AUDITING THEORY & PROBLEMS Syllabus (October 2019 CPA Board Exam)

AUDITING
The auditing exam tests the examinee's knowledge of the auditing principles and
concepts and the practical application of these principles and concepts.

New auditing standards and other issuance are included in the exam if these are in
effect for at least 6 months at the date of the exam.

The Auditing exam is a 3-hour exam. It consists of 70 multiple choice questions.

The exam is divided into two sections: Auditing Theory and Auditing problems

AUDITING THEORY (50%)

This section covers the candidates' conceptual knowledge and understanding of
assurance and related services performed by professional accountants. The Philippine
Standards on Auditing (PSA) and other regulatory laws and regulations in effect at the
time of examination are applied in all areas of the exam.

 Fundamentals of Auditing and Assurance Services

o APPLICABLE STANDARDS
 Glossary of Terms (December 2002)
 IAASB – Interim Terms of Reference (August 2004); Philippine
Framework for Assurance Engagement
 Preface to International Standards and Philippine Standards
 PSA 120 - Framework of Philippine Standards on Auditing
 The Financial Statements Audit - Client Acceptance, Audit Planning,
Supervision and Monitoring
o APPLICABLE STANDARDS:
 PSA 200 (Revised and Redrafted)
 PSA 210 (Redrafted)
 PSA 300 (Redrafted)
 PSA 240 (Redrafted)
 PSA 250 (Redrafted)
 PSA 260 (Redrafted)
 PSA 610 (Redrafted)
 PSA 620 (Revised and Redrafted)
 Understanding the Entity and its Environment Including its Internal
Control and Assessing the Risks of Material Misstatement
o APPLICABLE STANDARDS:
 PSA 260 (Revised and Redrafted)
 PSA 265 (New)
 PSA 315 (Redrafted)
 PSA 320 (Revised and Redrafted)
 Audit Objectives, Procedures, Evidences and Documentation
o APPLICABLE STANDARDS:
  PSA 230 (Redrafted)
 PSA 330 (Redrafted)
 PSA 500 (Redrafted)
 PSA 501 (Redrafted)
 PSA 505 (Revised and Redrafted)
 PSA 510 (Redrafted)
 PSA 520 (Redrafted)
 PSA 530 (Redrafted)
 PSA 540 (Revised and Redrafted)
 PSA 550 (Revised and Redrafted)
 Completing the Audit/ Post-Audit Responsibilities
o APPLICABLE STANDARDS:
 PSA 560 (Redrafted)
 PSA 570 (Redrafted)
 PSA 580 (Revised and Redrafted)
 Reports on Audited Financial Statements
o APPLICABLE STANDARDS:
 PSA 700 (Redrafted)
 PSA 705 (Revised and Redrafted)
 PSA 706 (Revised and Redrafted)
 PSA 710 (Redrafted)
 PSA 720 (Redrafted)
 PSA 800 (Revised and Redrafted)
 PSA 805 (Revised and Redrafted)
 PSA 810 (Revised and Redrafted)
 Auditing in a Computerized Information Systems (CIS) Environment
o APPLICABLE STANDARDS:
 PSA 402 (Revised and Redrafted)
 Other Assurance and Non-assurance Services
o APPLICABLE STANDARDS:
 PSA 220 (Revised and Redrafted)

AUDITING PROBLEM (50%)

This section tests the examinee's proficiency in applying auditing standards,
techniques, and procedures to a typical independent audit of a medium-sized service,
trading or manufacturing concern. The examinee must be able to plan and perform an
audit, analyze data for possible errors and irregularities, formulate adjusting entries,
resolve audit issues, prepare audit working papers and complete the audit including
the preparation of the audit report.

Evidence Accumulation and Evaluation – Substantive Tests of Transactions and

Balances

Audit of the revenue and receipt cycle

  Audit of sales and revenue transactions
 Audit of receivable balances

Audit of expenditure and disbursement cycle

 Audit of acquisitions and purchases

 Audit of payroll transactions
 Audit of inventory balances
 Audit of trade payable balances
 Audit of prepaid expenses and accrued liabilities

Audit of production cycle

 Audit of conversion activities

 Audit of inventory balances: work-in-process and finished goods
 Audit of cost of goods sold balance

Audit of the financing cycle

 Audit of financing cycle transactions

 Audit of non-trade liability balances
 Audit of interest expense and finance cost balances
 Audit of equity accounts
 Audit of investing cycle

Audit of the financing cycle

 Audit of investing transactions

 Audit of investment account balances
 Audit of property, plant and equipment account balances
 Audit of intangible account balances

Audit of cash balances

 Audit of cash receipt transactions balance

 Audit of cash disbursement transactions balance