The overall objective of this segment is to provide a body of knowledge to help candidates appreciate the nature and diversity of auditing and assurance services. It presents an overview of the audit and assurance process and examines the objectives of assurance engagements and the environment within which the auditor or assurance practitioner operates.

Throughout the Assurance Services and Auditing segment, extensive usage is made of the CPA Australia Members' Handbook and there are also many references to the Corporations Act 2001 (Cwlth).

Specifically the segment aims to:

• develop your understanding of the Framework for Assurance Engagements and the international framework for assurance services
• enable you to apply the Framework for Assurance Engagements in financial report audits and assurance services
• describe the professional, legislative and regulatory requirements pertaining to the statutory audits of financial reports following various corporate collapses, in particular the initiatives to combat audit risk through the revised auditing standards (ASA 240, ASA 315 and ASA 330)
• analyse and illustrate the complete audit process comprising the planning, evidence gathering and reporting stages including how the IT environment impacts on all aspects of the audit process
• analyse in detail, via a case study, the key issues surrounding the auditor’s responsibility to consider fraud in an audit of a financial report
• explain the nature of performance audits
• discuss the nature of assurance engagements other than audits or reviews of historical financial information; such as assurance on prospective financial information, non-financial information, systems and processes, behaviour and corporate governance
• discuss the nature of internal audit

The content of the Assurance Services and Auditing segment is as follows:

Module 1: Assurance services framework

• types of assurance engagements
• definitions and objectives of an assurance engagement
• using the assurance framework: financial statements audit
• public sector perspective
• audit judgment
• establishing criteria
• code of ethics for professional accountants
• quality controls for firms

Module 2: From engagement acceptance to communicating with those charged with governance

• ASA 200 Objectives and general principles governing an audit of a financial report
• ASA 210 Terms of audit engagements
• ASA 220 Quality control for audits of historical financial information
• ASA 230 Audit documentation
• ASA 240 Auditor's responsibility to consider fraud in an audit of a financial report
• ASA 260 Communication of audit matters with those charged with governance

Module 3: Understanding the entity and assessing risk

• overview of standards covering 'risk assessment and response to assessed risks'
• understanding the entity and its environment and accesssing the risk of material mistatement
• the strategic systems approach to auditing
• techniques used in strategic analysis
• analytical procedures
• internal control

Module 4: The auditor's response to assessed risks

• responding to assessed risks 
• sufficient appropriate audit evidence
• tests of control
• substantive audit procedures
• audit procedures for assessing going concern issues
• other auditors and experts
• evidence-gathering in an e-commerce environment
• audit of small businesses
• subsequent events
• completion

Module 5: Reporting requirements

• reports associated with reasonable assurance engagements
• reporting responsibilities for financial report audits
• financial report audit
• types of auditor's reports
• circumstances that may result in an opinion other than unqualified audit option
• materiality and pervasiveness
• auditor's report on financial information other than a general purpose financial report
• components of a financial report
• auditor's report on concise financial reports
• reports providing limited assurance
• reports providing no assurance

Module 6: The auditor's responsibility to consider fraud in an audit of a financial report

• fraud defined
• responsibilities of those charged with governance and of management 
• auditor's responsibilities for detecting material misstatements due to fraud 
• engagement team communications 
• risk assessment procedures 
• identification and assessment of the risks of material misstatement due to fraud 
• response to risks of material misstatement due to fraud
• management representations 
• communication with management and those charged with governance
• auditor unable to continue the engagement
• reports providing limited assurance

Module 7: The auditor's responsibility to consider going concern in an audit of a financial report

• what is going concern assumption?
• responsibilities of those charged with governance and of management
• auditor's responsibilites
• planning the audit and performing risk assessment procedures
• response to assessed risks, which cast significant doubt on the entity's ability to continue operating as a going concern
• audit conclusion and reporting
• communicating with those charged with governance
• other reporting considerations

Module 8: Performance audits

• background
• definition of performance audits
• understanding performance audits
• accountability and audit
• independence
• policy issues
• how performance audits are selected
• examples of performance audits
• economy, efficiency and effectiveness
• audit criteria
• audit considerations
• techniques for examining economy, efficiency and effectiveness
• performance indicators
• the performance audit process
• performance audit of the auditor-general 

Module 9: Other assurance services and internal audit

• the nature and characteristics of assurance services
• a survey of assurance services currently being provided
• assurance on prospective financial information
• assurance on non-financial information
• assurance on systems and processes
• assurance on behaviour
• continuous auditing
• core competencies for potential assurance services
• internal audit