Table Of ContentAudit & Assurance
(AAA) 122
Candidate Study Guide
January 2022
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Dear Candidate,
Welcome to the Audit & Assurance (AAA) module of the Chartered Accountants Program. On
completion of this module you will be one step closer to becoming a Chartered Accountant.
Inside this pack you will find your Candidate Study Guide (CSG), which includes the core content
for each unit. The Module Outline directs you to the key resources available to you, both within this
printed CSG and online through myLearning.
Candidate feedback is vital to the continuous improvement and success of the Chartered Accountants
Program, and each term we reflect carefully on candidate feedback. One exciting outcome of this
feedback is the transition from the current Chartered Accountants Program to the new Chartered
Accountants Program commenced in June 2021. Further information regarding the new Chartered
Accountants Program can be found on our website at https://www.charteredaccountantsanz.
com/become-a-member/new-ca-program and candidate transition information can be found via
myLearning > Chartered Accountants Program > Candidate transition information.
We are committed to supporting you in your studies this term. So we encourage you to be active via
myLearning and communicate with each other and the module team on a regular basis online. Further
study resources, services and strategies can be found in the Audit & Assurance (1) 2022 and the
Chartered Accountants Program spaces in myLearning.
Above all, work hard to achieve the exam results you want and to set yourself up for a successful
career as a Chartered Accountant.
Yours faithfully,
Robyn Le Grew FCA
Senior Teaching CA
charteredaccountantsanz.com
Contents
Introduction i
Module outline iii
Unit 1: Assurance framework 1-1
Unit 2: Audit quality and pre-engagement activities 2-1
Unit 3: Risk assessment 3-1
Unit 4: Internal control 4-1
Unit 5: Materiality, audit strategy and audit plan 5-1
Unit 6: Tests of controls 6-1
Unit 7: Substantive testing 7-1
Unit 8: Using the work of others 8-1
Unit 9: Completing the audit 9-1
Unit 10: Auditor’s reports 10-1
Unit 11: Other audits of historical financial information and review engagements 11-1
Unit 12: Other engagements 12-1
Unit 13: Case study 13-1
Chartered Accountants Program Audit & Assurance
Introduction
Welcome to the Audit & Assurance (AAA) module. This module will provide you with the
opportunity to understand key concepts and to practise applying your understanding to a
variety of practical scenarios.
Learning model
The Chartered Accountants Program (the Program) material has been constructed applying the
learning principles of ‘tell, show, do’ to learning outcomes devised for each unit. Each unit is
made up, primarily, of core content, worked examples, activities and a unit quiz.
TELL SHOW DO
+ +
Tell me the relevant Show me how to Can I do the task
theory do the task unassisted?
How the material is constructed
The material is delivered in two modes:
1. The Candidate Study Guide – this print pack.
2. myLearning – our online environment.
Where do I start?
• The module outline (included in this pack).
• The module plan (included in the module outline), to help structure your studies.
• The other module orientation materials (available in myLearning), to introduce you to the
AAA module and myLearning.
• Past papers (available in myLearning), to understand how topics are addressed in exams.
It is best to work through the Candidate Study Guide (CSG) units in order. The CSG provides
the ‘Tell’ part of your learning, giving core principles and basic examples. The CSG also directs
you to required readings and online learning materials, which are an essential part of your
studies in AAA.
Good luck!
The Chartered Accountants Program is challenging. It is designed to be the best educational
product it can be for you, the future practitioners in this profession. As it constantly evolves,
Chartered Accountants Australia and New Zealand will continue to seek your feedback to
ensure the Program meets the learner’s needs now and for future development.
We hope you find your journey through the Program a rewarding and enjoyable experience,
and encourage you to work steadily through the material. If you require further assistance, post
your questions on the discussion forum.
Finally, best of luck with your studies. We look forward to connecting with you online on the
discussion forum.
Robyn Le Grew
Senior Teaching CA
Introduction Page i
Chartered Accountants Program Audit & Assurance
Module outline
Overview
The Audit and Assurance (AAA) module examines and applies the relevant Auditing, Assurance
and Ethics Standards to various scenarios. It is practical in nature with candidates required
to apply the Standards to different scenarios, including a comprehensive case study which
integrates Units 1 through 10 and a case study which integrates Units 1, 11 and 12.
The AAA module is one of the five (5) compulsory modules in the Chartered Accountants
Program.
How is the AAA module taught?
The AAA module is 12 weeks in duration plus a one-week study break. It offers flexible
learning options with the delivery of materials online through myLearning, which is accessible
after candidates enrol in the module.
Assumed knowledge
It is essential for candidates to have a basic understanding of accounting systems and the
recording of transactions in order to understand the audit of general purpose financial statements.
Without this knowledge, it would be very difficult for candidates to understand the fundamental
auditing concepts.
It is assumed that candidates would have a good understanding of the following concepts from
their undergraduate studies:
• Financial accounting and preparation of general purpose financial statements (refer to the
Financial Accounting & Reporting module’s assumed knowledge). It is assumed that you
would have a basic understanding of International Financial Reporting Standards (IFRSs)
or national equivalents.
• Standard business processes, and how they are recorded in the relevant accounting system
and reflected in the financial statements, including the following:
– Sales – how a sale/revenue and the related trade receivable is recorded in an entity’s
accounting system, either directly or via a subsidiary ledger.
– Payroll – how components of payroll are recorded by an entity (e.g. gross salary,
superannuation/pension contributions, workers’ compensation payments/insurance, tax
deductions and payments).
– Purchases – how the purchase of a good or service is recorded in an entity’s accounting
system, either directly or via a subsidiary ledger.
– Inventory – how items purchased for manufacture or resale by an entity go through the
entity’s inventory and COGS (cost of goods sold) accounts.
– Asset management (property, plant and equipment/intangible assets) – how these items
are recorded by an entity and how associated depreciation/amortisation/impairment
is recorded.
• The role of an auditor, the objectives of an audit of general purpose financial statements,
and the auditor’s professional, ethical and legal responsibilities.
• The need for the auditor to obtain an understanding of the entity and its environment,
assess audit risk and determine materiality.
• The key components of the audit process, the broad categories of audit procedures (tests of
control and substantive procedures) for obtaining sufficient appropriate audit evidence to
support audit assertions.
Introduction Page iii
Audit & Assurance Chartered Accountants Program
• The types of audit opinions.
• The difference between audit review and other assurance engagements. It is assumed that
you would have a basic understanding of:
– International Standards on Auditing (ISAs) or national equivalents.
– International Code of Ethics for Professional Accountants including International
Independence Standards or national equivalents.
Suggested module plan and time allocation
The expected workload for this module is a minimum of 10 hours per week over 12 weeks, or
120 hours in total, excluding module orientation, online assessments, final exam and study time
for the final exam. Candidates are advised to plan their enrolment carefully around work and
other commitments, to ensure they are able to devote the time required to their studies.
The suggested module plan with key dates for AAA122 is provided below. It is also available
on myLearning.
Page iv Introduction
