CIPFA
DIPLOMA
MANAGEMENT
IN
INTERNATIONAL
PUBLIC
FINANCIAL
MODULE SYLLABUS: AUDIT AND ASSURANCE
1.
MODULE PROFILE
Audit and Assurance (AA) is one of four modules comprising the CIPFA Diploma in
International Public Financial Management (Dip IPFM). This is the second qualification
in CIPFA’s integrated suite of qualifications, the other qualifications being:
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Certificate in International Public Financial Management (Cert IPFM),
comprising three Certificate stage modules
Advanced Diploma in International Public Financial Management (Adv Dip
IPFM), comprising four Advanced Diploma stage modules
Professional Qualification in International Public Financial Management (PQ
IPFM), comprising two Strategic stage modules
AA is designed to provide candidates with the necessary knowledge, understanding
and skills to perform internal and external auditing within the public services.
The module focuses on both the theoretical and practical aspects of auditing and is
designed to assess the ability of candidates to perform audit work and prepare high
quality audit documentation.
The module outcomes are based on the requirements of the International Standards
of Supreme Audit Institutions (ISSAIs), the requirements of the Institute of Internal
Auditors and the tasks found in typical audit job descriptions within public sector
organisations.
2.
LINKAGES
Auditing knowledge and skills are applicable throughout organisations and
consequently audit is linked to all other parts of the syllabus. There are particularly
strong linkages in respect of the Financial Accounting module in the Cert IPFM.
© Chartered Institute of Public Finance and Accountancy
3.
OVERALL AIMS
On completion of this module, the successful candidate will be able to:
A) Identify the scope and legal, regulatory and ethical
environment within which audits are performed
(20%)
B) Demonstrate an understanding of the risk assessment and
planning procedures required by internal and external
auditing standards
(20%)
C) Prepare audit working papers documenting the testing
performed to obtain sufficient appropriate audit evidence
(20%)
D) Use audit evidence gathered to form an audit opinion
(10%)
E) Prepare working papers documenting audit finalisation
procedures performed
(10%)
F) Explain the role of internal audit and perform internal audit
tasks
(20%)
2014 - Dip IPFM AA syllabus 1.0
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4.
LEARNING OUTCOMES
OVERALL AIM A
Identify the scope and legal, regulatory and ethical environment within
which audits are performed.
LEARNING OUTCOMES
The successful candidate will be able to:
A1)
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Explain the legal and related provisions relating to audits in the public
sector:
General requirements relating to the provision of internal and external audit
services
Fair presentation and the nature of audit reports
Auditor’s rights and duties
Auditor’s liability including criminal liability and liability to third parties
Impact of International Standards on Auditing (ISA) on internal and external
audit work
The role of The International Organisation of Supreme Audit Institutions
(INTOSAI).
A2)
Explain the scope of internal and external audits:
Basic tenets and concepts of internal and external audit work
Power and authority available to internal and external auditors
Concepts of independence and objectivity, and customer focus
Materiality.
A3)
Explain the importance of ethical behaviour and the requirements of
applicable standards:
Ethical and legal principles which relate to auditor behaviour
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A4)
Apply the INTOSAI quality control requirements for an audit.
A5)
Briefly discuss the impact of governance requirements on the
performance of public services audits:
Objectives and enforcement of corporate governance
Structure and role of an Audit Committee
Contribution of internal and external auditors to corporate governance, in
particular through their relationship with the Audit Committee
The role of the Auditor General
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2014 - Dip IPFM AA syllabus 1.0
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OVERALL AIM B
Demonstrate an understanding of the risk assessment and planning
procedures required by external auditing standards and recognised best
internal audit practice.
LEARNING OUTCOMES
The successful candidate will be able to:
B1)
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B2)
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B3)
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Explain the audit assurance model underpinning the ISSAI approach
to the conduct of audits:
Definition of audit risk
Importance of professional scepticism
Role of professional judgement
Identification of potential misstatements
Determining combined assessment of risk of material misstatement.
Identify and assess the information required for the risk assessment
process
Understanding of the organisation and its control environment
Fraud risks, management’s anti-fraud risk assessment procedures and the
related internal controls established
Systems descriptions and evaluation of the design and implementation of
internal controls
Preliminary analytical procedures
Matters arising from audit team meeting proceedings
Using the work of internal auditors.
Identify audit risks and their implications using the information
contained in B2 above:
Identification of risk at the financial statement or entity level
Identification of risk at the assertion or key process level
Determination of potential misstatements in respect of each assertion or key
process
Nature of significant risk and required audit responses
Setting of planning and performance materiality.
2014 - Dip IPFM AA syllabus 1.0
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OVERALL AIM C
Prepare audit working papers documenting the testing performed to obtain
sufficient appropriate audit evidence.
LEARNING OUTCOMES
The successful candidate will be able to:
C1)
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C2)
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C3)
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Identify and document an overall audit response to address assessed
risks at both the financial statement level and the assertion level:
Use of experienced staff
Enhanced supervision
Changes in nature, timing and extent of audit tests
Considerations regarding the control environment
Focus on potential misstatements or key control weaknesses
Recognition of need for controls testing
Role of substantive testing
Use of a combined testing approach.
Prepare audit programmes, carry out audit tests and prepare audit
working papers:
Tests of internal controls
Substantive analytical procedures
Substantive tests of detail.
Explain the role of audit in an IT environment in relation to selecting
and evaluating audit evidence:
Risks of auditing in an IT environment
Guidance available on IT security and related issues
Reliance on embedded controls
Specialist software for sample selection and testing
Practical problems of identifying and downloading computerised records for
audit testing.
2014 - Dip IPFM AA syllabus 1.0
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OVERALL AIM D
Use audit evidence gathered to form an audit opinion:
LEARNING OUTCOMES
The successful candidate will be able to:
D1)
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D2)
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Comment on the sufficiency and appropriateness of audit evidence
obtained:
Relevance and reliability
Importance of obtaining written representations
Approach to corroborating and conflicting evidence
Response to insufficient evidence
Use of audit sampling.
Discuss the issues that an auditor would consider when assessing
whether unadjusted material misstatements or control weaknesses
are material, individually or in aggregate:
The size and nature of misstatements
The nature of control weaknesses
Communications with management and those charged with governance
Protocols for correction of errors or addressing control weaknesses
OVERALL AIM E
Prepare working
performed:
papers
documenting
audit
finalisation
procedures
LEARNING OUTCOMES
The successful candidate will be able to:
E1)
Identify audit finalisation procedures:
Final analytical procedures
Subsequent events review
Going concern review.
E2)
Explain best practice in the audit close down process and audit
reporting including:
Communication within the audit function
Audit opinion on financial statements.
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2014 - Dip IPFM AA syllabus 1.0
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Applicable to exams: June and December 2014
OVERALL AIM F
Explain the role of internal audit and perform internal audit tasks.
LEARNING OUTCOMES
The candidate will be able to:
F1)
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F2)
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Explain the scope and contribution of internal audit work to an
organisation:
Scope of internal audit activity within the public services and the private
sector
Role of internal audit as a contributor to the management of an organisation
The impact of regulatory and professional frameworks, including IIA
standards, on the conduct of internal audit
Ethics relating to internal audit work including independence, objectivity and
whistle blowing
Internal audit reports
Demonstrate internal audit techniques used in the review of internal
control and explain the contribution of specialist internal audit
engagements
Internal audit of internal control
Contract audit
Fraud investigations
Internal performance reviews.
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6.
EXAMINABLE STANDARDS
NB: The following table is intended to provide a general indication only of the extent
to which knowledge and application of each standard may be tested in the Audit and
Assurance examination. Syllabus guidelines, learning materials and the specimen
examination paper will provide further detail on the specific aspects of each standard
that candidates should focus their attention on and the style of examination question
that they are likely to encounter.
EXAMINATION STATUS OF INTERNATIONAL STANDARDS OF SUPREME
AUDIT INSTITUTIONS (ISSAIs)
Audit and
Assurance at level
ISSAI
A
B
C
Prerequisites for the functioning of SAIs
30
Code of ethics
40
Quality control for SAIs
X
X
General auditing guidelines on financial audit
1000
General introduction to the INTOSAI financial audit
guidelines
1003
Glossary to financial audit guidelines
1200
Overall objectives of the independent auditor and the
conduct of an audit in accordance with International
Standards on Auditing
X
1210
Agreeing the terms of audit engagements
Not examinable
1220
Quality control for an audit of financial statements
X
1230
Audit documentation
X
1240
The auditor’s responsibilities relating to fraud in an
audit of financial statements
1250
Consideration of laws and regulations in an audit of
financial statements
1260
Communication with those charged with governance
X
1265
Communicating deficiencies in internal control to
those charged with governance and management
X
1300
Planning an audit of financial statements
X
1315
Identifying and assessing the risks of material
misstatement through understanding the entity and
its environment
X
2014 - Dip IPFM AA syllabus 1.0
Not examinable
X
X
X
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1320
Materiality in planning and performing an audit
X
1330
The auditor’s responses to assessed risks
X
1402
Audit considerations relating to an entity using a
service organization
1450
Evaluation of misstatements identified during the
audit
X
1500
Audit evidence
X
1501
Audit evidence – specific consideration for selected
items
X
1505
External confirmations
X
1510
Initial audit engagements – opening balances
1520
Analytical procedures
1530
Audit sampling
1540
Auditing accounting estimates, including fair value
accounting estimates, and related disclosures
1550
Related parties
X
1560
Subsequent events
X
1570
Going concern
X
1580
Written representations
X
1600
Special considerations – audits of group financial
statements (including the work of component
auditors)
Not examinable
1610
Using the work of internal auditors
X
1620
Using the work of an auditor’s expert
1700
Forming an opinion and reporting on financial
statements
X
1705
Modifications to the opinion in the independent
auditor’s report
X
1706
Emphasis of matter paragraphs and other matter
paragraphs in the independent auditor’s report
X
1710
Comparative information – corresponding figures and
comparative financial statements
X
1720
The auditor’s responsibilities relating to other
information in documents containing audited financial
statements
Not examinable
Special considerations – audits of financial statements
prepared in accordance with special purpose
frameworks
Not examinable
1800
2014 - Dip IPFM AA syllabus 1.0
X
X
X
X
X
X
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1805
1810
Special considerations – audits of single financial
statements and specific elements, accounts or items
of a financial statement
Not examinable
Engagements to report on summary financial
statements
Not examinable
General Auditing Guidelines on Performance Audit
3000
Implementation guidelines for performance auditing
3100
Performance audit guidelines: key principles appendix
X
X
General Auditing Guidelines on Compliance Audit
4000
General introduction to guidelines on compliance audit
4100
Compliance audit guidelines for audits performed
separately from the audit of financial statements
X
4200
Compliance audit guidelines related to audit of
financial statements
X
X
Levels of knowledge required for the examination
Level A: A thorough knowledge with a solid understanding of the subject matter and
some experience in its application in practice sufficient to: exercise reasonable
professional judgement in the application of the subject matter in those
circumstances generally encountered in practice; and recognise when the assistance
of a specialist may be required. This level of knowledge is lower than that of a
specialist.
Level B: A working knowledge with a broad understanding of the subject matter and
a modicum of experience in its application sufficient to: apply the subject matter in
straightforward circumstances; and identify issues requiring professional attention in
more complex situations.
Level C: a general knowledge with a basic understanding of the subject matter and
training in its application sufficient to: identify significant issues; evaluate their
potential implications or impact; and recognise that additional work or advice may be
required to be performed by a person technically competent in this area of expertise.
This level of knowledge is significantly greater than that of a layperson.
[END OF SYLLABUS]
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