.

Hyperlinks are provided both on the following
screens or when referred to in the text.
34


Knowledge of new examinable regulations issued by 30th September will be examinable in examination
sessions being held in the following calendar year. Documents may be examinable even if the effective date is
in the future. This means that all regulations issued by 30th September 2012 will be examinable in the
J une and December 2013 examinations.

The study guide offers more detailed guidance on the depth and level at which the examinable documents
should be examined. The study guide should therefore be read in conjunction with the examinable documents
list.

Accounting Standards
Paper F8 Audit and Assurance

The accounting knowledge that is assumed for Paper F8 is the same as that examined in Paper F3. Therefore,
candidates studying for Paper F8 should refer to the Accounting Standards listed under Paper F3.

EXAMINABLE DOCUMENTS JUNE AND DECEMBER 2013
AUDIT INTERNATIONAL 2 of 5

Click here Title F8
International Standards on Auditing (ISAs)
CLICK Glossary of Terms
http://web.ifac.org/download/2009_Auditing_Handbook_A005_Glossary.pdf

CLICK

International Framework for Assurance Assignments
http://web.ifac.org/download/2008_Auditing_Handbook_A055_Framework.
pdf

CLICK

Preface to the International Standards on Quality Control,
Auditing, Review, Other Assurance and Related Services
http://web.ifac.org/download/2009_Auditing_Handbook_A004_2009_Prefa
ce-WithConformingAmendments.pdf

ISA 200 Overall Objectives of the Independent Auditor and the Conduct
of an Audit in Accordance with International Standards on
Auditing
http://web.ifac.org/download/2009_Auditing_Handbook_A008_ISA_200.pdf

ISA 210 Agreeing the Terms of Audit Engagements

35


Click here Title F8
ISA 230 (Redrafted) Audit Documentation

ISA 240 (Redrafted) The Auditors Responsibilities Relating to Fraud in
an Audit of Financial Statements

ISA 250 (Redrafted) Consideration of Laws and Regulations in an Audit
of Financial Statements

ISA 260

(Revised and Redrafted) Communication with Those Charged
with Governance

ISA 265 Communicating Deficiencies in Internal Control to those
Charged with Governance and Management

ISA 300 (Redrafted) Planning an Audit of Financial Statements

ISA 315

(Redrafted) Identifying and Assessing the Risks of Material
Misstatement Through Understanding the Entity and Its
Environment

ISA 320 Materiality in Planning and Performing and Audit

ISA 330

(Redrafted) The Auditors Responses to Assessed Risks

ISA 402

Audit Considerations Relating to an Entity Using a Service
Organisation

ISA 450 Evaluation of Misstatements Identified During the Audit

AUDIT INTERNATIONAL - 3 of 5
36


Click here Title F8
ISA 500 Audit Evidence

ISA 501 Audit Evidence Specific Considerations for Selected Items

ISA 505

External Confirmations

ISA 510

(Redrafted) Initial Audit Engagements Opening Balances

ISA 520

Analytical Procedures

ISA 530

Audit Sampling

ISA 540

(Revised and Redrafted) Auditing Accounting Estimates,
Including Fair Value Estimates and Related Disclosures

ISA 560

(Redrafted) Subsequent Events

ISA 570

(Redrafted) Going Concern

ISA 580

(Revised and Redrafted) Written Representations

ISA 610 Using the Work of Internal Auditors

ISA 620 Using the Work of an Auditors Expert

37


ISA 700

Forming an Opinion and Reporting on Financial Statements

ISA 705 Modifications to the Opinion in the Independent Auditors
Report

ISA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs
in the Independent Auditors Report

ISA 710

Comparative Information Corresponding Figures and
Comparative Financial Statements

ISA 720

(Redrafted) The Auditors Responsibilities Related to Other
Information in Documents Containing Audited Financial
Statements

International Standards on Assurance Engagements (ISAEs)
ISAE
3000
Assurance Engagements other than Audits or Reviews of
Historical Financial Information
http://web.ifac.org/download/2008_Auditing_Handbook_A270_ISAE_3000.
pdf

Other documents
CLICK ACCAs Code of Ethics and Conduct
http://rulebook.accaglobal.com/

CLICK IFACs Code of Ethics for Professional Accountants
http://web.ifac.org/download/2008_Auditing_Handbook_A025_Code_of_Et
hics.pdf

CLICK UK Code of Corporate Governance 2012 as an example of a
code of best practice
http://www.frc.org.uk/getattachment/b0832de2-5c94-48c0-b771-
ebb249fe1fec/The-UK-Corporate-Governance-Code.aspx

38

39
Examples below are taken from UK legislation (Companies Act, 2006). (Note: It is a lengthy Act and
if you want to see it in its complete form will take time to download. Each separate Section [indicated
below] is hyperlinked almost instantly.)

Sec. 248 Minutes of directors' meetings
Sec. 382 Companies qualifying as small: general
Sec. 415 Duty to prepare directors' report
Sec. 418 Contents of directors' report: statement as to disclosure to auditors
Sec. 419 Approval and signing of directors' report
Sec. 437 Public companies: laying of accounts and reports before general meeting
Sec. 475 Requirement for audited accounts
Sec. 476 Right of members to require audit
Sec. 477 Small companies: conditions for exemption from audit
Sec. 478 Companies excluded from small companies exemption
Sec. 489 Appointment of auditors of public company: general
Sec. 490 Appointment of auditors of public company: default power of Secretary of State
Sec. 491 Term of office of auditors of public company
Sec. 492 Fixing of auditor's remuneration
Sec. 495 Auditor's report on company's annual accounts
Sec. 496 Auditor's report on directors' report
Sec. 497 Auditor's report on auditable part of directors' remuneration report
Sec. 498 Duties of auditor
Sec. 499 Auditor's general right to information
Sec. 501 Auditor's rights to information: offences
Sec. 502 Auditor's rights in relation to resolutions and meetings
Sec. 503 Signature of auditor's report
Sec. 507 Offences in connection with auditor's report
Sec. 510 Resolution removing auditor from office
Sec. 511 Special notice required for resolution removing auditor from office
Sec. 516 Resignation of auditor
Sec. 517 Notice to registrar of resignation of auditor
Sec. 518 Rights of resigning auditor
Sec. 519 Statement by auditor to be deposited with company
Sec. 520 Company's duties in relation to statement
Sec. 521 Copy of statement to be sent to registrar
Sec. 1212 Individuals and firms: eligibility for appointment as a statutory auditor
Sec. 1213 Effect of ineligibility
Sec. 1214 Independence requirement
Sec. 1215 Effect of lack of independence
Sec. 1217 Supervisory bodies
Note: the term public company as used in the Act refers to a plc (i.e. public limited company).
Appendix B
Extracts of UK Companies Act, 2006
(Used only as an illustration of typical legislation in different countries)

Only the first two are active
for demonstration

40
248
Minutes of directors' meetings
(1) Every company must cause minutes of all proceedings at meetings of its directors to be recorded.

(2) The records must be kept for at least ten years from the date of the meeting.

(3) If a company fails to comply with this section, an offence is committed by every officer of the
company who is in default.

(4) A person guilty of an offence under this section is liable on summary conviction to a fine not
exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not
exceeding one-tenth of level 3 on the standard scale.

382
Companies qualifying as small: general
(1) A company qualifies as small in relation to its first financial year if the qualifying conditions are met
in that year.

(2) A company qualifies as small in relation to a subsequent financial year

(a) if the qualifying conditions are met in that year and the preceding financial year;
(b) if the qualifying conditions are met in that year and the company qualified as small in relation
to the preceding financial year;
(c) if the qualifying conditions were met in the preceding financial year and the company
qualified as small in relation to that year.

(3) The qualifying conditions are met by a company in a year in which it satisfies two or more of the
following requirements

1. Turnover Not more than 6.5 million
2. Balance sheet total Not more than 3.26 million
3. Number of employees Not more than 50

(4) For a period that is a company's financial year but not in fact a year the maximum figures for
turnover must be proportionately adjusted.

(5) The balance sheet total means the aggregate of the amounts shown as assets in the company's
balance sheet.

(6) The number of employees means the average number of persons employed by the company in the
year, determined as follows

(a) find for each month in the financial year the number of persons employed under contracts of
service by the company in that month (whether throughout the month or not),
(b) add together the monthly totals, and
(c) divide by the number of months in the financial year.
Appendix B
Extracts of UK Companies Act, 2006
(Used only as an illustration of typical legislation in different countries)


41
The following screens provide specimen audit working papers. They are not exclusive.

You do not have to reproduce these forms in the exam. They are included simply to help
enlarge your understanding.

APPENDIX C
Specimen audit working papers:
Except for the single linkage coloured
pink all linkages are disabled for the
purpose of this free download

42

APPENDIX D
Specimen Working Papers: Index 1 of 2
SPECIMEN AUDIT WORKING PAPERS
Click and
go
Title Number of
screens
F8 P7
Title Screen 1
Click here Permanent File 1
Click here Current File 1
Click here Account Analysis Schedule 1
Click here Client Risk Evaluation Questionnaire 7
Click here Risk Assessment Internal Control Questionnaire 1
Click here Audit Planning Memorandum 6
Click here Audit Programme Accounts Receivable 1
Click here Organisation Chart of Assignment of Authority
and Responsibility
1
Click here Trial Balance 1
Click here Lead Schedule 1
Click here List Schedule 1
Click here Reconciliation: Accounts Receivable 1
Click here Test of Reasonableness Schedule 1
Click here Narrative Description of the Control Environment 1
Click here Internal Control Narrative Table 1
Click here Internal Control Questionnaire:
Accounts Receivable
2
General Accounting System
2
Cash Funds
2
Cash Receipts
2

Please go to the next screen to continue Specimen Audit Working Papers
Specimen Audit Working Papers are also hyperlinked from relevant screens in the text.
CLICK AND GO

43

SPECIMEN AUDIT WORKING PAPERS - 2
Click and
go
Title Number of
screens
F8 P7
Cash Disbursements
2
Inventory and Cost of Sales
2
Fixed Assets
2

Accounts Payable
2

Payroll
2

Click here Manual System: Chart of Accounts 1
Click here Computer System: Chart of Accounts 1
Click here Analytical Review: Planning Stage 3
Click here Computer Input Control Forms: Title Screen 1
Click here Sales Invoices 1
Click here Sales Credit Notes 1
Click here Sales Receipts 1
Click here Purchase Invoices 1
Click here Purchase Payments 1
Click here Bank Receipts 1
Click here Bank Payments 1
Click here Petty Cash Receipts 1
Click here Petty Cash Payments 1
Click here J ournal 1
CLICK AND GO
APPENDIX D
Specimen Working Papers: Index 2 of 2

44
Specimen Working Papers: Permanent File
Description #Pages Index
General Client and Engagement Information I
Client information form
Engagement proposal
1
Engagement letter 3
Statutory and Legal Information II
Articles of Association, Memorandum of Association 1
Special legal, statutory or contractual definitions 2
Members register 3
Extracts of continuing importance:
4
Copies: Title deeds 5
Borrowing agreements, lease agreements 6
Lease agreements 7
Details of other important agreements 8
Accounting System and Internal Control III
Documentation of accounting system and internal control structure 2
Chart of accounts 3
Authorisation limits, initials and signature list 4
Accounting policy documents and procedure instructions 5
Continuing Audit IV
Minutes of continuing relevance 1
Correspondence of continuing relevance 2
Documentation: computer applications 3
Configuration and registration codes: hardware and software 4
Financial Statement Information V
Financial statement analysis/previous years summary 1
Details: intangible on-current assets 2
Details: property, and other single assets with value exceeding $1m 3
Details: other tangible non-current assets 4
Details: holding, subsidiary, associates and other participants 5
Personnel, employment conditions VI
Previous years summary: personnel establishment 1
Collective bargaining agreements, standard employee contracts, salary scales and
individual employee contracts
2
Composition of board of directors 3
Names of directors, roles and contacts 4
Pension arrangements/early retirement rules and regulations 5
Expense allowance rules and regulations 6
PERMANENT FILE
Engagement Code:
Other employment conditions 7
Taxation VII
Organisation Chart of assignment of authority and responsibility 1
Client:
Engagement proposal 2
Legal documents
Contracts
Loan agreements
Other funding agreements
Pension plans
Others
J ust cast your eyes over the separate constituent parts of the typical Permanent Audit File. They are
self-explanatory.

45

A B C D E F G H I J K
L M N O P Q R S T U V W
APPENDIX D:
GLOSSARY OF TERMS
(* International Auditing and Assurance Standards Board [IAASB] - February 2009)

Only a small sample of our Glossary is
available in this free download. The
hyperlinks indicated above have been
disabled for this download.
Partly linked

46

Appropriateness (of audit evidence)*
The measure of the quality of audit evidence; that is, its relevance and its reliability in providing support for
the conclusions on which the auditors opinion is based.

Archived files
An archive is a collection of records, and the location in which the collection is kept. Archives contain records
which have accumulated over the course of time. The archives of an organisation tend to contain
administrative files, business records, memos, official correspondence and meeting minutes. In general,
archives consist of records which have been selected for permanent or long-term preservation,

Arms length transaction*
A transaction conducted on such terms and conditions as between a willing buyer and a willing seller who are
unrelated and are acting independently of each other and pursuing their own best interests.

Arrestment
An arrestment is a notice which prohibits a debtor from handing over to his creditor money or property until a
debt due by that creditor to a third party, the arrester, is paid or secured.

Assertions*
Representations by management, explicit or otherwise, that are embodied in the financial statements, as
used by the auditor to consider the different types of potential misstatements that may occur.

Assertions (and the assertion level, i.e. the assertion for which audit procedures are used) used by the
auditor fall into the following categories:

(a) Assertions about classes of transactions and events for the period under audit:
(i) Occurrencetransactions and events that have been recorded have occurred and pertain to the
entity.
(ii) Completenessall transactions and events that should have been recorded have been recorded.
(iii) Accuracyamounts and other data relating to recorded transactions and events have been
recorded appropriately.
(iv) Cut-offtransactions and events have been recorded in the correct accounting period.
(v) Classificationtransactions and events have been recorded in the proper accounts.

(b) Assertions about account balances at the period end:
(i) Existenceassets, liabilities, and equity interests exist.
(ii) Rights and obligationsthe entity holds or controls the rights to assets, and liabilities are the
obligations of the entity.
(iii) Completenessall assets, liabilities and equity interests that should have been recorded
have been recorded.
(iv) Valuation and allocationassets, liabilities, and equity interests are included in the financial
statements at appropriate amounts and any resulting valuation or allocation adjustments are
appropriately recorded.

Terms beginning with the letter A are continued in the full edition.
GLOSSARY OF TERMS


47
Carrying value
Is the value of an asset or liability in a companys books or balance sheet.

Casual vacancy
Is an unforeseen vacancy

Check-point restart
Checkpoint restart is a facility offered by some database management systems (DBMSs) and backup-restore
software. Checkpoints are taken in anticipation of the potential need to restart a software process.
Many ordinary batch processes on impersonal computers are time-consuming, as are backup and restore
operations. They consist of many units of work. If check-pointing is enabled, checkpoints are initiated at
specified intervals, in terms of units of work or of processing time. At each checkpoint the process's progress
is saved to back-up storage. The contents of the program's memory area may also be saved. The purpose of
check-pointing is to minimise the amount of time and effort wasted when a long software process is
interrupted by a hardware failure, a software failure, or resource unavailability. With check-pointing, the
process can be restarted from the latest checkpoint rather than from the beginning.

Compare
To set one group of figures with another set so as to ascertain how far they agree or disagree, such as to
compare the beginning balances with last years audited figures.

Comparative financial statements*
Comparative information where amounts and other disclosures for the prior period are included for
comparison with the financial statements of the current period but, if audited, are referred to in the auditors
opinion. The level of information included in those comparative financial statements is comparable with that of
the financial statements of the current period.

Comparative information*
The amounts and disclosures included in the financial statements in respect of one or more prior periods in
accordance with the applicable financial reporting framework.

Compare
To set one group of figures with another set so as to ascertain how far they agree or disagree, such as to
compare the beginning balances with last years audited figures.

Compensating cash balance
A compensating cash balance is an account with a bank in which a company has agreed to maintain a
specified minimum amount; compensating balances are typically required under the terms of bank loan
agreements. Such restrictions on cash, when material, should be disclosed in financial statements.

Compliance
Agreement with, such as agreement that there has been correct application of International Financial
Reporting Standards.

Terms beginning with the letter C are continued in the full edition.

GLOSSARY OF TERMS


48

Contents
Tony Surridge Online
+
AddVance Mnemonics and Charts e-book for ACCA Paper F8

The Contents section of this e-book which can be accessed on the
following screens is designed for two purposes:

1. To provide page numbers for hard-copy reference if printed.

2. To provide the basis for individual mnemonics, charts or text sections
to be hyperlinked directly.
The following 22 screens show the contents of our
e-book. Except for those coloured pink, the
hyperlinks have been disabled for the purpose of
this free download

49

Contents- 1 of 22
+
+

Type Title Start screen no No. of screens
SECTION A: AUDIT FRAMEWORK AND REGULATION
Chart An overview of what is involved
28 4
Chart The concept of audit and other assurance
engagements. What you need to know .
37 1
Chart What is an audit? What is an auditor?
38 6
Chart Audit staff
44 1
Chart The need for auditing
45 1
Chart The audit link and terminology
46 1
Mnemonic Assurance engagements
47 1
Chart Services of the professional accountant
48 1
Mnemonic Characteristics of an assurance engagement or a
review engagement
49 1
Mnemonic Examples of suitable criteria used in an assurance
review
50 1
Mnemonic Characteristics for assessing suitable criteria in
assurance reviews
51 1
Mnemonic Subject matter of an assurance engagement
52 1
Chart Engagements to review financial statements
53 7
Chart Example of an Engagement Letter for a Review of
Financial Statements
60 1
Chart Example of an unqualified report for a Review of
Financial Statements
61 1
Chart Example of a report other than unqualified for a
Review of Financial Statements
61 1
Mnemonic Assurance engagements on subject matters other
than historical financial information
62 1
Mnemonic Factors to consider when providing assurance
services on matters other than historical financial
information
63 1
Chart The 5 elements of ALL assurance engagements
64 2
Chart Levels of assurance
66 1

50

Contents 2 of 22
+
+

Chart Services performed by professional accountants a
summary
67 1
Chart What is a financial audit?
68 1
Mnemonic Purposes and advantages of an audit
69 1
Mnemonic Disclosures are audited as well as historical financial
statements
70 1
Chart Limitations of auditing
71 1
Mnemonic The limitations of modern auditing
72 1
Mnemonic Concept of Principal-Agency Theory (PAT) applied to
shareholders and directors
73 1
Chart Protecting the interests of shareholders and other
stakeholders
74 1
Chart Differences between internal and external audit
75 1
Chart Our first look at Internal Audit and review
76 1
Chart Interim and final audits
77 1
Chart The audit report
78 1
Chart The meaning of true and fair
79 1
Chart Materiality of misstatement
80 2
Chart Statutory audit. What you need to know.
82 1
Chart Audit regulation
83 1
Chart International Federation of Accountants (IFAC)
84 3
Chart Relationship between International Standards on
Auditing and national standards The UKs APB
87 2
Mnemonic Statutory framework of auditing
89 1
Chart Auditing and company legislation
90 1
Mnemonic Eligibility to conduct a statutory audit (external audit)
91 1
Chart ACCA is a Recognised Supervisory Body
(Sec. 1217 of UK Companies Act, 2006)
92 1

51

Contents 3 of 22
+
+

Mnemonic Audit exemption
93 1
Mnemonic The audit requirement: Small entity
94 1
Mnemonic The benefits of the statutory audit to small companies
95 1
Mnemonic The arguments against the statutory audit of small
companies
96 1
Chart Appointments of auditors
(Reference made to UK legislation by way of example.)
97 2
Chart Removal of auditors
99 1
Chart Resignation of auditors
100 1
Mnemonic Auditors rights and duties: DUTIES
101 1
Mnemonic The auditors duties
102 1
Mnemonic Auditors rights and duties: RIGHTS
103 1
Chart Reports of listed companies: Directors report
104 1
Chart Reports of listed companies: Auditors report
105 1
Mnemonic The statutory audit opinion
106 1
Chart Public sector auditing
(Reference made to UK by way of example.)
107 1
Chart The regulatory environment and corporate
governance. What you need to know.
108 1
Chart The rights and privileges of the STAKEHOLDER
109 1
Chart Typical stakeholder groups
110 1
Chart The relationships companies have with their
stakeholders
111 1
Mnemonic OECD Principles of Corporate Governance
112 1
Mnemonic General principles of governance
113 1
Mnemonic Features of poor governance
114 1

52

Contents 4 of 22
+
+

Mnemonic Corporate governance: Best Practice
115 1
Chart The FRCs Combined Code (UK)
(FRC is the Financial Reporting Council, UK)
116 1
Chart The FRCs Combined Code: Directors
117 1
Mnemonic Role of the Chairman
118 1
Mnemonic Role of the Board of Directors
119 1
Mnemonic Role of Non-Executive Directors
120 1
Mnemonic Problems with non-executive directors
121 1
Mnemonic Independence of non-executive directors
122 1
Chart Corporate Governance reports which make up the
FRCs UK Code of Corporate Governance 2010
123 1
Chart Committees recommended by Cadbury
124 1
Chart The Audit Committee. What you need to know.
125 1
Chart The FRCs: Accountability band audit
126 1
Mnemonic Aims of the Audit Committee
127 1
Mnemonic Duties of the Audit Committee
128 1
Mnemonic Benefits of the Audit Committee
129 1
Mnemonic Problems associated with having an Audit Committee
130 1
Mnemonic The Audit Committee and internal audit
131 1
Mnemonic Review of Internal Audit by the Audit Committee
132 1
Mnemonic Review of the remuneration of directors policy
133 1
Chart The FRCs Combined Code: Directors remuneration
134 1
Mnemonic The role of the Nomination Committee
135 1

53

Contents 5 of 22
+
+

Chart The FRCs Combined Code: Relations with
shareholders
136 1
Chart Professional ethics and the ACCAs Code of Ethics
and Conduct. What you need to know.
137 1
Mnemonic ACCAs Fundamental Principles
138 1
Mnemonic Summary: Integrity, objectivity and independence
139 1
Mnemonic Potential threats to an auditors independence
140 1
Chart Potential threats to an auditors independence
141 1
Mnemonic Threats to independence and objectivity
142 1
Mnemonic Examples of conflict of self-interest
143 1
Mnemonic Family and other personal relationships
144 1
Mnemonic Factors which have an impact on the auditors ability
to withstand pressure on his/her independence
145 1
Chart Safeguards to protect audit independence
146 1
Mnemonic Safeguards to protect audit independence created by
the accounting profession, legislation or regulation
147 1
Mnemonic Safeguards to protect audit independence within the
client firm
148 1
Mnemonic Safeguards to protect audit independence within the
audit firm
149 1
Mnemonic Preserving independence and objectivity
150 1
Mnemonic Rotation of auditor appointments
151 1
Chart Statement 3.5: The professional duty of confidence
152 1
Mnemonic Statement 3.5: The professional duty of confidence
153 1
Chart The use of confidential information
154 1
Mnemonic Due skill and care
155 1
Chart Enforcement mechanisms associated with ACCAs
Code of Ethics and Conduct
156 2

54

Contents 6 of 22
+
+

Chart Areas of controversy
158 1
Mnemonic Range of business services which an audit firms
portfolio could include
159 1
Mnemonic Whistle blowing
160 1
Chart Do we want the audit?
161 1
Chart The procedure for tendering and accepting a new
audit assignment
162 1
Chart Sources of information for client evaluation
163 1
Mnemonic Source of information about new clients
164 1
Mnemonic Client acceptance: Topics for discussion with
prospective client to help evaluate their background
165 1
Mnemonic The clients regulatory framework
166 1
Chart Client screening
167 1
Mnemonic Low risk clients
168 1
Mnemonic High risk clients
169 1
Mnemonic Client acceptance: Determine whether the audit firm
is able to meet ethical requirements regarding the
engagement review of existing auditor and audit-
team competence
170 1
Mnemonic Client acceptance: Determine whether the audit firm
is able to meet ethical requirements regarding the
engagement
171 1
Mnemonic Changes in professional appointments
172 1
Mnemonic Matters which may warrant the existing auditor
bringing to the attention of the prospective auditor
173 1
Mnemonic Issues to be considered before submitting a proposal
(tender) for the engagement
174 1
Mnemonic Tendering and obtaining audit work
175 1
Chart Client acceptance: Prepare the Client Proposal
176 1
Mnemonic Contents of an audit engagement letter
177 1
Chart Example: Audit Engagement Letter
178 2

55

Contents 7 of 22
+
+

Mnemonic Other matters that could be included in an
engagement letter
180 1
SECTION B: INTERNAL AUDIT
Chart Internal audit: Things you need to know.
182 1
Mnemonic The scope of the internal audit function
183 1
Chart The role of internal audit
184 1
Chart Internal audit and risk
185 1
Mnemonic Means of identifying risk
186 1
Mnemonic Main types of risk faced by business entities
187 1
Mnemonic Factors contributing to business risk
188 1
Mnemonic Considerations concerning entity objectives,
strategies and related business risks
189 1
Mnemonic External risks
190 1
Mnemonic Internal risks
191 1
Mnemonic Factors contributing to financial risk
192 1
Mnemonic Ways of identifying risk
193 1
Chart A risk management policy
194 1
Chart Dealing with risk (risk response)
195 1
Mnemonic Benefits of a risk policy
196 1
Chart The main process of Internal Audit when auditing
internal controls
197 1
Chart Internal audit assignments
198 1
Mnemonic Computer systems audits
199 1
Mnemonic Fraud risk factors
200 1

56

Contents 8 of 22
+
+

SECTION B: INTERNAL AUDIT
Chart Internal audit assignments Operational audits
201 3
Chart Value for Money
204 1
Mnemonic Value for Money audit coverage
205 1
Mnemonic The problems with Value for Money (VFM) audits
206 1
Chart Best Value
207 1
Mnemonic Benefits of internal audit
208 1
Mnemonic Potential limitations associated with internal audit
209 1
Mnemonic Minimising the limitations of internal audit
210 1
Mnemonic Reasons why management might be against
establishing an internal audit department
211 1
Mnemonic Increasing the effectiveness of internal auditors
212 1
Mnemonic The advantages of outsourcing the internal audit
function
213 1
Mnemonic The disadvantages of outsourcing the internal audit
function
214 1
Chart Differences between internal and external audit (a
second look just to remind us!)
215 1
Mnemonic External auditors using the work of internal auditors
216 1
Mnemonic The responsibility of the external (independent)
auditor when relying upon the work on internal
auditors
217 1
SECTION C: PLANNING AND RISK ASSESSMENT
Chart Audit process model
219 1
Chart So we have the audit
220 1
Mnemonic Objectives of planning audit work
221 1
Chart Typical audit planning procedures
222 2
Mnemonic Planning the audit: Perform audit tasks to understand
the entity and its environment
224 1
the entity and its environment The business
operations of the client
225 1

57

Contents 9 of 22
+
+

the entity and its environment Investments of the
client
226 1
the entity and its environment Financing and capital
structure
227 1
the entity and its environment Financial reporting
228 1
Chart Planning the audit: Perform audit tasks to understand
the entity and its environment Classification of
individual business risk
229 1
Chart Planning the audit: Evaluation of the clients internal
control
230 1
Chart Assessing the risks of material misstatement. What
you need to know
231 1
Chart Audit planning The role of Risk Assessment
232 1
Chart Audit risk: inherent risk, control risk and detection risk
233 1
Chart Components of audit risk
234 1
Chart Components of audit risk (another look!)
235 2
Chart Components of audit risk (a deeper look!)
237 1
Chart Components of audit risk example
238 1
Chart The risk approach to auditing
239 1
Chart Structure of the audit: 3 possible routes
240 1
Chart A business risk approach to auditing: Assessing
inherent risk
241 1
Mnemonic Inherent risk: Risks that require special audit
consideration
242 1
Chart Deciding materiality
243 3
Chart Tolerable error: reliability, precision and amount of
evidence
246 1
Chart Analytical procedures. What you need to know
247 1

58

Contents 10 of 22
+
+

Chart Appropriateness of analytical procedures
248 1
Mnemonic Analytical procedures
249 2
Mnemonic Analytical procedures: developing an expectation
251 1
Mnemonic Analytical procedures: plausible relationships
252 1
Mnemonic Analytical procedures: customary ratios
253 1
Mnemonic Analytical procedures: limitations
254 1
Chart Analytical procedures - Question
255 2
Chart Analytical procedures Answer to the question
257 5
Chart Analytical procedures: used at the planning stage
262 1
Mnemonic Analytical procedures: used at the planning stage
263 1
Chart Audit documentation. What you need to know
264 1
Mnemonic Audit working papers: ACCA Code of Ethics and
Conduct
265 1
Mnemonic Audit documentation and working papers
266 4
Mnemonic Significant findings or issues documented
270 1
Mnemonic The ways that documentation is useful for auditors
271 1
Mnemonic Audit working papers: Form and content of working
papers: The permanent audit file
272 1
Mnemonic Audit working papers: Form and content of working
papers: The current audit file
273 1
Mnemonic Audit working papers: Preparation of working papers
274 1
Mnemonic Audit working papers: Automated working papers
275 1
Chart Audit working papers: Schedules
276 1
Chart Summary of Audit Process Documents and the
people responsible for the documentation
277 1
Chart Using the work of other. What you need to know
278 1
Mnemonic Client acceptance: Determine the need for other
specialists
279 1
Mnemonic Client acceptance: Using the work of experts
280 1

59

Contents 11 of 22
+
+

Chart Using the work of an expert: Communicating,
evaluating and reporting
281 1
Chart Rules for using the work of an expert
282 1
SECTION D: INTERNAL CONTROL
Chart Internal control: The two dimensions
284 1
Chart The Up and Down effect
285 1
Chart Planning the audit: Assessing the risks of material
misstatements of the financial statements. Internal
control: What you need to know
286 1
Mnemonic Planning the audit: Assessing the risks of material
control structure
287 1
controls used to reduce risk
288 1
control: Administration controls
289 1
control: Social controls
290 1
control: Self imposed control
291 1
control: Control environment
292 1
control: Requirement for a strong control environment
293 1
control: Risk assessment
294 1
control: Employment of accounting information system
and communication
295 1
Mnemonic Planning the audit: Internal control
296 1

60

Contents- 12 of 22
+
+

control: Activities designed for control purposes
297 1
control: Physical controls over assets
298 1
control: Authorisation and approval controls
299 1
control: Segregation of duties controls
300 2
control: Segregation - authorisation
302 1
control: Segmentation - custody
303 1
control: Segregation - recording
304 1
control: Supervision controls
305 1
control: Arithmetic and accounting controls
306 1
control: Management controls
307 1
control: Organisational controls
308 1
control: Personnel controls
309 1

61

Contents- 13 of 22
+
+

control: Human resources management
310 1
control: Recruitment and selection (problems)
311 1
control: Recruitment and selection
312 1
control: Causes of high labour turnover in the
financial accounting system
313 1
control: Performance reviews
314 1
control: Computer-based systems
315 1
control: General controls used in IT systems
316 1
control: Software controls
317 1
control: Computer-based systems Continuity of
operations
318 1
control: Computer-based systems Main threats to
data security
319 1
control: Computer-based systems Back up
320 1
control: Computer-based systems - Access controls
321 1

62

Contents- 14 of 22
+
+

control: Computer-based systems Contingency
arrangements
322 1
control: Computer-based systems Concept of
disaster pack
322 1
Mnemonic General IT controls: Problems associated with web-
based technology: protecting against virus
323 1
Mnemonic General IT controls: Problems associated with web-
based technology: safety measures
324 1
Chart General IT controls: Security and its management
325 1
Chart IT Application controls: Input controls
326 1
Mnemonic IT Application controls: Output controls
327 1
control: Computer-based systems Audit trail
328 1
Chart The next step: Tests of control
329 1
Chart Down to work .!
330 1
Chart The process of auditing based on internal controls
331 1
Chart Understanding the system of internal controls
332 5
Chart Transaction cycles: Audit documentation of controls
337 1
Chart Flowcharting - Dont panic!
338 1
Chart Transaction cycles: Flowcharts
339 1
Chart Transaction cycles: Organisation chart: Assignment
of Authority and Responsibility
340 1
Chart Transaction cycles: Flowcharts Sales Orders
Processing (manual system)
341 5
Chart Transaction cycles: Flowcharts Sales Order
Processing (computer system)
346 3

63

Contents 15 of 22
+
+

Chart Transaction cycles: Flowcharts - Cash Receipts
(manual system)
349 5
Chart Transaction cycles: Flowcharts - Accounts Payable
Disbursements (manual system)
354 7
Chart Transaction cycles: Flowcharts Accounts Payable
Disbursements (computer system)
361 4
Chart Transaction cycles: Flowcharts Payroll (manual
system)
365 7
Chart Transaction cycles: Flowcharts Payroll (computer
system)
372 3
Chart Other transaction types
375 2
Chart Internal Control Questionnaire forms
377 2
Chart Tests of controls
379 1
Chart Tests of control: Sales system
380 6
Chart Tests of control: Purchasing system
386 6
Chart Tests of control: Payroll
392 6
Chart Cash system
398 7
Chart Inventory
405 3
Chart Capital expenditure
408 2
Chart Summary of the main areas of controls testing
410 1
SECTION E: AUDIT EVIDENCE
Chart Substantive procedures
412 1
Chart Substantive procedures. What you need to know
413 1
Chart Gathering evidence: Financial statements assertions
414 1
Chart Gathering evidence: Assertions tested by the auditor
415 1
Chart Procedures and approach: Substantive audit tests -
terms
416 1
Chart Gathering evidence: Sufficient and appropriate audit
evidence
417 1
Only the hyperlinks shaded in pink are active for this sample download

64

Contents 16 of 22
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+

Mnemonic Gathering evidence: Quality of evidence
418 1
Mnemonic Gathering evidence: Audit procedures for obtaining
audit information
419 1
Chart Gathering evidence: Audit procedures for obtaining
audit evidence
420 2
Mnemonic Exam tip
422 1
Mnemonic Gathering evidence: Substantive audit tests
423 1
Chart Gathering evidence: Confirmation. What you need to
know
424 1
Chart Gathering evidence: Confirmation method
425 5
Mnemonic Situations where negative confirmation may be
appropriate
429 1
Mnemonic Gathering evidence: Specific risks for which
confirmation may be relevant
430 1
Mnemonic Gathering evidence: Situations where confirmation
may not be appropriate
431 1
Mnemonic Gathering evidence: Problems associated with
confirmation
431 1
Chart Gathering evidence by sampling. What you need to
know
432 1
Chart Gathering evidence by sampling
433 1
Chart Gathering evidence by sampling: Three steps for
testing by using statistical sampling
434 1
Mnemonic Gathering evidence by sampling: Cases where audit
sampling is not appropriate
435 1
Chart Gathering evidence by sampling: Design of the
sample
436 6
Chart Gathering evidence by sampling: Selection of the
sample and using the sample
442 1
Chart Gathering evidence by sampling: Evaluation of tests
obtained
443 1
Chart Gathering evidence by sampling: Statistical sampling
techniques
444 2
Mnemonic Audit sampling: Advantages of statistical sampling
446 1

65

Contents 17 of 22
+
+

Mnemonic Disadvantages of statistical sampling
447 1
Chart Gathering evidence by sampling: A summary
448 1
Chart Managements accounting estimates
449 5
Chart Opening balances
454 4
Chart Audit objectives and substantive audit tests (in more
detail)
458 1
Chart Substantive audit tests: Bank and cash
459 1
Mnemonic Typical substantive audit procedures for bank and
cash
460 1
Mnemonic Main substantive audit procedures for bank and cash
461 1
Chart Substantive audit tests: Bank and cash (topics)
462 2
Chart Substantive audit tests: the Bank confirmation
procedure
464 1
Chart Substantive audit tests: typical bank confirmation
letter
465 2
Chart Substantive audit tests: the Cash count
467 2
Chart Substantive audit tests: Receivables
469 1
Chart Substantive audit tests: Confirmation of Receivables
470 2
Chart Substantive audit tests: Accounts receivable
confirmation letter
472 1
Chart Substantive audit tests: Reconciliation of Accounts
Receivable
473 1
Chart Substantive audit tests: Provision for bad debts
474 1
Chart Substantive audit tests: Inventory
475 1
Chart Substantive audit tests: Inventory (observation)
476 1
Chart Substantive audit tests: inventory count
477 1
Chart Substantive audit tests: inventory count after the
count
478 1

66

Contents 18 of 22
+
+

Chart Substantive audit tests: inventory the importance of
cut-off
478
1
Chart Substantive audit tests: inventory cost versus net
realisable value
478
1
Chart Substantive audit tests: Accounts payable
479
1
Chart Substantive audit tests: Confirmation of Payables
480
1
Chart Substantive audit tests: Payroll
481
1
Chart Substantive audit tests: Property, plant and equipment
(PP&E)
482
1
Chart Substantive audit tests: PP&E
483
1
Chart Substantive audit tests: Long-term debt
484
1
Chart Substantive audit tests: Long-term debt
485
1
Chart Substantive audit tests: Long-term debt: Test of
reasonableness schedule - debt
486
1
Chart Substantive audit tests: Shareholders equity
487
1
Chart Computer-assisted audit techniques (CAATs). What
you need to know
488
1
Chart Computer-assisted audit techniques (CAATs):
Computers used for different aspects of audit work
489
1
Mnemonic Computer-assisted audit techniques (CAATs): The
use of computers in auditing
490
1
use of computers in auditing (2)
491
1
Mnemonic Computer-assisted audit techniques (CAATs): Special
features of computer-based systems

492
1
Mnemonic Computer-assisted audit techniques (CAATs):
Auditing in a computer environment

493
1

67

Contents 19 of 22
+
+

Mnemonic Computer-assisted audit techniques (CAATs): Using
the computer to gather evidence Use of audit
software
494
1
Chart Computer-assisted audit techniques (CAATs): The
three main focus areas

495
1
Chart Computer-assisted audit techniques (CAATs): Main
types of CAATs
496
1
Chart Computer-assisted audit techniques (CAATs): Other
types of CAATs
497
1
advantages of CAATs to the auditor
498
1
Difficulties of using CAATs
499
1
Problems associated with small computer systems
500
1
Chart Computer-assisted audit techniques (CAATs):
Computer software used by auditors
501
1
auditors consideration of internal control when a
computer is present in the audit area
502
1
Information and communications technology (ICT)
provide advantages for the accounting function
503
1
Chart Not-for-Profit organisations. What you need to know
504
1
Chart Not-for-profit organisations
505
4
Chart Audit report in accordance with a compliance
framework
508
2
Mnemonic Audit problems associated with charities and other
small entities
511
1
Chart Internal Control Questionnaire: Small Entity
512
4

68

Contents 20 of 22
+
+

SECTION F: REVIEW
Chart The Final Review Stage
517 1
Chart At last . The reports!
518 1
Chart Subsequent events. What you need to know
519 1
Chart Subsequent events
520 6
Mnemonic Events occurring between the date of the financial
statements and the date of the auditors report
526 1
Mnemonic Enquiries of management and, where appropriate
those charged with governance, as to whether any
subsequent events have occurred that might affect
the financial statements
527 1
Chart Review for discovery of Subsequent Events
528 1
Chart Going concern. What you need to know
529 1
Chart Going concern: Indications that the Going Concern
assumption might be questioned
530 5
Chart The Going concern assumption
535 1
Mnemonic Implications that the going concern assumption might
be questioned: Financial implications
536 1
be questioned: Operating implications
537 1
be questioned: Other implications
538 1
Mnemonic Going concern assumption The auditors
responsibilities
539 1
Mnemonic Going concern assumption Procedures to gather
sufficient appropriate audit evidence
540 1
Chart Management representations. What you need to
know
541 1
Chart Management representations
542 5
Mnemonic Management Representations Letter
547 1
Chart Example: Management Representations Letter
548 3

69

Contents 21 of 22
+
+

SECTION F: REVIEW
Chart Audit finalisation and the final review
551 1
Chart Matters for the Attention of Partners (MAPs)
552 1
SECTION G: REPORTING
Chart Now we are able to produce appropriate audit reports
554 1
Chart Audit reports. What you need to know
555 1
Chart Audit reports
556 7
Chart Audit reports Unqualified Report
563 2
Chart Audit reporting
565 1
Mnemonic The statutory audit opinion
566 1
Chart Modifications to the audit report. What you need to
know
567 1
Chart Modifications to the audit report
568 3
Chart The audit report: Unqualified Opinion with Going
Concern emphasis of matter paragraph
570 2
Chart The audit report: Unqualified opinion with legal
uncertainty emphasis of matter paragraph
572 2
Chart The audit report: Limitation on Scope Qualified
opinion
575 2
Chart The audit report: Disagreement on accounting policies
inappropriate accounting method qualified opinion
577 2
Chart The audit report: Limitation on Scope Disclaimer of
opinion
579 2
Chart The audit report: Disagreement on accounting policies
inadequate disclosure adverse opinion
581
Chart Circumstance that may result in other than an
unqualified opinion: Limitation on scope
583 3
Chart Circumstance that may result in other than an
unqualified opinion: Disagreement with management

586 2

70

Contents 22 of 22
+
+

SECTION G: REPORTING
Chart Summary of the different forms of Auditors Report
588 3
Chart Audit reporting - overview
591 1
Chart Private reporting to the clients management. What
you need to know.
592 1
Chart Private reporting: to the clients management
593 2
Chart Reports to the management by the external auditor:
The Management Letter
595 2
Chart Example: Management Letter
597 6
Charts Fraud and fraudulent behaviour
766
7
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Mnemonics and Charts ACCA Paper F8: Audit and Assurance (International)

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