Keep on keeping on

May 01, 2020
While the CAP 2 Auditing and Assurance interim exam is cancelled, and the main exam is not taking place until mid-August, candidates must still prepare properly for the challenge ahead. Garret Mulvin reviews the main components of the Auditing and Assurance competency statement.

The cancellation of the 2020 CAP 2 Auditing and Assurance (AA) interim assessment means that most candidates will now be assessed entirely based on the final exam paper. The CAP 2 AA summer exam is scheduled to take place on 12 August 2020. Regardless of the interim assessment cancellation, the revised exam timetable or even a shift in work or study norms – candidates are reminded that the challenge that is the final AA exam remains unchanged.

There will be no change to the AA examiner’s expectation of students or to how their attempts will be assessed. As per recent examinations, the paper will consist of a compulsory case study question and three further questions of which students should attempt two. The AA syllabus is broad. Candidates should review recent examiner reports, work through past questions and review the solutions. Below are reminders of some of the significant parts that feature on the AA competency statement.


Ethics is an intrinsic part of the life of a professional accountant. Candidates should be able to demonstrate an understanding of how ethical issues can occur when preparing and auditing financial statements. It is important to be familiar with the ethical principles and the risks involved, as well as the safeguards or actions that can counteract such issues. Familiarity with the relevant sections of the Ethical Standard for Auditors is expected.


Risk is a cornerstone of the audit process. At a minimum, candidates should be prepared to identify business and audit risks based on the background information with which they are presented. Transcribing generic risks from notes which have been brought into the exam hall will not be sufficient.

Audit evidence and procedures

Substantive and analytical testing and testing of controls are central to the audit and assurance process. It goes without saying that knowledge of the applicable International Standards on Auditing is important. It is also difficult to audit the financial statements without a firm understanding of the financial reporting standards which underpin the numbers in these financial statements. Candidates should be prepared to bring their accounting knowledge into the AA examination and ensure they are prepared to make adjusting journal entries that may be required. A questioning mind is an asset to any auditor. Students should be prepared to demonstrate sufficient levels of professional scepticism when assessing audit evidence that is provided to them. 

Audit reporting

Audit reports comprise eight to 15 marks of the AA competency statement and students should expect this to be reflected on the exam paper. Candidates should understand the principles underpinning audit reports and be able to distinguish between unqualified, modified and qualified audit reports. It is important to use the information provided in the question scenario in order to support your conclusion as to the type of audit report that is required.