This subject covers the candidates’ knowledge of the principles and concepts of auditing and

attestation and the practical application of these principles and concepts. There shall be two
parts of this subject: Theory on Auditing and Attestation Services and Auditing Practice.

This part covers the candidates’ conceptual knowledge and understanding of auditing and
attestation services performed by professional accountants. Candidates should know and
understand auditing and attestation services, with emphasis to: independent audits of financial
statements or against related standards, assertions or applicable criteria; professional, ethical,
quality management and governance responsibilities; the use of risk-based audit process in
planning, responding to risks and reporting thereon.
In all the areas included, the candidate shall apply the appropriate standards on auditing and
attestation, quality management, ethical and governance standards, and other regulatory laws
and regulations, issued by Philippine and professional standard-setting and regulatory bodies in
effect at the time of examination.

This part covers the candidate’s proficiency in applying risk-based audit and quality management
standards, techniques, and procedures to a typical independent audit of a medium-sized service,
trading or manufacturing concern, that use either a manual or automated business process, or a
combination of both.
Candidates shall be able to assess risk, develop a plan and perform an audit, analyze data for
possible errors and irregularities or nonconformance to standards, assertions or criteria, perform
root cause analysis, perform other procedures, obtain evidence and formulate adjusting entries,
prepare audit working papers, communicate results of audit, prepare audit reports, and complete
the audit.
In all the areas included, the candidate shall apply the appropriate standards on auditing and
attestation, quality management, ethical and governance standards, and other regulatory laws
and regulations, issued by Philippine and professional standard-setting and regulatory bodies in
effect at the time of examination.
Candidates should be able to demonstrate awareness- or proficient-level knowledge of the
competencies cited above. Entry level professional accountants should be able to address the
fundamental requirements of the various parties that the candidates will be interacting
professionally in the future.
The candidates must also be able to communicate effectively such matters pertaining to the audit
work.
New laws, standards and other issuances which are effective as of the date of the examination
shall supersede the related topic listed in the syllabus and will be included in the examination,
unless there is an advisory from the Board of Accountancy to the contrary.
The examination shall have seventy (70) multiple choice questions.
The syllabus for the subject is presented below.

1.1 Fundamentals of Auditing and Assurance Services

1.1.1 Introduction to assurance engagements
1.1.1.1 Nature, objective and elements
1.1.1.2 Types of assurance engagements (audits, reviews,
other assurance engagements
1.1.2 Introduction to auditing
1.1.2.1 Nature, philosophy, and objectives
 1.1.2.2 Types of audit
1.1.2.2.1 According to nature of assertion/data
(financial statements audit, operational audit,
and compliance audit)
1.1.2.2.2 According to types of auditor (external
independent financial statements audit,
internal audit, and government audit)
1.2 The Risk-based Financial Statement Audit – Client Acceptance, Audit
Planning, Supervision and Monitoring
1.2.1 Overview of the risk-based audit process
1.2.2 Pre-engagement procedures
1.2.3 Scope and purposes of audit planning
1.2.3.1 Essential planning requirements
1.2.3.1.1 Knowledge of the business
1.2.3.1.2 Preliminary analytical procedures
1.2.3.1.3 Materiality
1.2.3.1.4 Assessing and managing audit risks
1.2.3.1.5 Overall audit plan and audit program (experts, internal
auditor, other independent auditors)
1.2.4 Direction, supervision and review
1.3 Understanding the Entity and its Environment including its Internal Control
and Assessing the Risks of Material Misstatement
1.3.1 Industry, regulatory and other external factors, including the
applicable financial reporting framework
1.3.1.1 Nature of the entity
1.3.1.2 Objectives and strategies and related business risks
1.3.1.3 Measurement and review of the entity’s financial performance
1.3.2 Internal Control
1.3.2.1 Basic concepts and elements of internal control
1.3.2.2 Consideration of accounting and internal control systems
1.3.2.2.1 Understanding and documentation
1.3.2.2.2 Assessment of control risks
1.3.2.2.2.1 Test of controls
1.3.2.2.2.2 Documentation
1.3.3 Assessing the risks of material misstatement
1.3.3.1 Fraud and errors
1.3.3.2 Risk assessment procedures
1.3.3.3 Discussion among the engagement team
1.3.3.4 Significant risks that require special audit consideration
1.3.3.5 Risks for which substantive procedures alone do not provide
sufficient appropriate audit evidence
1.3.3.6 Revision of risk assessment
1.3.4 Communicating with those charged with governance and management
1.4 Audit Objectives, Procedures, Evidences and Documentation
1.4.1 Nature and significance
1.4.2 Evidential matters
1.4.3 Audit procedures/techniques, including audit selection
1.4.4 Audit working papers
1.5 Completing the Audit/Post-Audit Responsibilities
1.5.1 Completing the audit and audit report preparation
1.5.1.1 Analytical procedures for overall review
1.5.1.2 Related party transactions
1.5.1.3 Subsequent events review
1.5.1.4 Assessment of ongoing concern assumption
1.5.1.5 Obtaining client’s representation letter
1.5.1.6 Evaluating findings, formulating an opinion and drafting the audit
report
1.5.2 Post-audit responsibilities
1.5.2.1 Subsequent discovery of facts
1.5.2.2 Subsequent discovery of omitted procedures
1.6 Reports on Audited Financial Statements
1.6.1 The unqualified auditor’s report
1.6.2 Basic elements of the unqualified auditor’s report
1.6.3 Modified auditor’s report
1.6.3.1 Matters that do not affect the auditor’s opinion
1.6.3.2 Matters that do affect the auditor’s opinion
1.6.4 Report on comparatives
1.6.5 Key audit matters
1.7 Auditing in a Computerized Information Systems (CIS) Environment
1.7.1 Internal control in a CIS environment
1.7.1.1 Introduction
1.7.1.2 Impact of computers on accounting and internal control
systems
1.7.1.2.1 General Controls
1.7.1.2.2 Application controls
1.7.1.3 Unique characteristics of specific CIS
1.7.1.3.1 Stand alone
1.7.1.3.2 On-line
1.7.1.3.3 Database system
1.7.2 Basic approach to the audit of CIS environment
1.7.2.1 Introduction
1.7.2.2 Effects of computers on the audit process
1.7.2.3 Computer assisted audit techniques
1.7.2.4 Electronic commerce
1.7.3 Auditing new technologies
1.8 Attestation Services
1.8.1 Procedures and reports on special purpose audit engagements
1.8.1.1 General considerations
1.8.1.2 Audit of financial statements prepared in accordance with
comprehensive basis of accounting other than GAAP in the
Philippines
1.8.1.3 Audit of a component of financial statements
1.8.1.4 Reports on compliance with contractual agreements
1.8.1.5 Reports on summarized financial statements
1.8.2 Attestation and related services
1.8.2.1 Examination of prospective financial information
1.8.2.2 Engagements to review financial statements
1.8.2.3 Engagements to perform agreed-upon procedures regarding
financial information
1.8.2.4 Engagements to prepare or compile financial information
1.8.2.5 Service organization controls and the service auditor’s report
1.8.2.6 Engagements performed in accordance with other criteria
1.8.3 The role of CPAs in rendering other services (aside from auditing
and attestation)

2.1 Governance, Ethics and Quality Management

2.1.1 Corporate governance
2.1.2 Ethical standards and responsibilities of professional accountants
2.1.3 System of quality management
2.1.3.1 Elements of a system of quality management
2.1.3.2 Leadership responsibilities
2.1.3.3 Ethical requirements
2.1.3.4 Acceptance and continuance
2.1.3.5 Human resources
2.1.3.6 Engagement performance
2.1.3.7 Monitoring
2.1.3.8 Documentation of the System of Quality Management
2.1.4 Regulatory requirements related to the practice, accreditation and
regulation of public accounting and auditing services
2.2 Planning the Audit and Performing Risk Assessment Procedures
2.2.1 Risk-based audit – overview
2.2.2 Risk assessment – overview
2.2.3 Preliminary activities
2.2.3.1 Engagement acceptance and continuance
2.2.4 Planning the audit
2.2.4.1 Overall audit strategy
2.2.4.2 Determining and using materiality
2.2.4.3 Audit team discussions
2.2.4.4 Understanding and auditing business processes
2.2.4.4.1 Order to cash
2.2.4.4.2 Purchase to pay
2.2.4.4.3 Plan to inventory
2.2.4.4.4 Hire to retire
2.2.4.4.5 Acquire to retire
2.2.4.4.6 Record to report
 2.2.4.4.7 Close, consolidate and report
2.2.4.4.8 Financial planning and analysis
2.2.4.4.9 Other business processes
2.2.5 Performing risk assessment procedures – entity wide and business process
level
2.2.5.1 Identification and assessment of inherent risks
2.2.5.2 Identifying objectives and key risks
2.2.5.3 Understanding internal control
2.2.5.4 Evaluating internal control
2.2.5.5 Communicating deficiencies in internal control
2.2.5.6 Concluding the risk assessment phase
2.3 Risks Response
2.3.1 Risk response – overview
2.3.2 Developing the risk-based audit plan
2.3.3 Determining the extent of testing
2.3.4 Documenting work performed
2.3.4.1 Preparation of audit working papers
2.3.4.2 Preparation of analysis worksheets
2.3.4.3 Formulation of adjusting and correcting entries
2.3.5 Written representations
2.3.6 Engagement supervision and consultation
2.4 Audit Communication and Reporting
2.4.1 Reporting –overview
2.4.2 Evaluating audit evidence
2.4.3 Communicating results
2.4.3.1 Criteria and quality of communications
2.4.3.2 Disseminating results
2.4.3.3 Communicating with those charged with governance
2.4.4 Preparing the audit report
2.4.4.1 Modifications to the auditor’s report
2.4.4.2 Emphasis of matter and other matter paragraphs
2.4.4.3 Comparative information
2.4.5 Monitoring and closing the engagement
 Table of Specifications
in AUDITING
Effective October 2022 Licensure Examination for Certified Public Accountants (LECPA)

Philippine Qialufications Framework level 6

Difficulty Level Easy (30%) Moderate (40%) Difficult (30%)

Bloom’s Taxonomy Remembering Understanding Applying Analyzing Evaluating Creating

Weight No. of No. of Items No. of Items No. of Items No. of No. of Items No. of
Topics and Outcomes In Items Items Items
Percent
The examinee can perform the following competencies under each
topic:

A. AUDITING THEORY 50% 35 11 14 10

5.7% 4
1. Fundamentals of Auditing and Assurance Services
1.1 Introduction to assurance engagements 2 2
1.1.1 Discuss the nature, objective and elements
1.1.2 Identify the types of assurance engagements
(audits, reviews, other assurance
engagements)
1.2 Introduction to auditing 2 2
1.2.1 Discuss the nature, philosophy, and
objectives
1.2.2 Differentiate the types of audits
1.2.2.1 According to nature of assertion/data (financial
statements audit, operational audit, and
compliance audit)
1.2.2.2 According to types of auditor (external
independent financial statements audit, internal
audit, and government audit)

2. The Risk-based Financial Statement Audit – Client Acceptance,

5.7% 4
Audit Planning, Supervision and Monitoring

17
2.1 Explain the overview of the risk-based audit process 1 1
2.2 Illustrate and explain the pre-engagement 1 1
procedures
2.3 Explain the scope and purposes of audit planning 1 1
2.3.1 Identify and discuss the essential planning
procedures
2.3.1.1 Knowledge of the business
2.3.1.2 Preliminary analytical procedures
2.3.1.3 Materiality
2.3.1.4 Assessing and managing audit risks
2.3.1.5 Overall audit plan and audit program (experts,
internal auditor, other independent auditors)
2.4 Perform the direction, supervision, and review
1
1

3. Understanding the Entity and its Environment including its

Internal Control and Assessing the Risks of Material Misstatement 7.1% 5

3.1 Describe and discuss the industry, regulatory and other external 2 2
factors, including the applicable financial reporting framework
3.1.1 Describe the nature of the entity
3.1.2 Discuss the objectives and strategies and related
business risks
3.1.3 Describe and discuss the measurement and review of
the entity’s financial performance
3.2 Discuss and explain Internal Control
3.2.1 Identify and explain the basic concepts and elements of 1 1
internal control
3.2.2 Identify and discuss consideration of accounting and
internal control systems
3.2.2.1 Understanding and documentation
3.2.2.2 Assessment of control risks
3.2.2.2.1 Test controls
3.2.2.2.2 Documentation
3.3 Identify, discuss, and assess the risks of material misstatement
3.3.1 Fraud and errors 1 1
3.3.2 Risks assessment procedures
3.3.3 Discussion among the engagement team
3.3.4 Significant risks that require special audit consideration
3.3.5 Risks for which substantive procedures alone do not
provide sufficient appropriate audit evidence
3.3.6 Revision of risk assessment

18
 3.4 Discuss and communicate the risks of material
misstatement with those charged with governance and
management 1 1
4. Audit Objectives, Procedures, Evidence and
7.1% 5
Documentation
4.1 Describe and discuss the nature and significance 1 1
4.2 Identify the evidential matters 1 1
4.3 Perform the audit procedures/techniques including 2 2
audit selection
4.4 Prepare audit working papers 1 1
5. Completing the Audit/Post-Audit Responsibilities 7.1% 5
5.1 Discuss the completion of the audit and audit 3 1 2
report preparation
5.1.1 Describe the analytical procedures for overall
review
5.1.2 Determine related party transactions
5.1.3 Discuss subsequent events review
5.1.4 Discuss the assessment of going concern
assumption
5.1.5 Explain how to obtain client’s representation
letter
5.1.6 Discuss and describe how to evaluate findings,
formulate an opinion, and draft the audit report
5.2 Identify and discuss post-audit responsibilities
5.2.1 Discuss subsequent discovery of facts
2 2
5.2.2 Discuss subsequent discovery of omitted procedures
6. Reports on Audited Financial Statements 5.7% 4
6.1 Illustrate an unqualified auditor’s report 1 1
6.2 Explain the basic elements of the unqualified auditor’s 1 1
report
6.3 Describe a modified auditor’s opinion report 1 1
6.3.1 Identify matters that do not affect the auditor’s
opinion
6.3.2 Identify matters that do affect the auditor’s
opinion
1
6.4 Prepare and discuss report on comparatives 1
6.5 Identify key audit matters
7. Auditing in a Computerized Information Systems (CIS)
4.2% 3
Environment
7.1 Describe and identify the Internal Control in a CIS environment 1
7.1.1 Introduction
7.1.2 Impact of computers on accounting and internal control
1
systems
7.1.2.1 General Controls
7.1.2.2 Application Controls

19
 7.1.3 Unique characteristics of specific CIS
7.1.3.1 Stand alone
7.1.3.2 On-line
7.1.3.3 Database system
7.2 Discuss, describe, and identify the basic approach to the audit of
CIS environment 1 1
7.2.1 Introduction
7.2.2 Effects of computers on the audit process
7.2.3 Computer assisted audit techniques
7.2.4 Electronic commerce
7.3 Describe and discuss how to audit new technologies
1 1

8. Attestation Services 7.1% 5

8.1 Identify and describe the procedures and reports on 2 1 1
special purpose audit engagements
8.1.1 Discuss the general considerations
8.1.2 Discuss the audit of financial statements
prepared in accordance with a
comprehensive basis of accounting other than
GAAP in the Philippines.
8.1.3 Describe the audit of a component of
financial statements
8.1.4 Describe the reports on compliance with
contractual agreements
8.1.5 Describe the reports on summarized
financial statements

8.2 Discuss attestation and related services 2 2

8.2.1 Discuss the examination of prospective
financial information
8.2.2 Describe engagements to review financial
statements
8.2.3 Describe engagements to perform agreed-
upon procedures regarding financial
information
8.2.4 Describe engagements to prepare or
compile financial information
8.2.5 Describe and discuss service organization
controls and the service of auditor’s report
8.2.6 Identify and discuss engagements
performed in accordance with other criteria
8.3 Describe the role of CPAs in rendering other services
(aside from auditing and attestation). 1 1

20
B. AUDITING PRACTICE 50% 35 10 14 11
1. Governance, Ethics and Quality Management 7.1% 5
1.1 Discuss corporate governance 1 1
1.2 Identify and discuss the ethical standards and 1 1
responsibilities of professional accountants
1.3 Describe and discuss the system of quality 2 2
management
1.3.1 Elements of a system of quality
management
1.3.2 Leadership responsibilities
1.3.3 Ethical requirements
1.3.4 Acceptance and continuance
1.3.5 Human resources
1.3.6 Engagement performance
1.3.7 Monitoring
1.3.8 Documentation of the System of Quality
Management
1.4 Determine and discuss the regulatory requirements 1 1
related to the practice, accreditation, and regulation of
public accounting and auditing services
2. Planning the Audit and Performing Risk Assessment
Procedures 25.7% 18

2.1 Explain the overview of Risk-based audit 1 1

2.2 Explain the overview of risk assessment 1 1
2.3 Perform the preliminary activities 1 1
2.3.1 Discuss the engagement acceptance and continuance
2.4 Prepare and discuss the audit plan 14 6 8
2.4.1. Describe Overall audit strategy
2.4.2 Determine and apply the use of materiality
2.4.3 Encourage discussion with the audit team
2.4.4 Audit the amounts of various accounts of business
processes:
2.4.4.1 Order to cash
2.4.4.2 Purchase to pay
2.4.4.3 Plan to inventory
2.4.4.4 Hire to retire
2.4.4.5 Acquire to retire
2.4.4.6 Record to report
2.4.4.7 Close, consolidate and report
2.4.4.8 Financial planning and analysis
2.4.4.9 Other business processes

21
 2.5 Perform risk assessment procedures entity wide and business 1 1
process level
2.5.1 Identify and assess inherent risks
2.5.2 Identify objectives and key risks
2.5.3 Describe and explain internal control
2.5.4 Evaluate internal control
2.5.5 Communicate deficiencies in internal control
2.5.6 Conclude the risk assessment phase

3. Risk Response 8.5% 6

3.1 Explain the overview of risk response 1 1
3.2 Develop the risk-based audit plan 1 1
3.3 Determine the extent of testing 1 1
3.4 Document the work performed 1 1
3.4.1 Prepare audit working papers
3.4.2 Prepare analysis worksheets
3.4.3 Formulate adjusting and
correcting entries
3.5 Prepare written representations 1 1
3.6 Conduct engagement supervision and consultation 1 1
4. Audit Communication and Reporting 8.6% 6
4.1 Discuss the overview of reporting the audit 1 1
4.2 Perform audit evidence evaluation 1 1
4.3 Communicate audit results 1 1
4.3.1 Determine the criteria and quality of
communication
4.3.2 Disseminate the results
4.3.3 Communicate with those charged with
governance
4.4 Prepare the audit report 2 2
4.4.1 Perform any modification to the auditor’s
report
4.4.2 Determine the need of Emphasis of matter
and other matter paragraphs
4.4.3 Prepare comparative information
4.5 Perform monitoring and closing of the engagement 1 1

TOTAL 100% 70 21 28 21

22