While you may be familiar with using the CPA Canada Handbook for Financial Reporting issues, Assurance has its own set of standards to refer to, known as the Canadian Auditing Standards (CAS). But do you really need to study these? Let’s get into it.
Level of knowledge
Unlike FR standards, you don’t need to know CAS standards inside and out. Instead, you should know where to find specific standards in Knotia. This applies to Assurance elective and Assurance role writers in CFE Day 2.
For other modules (Core 1, Core 2, other electives, other CFE roles, CFE Day 3), there’s no need to read the CAS standards at all. The reason is that the CAS standards are very technical and these are not tested in-depth in these other modules. The exception is Core 1, you may get theoretic questions on various audit topics in the MCQ portion, however these can studied from the EBook or the EBook summary notes.
So for all modules, except Assurance elective and CFE Day 2 Assurance role, you should study the commonly tested topics from other simplified resources, such as the EBook. These commonly tested topics include: procedures, assertions, audit planning memo, WIR, audit vs review vs compilation, sampling.
How to use CAS
The CAS standards are located in Knotia, below the Accounting standards.
The sections you need to know are:
- Canadian Standards on Quality Management
- Canadian Accounting Standards
- Other Canadian Standards
The Canadian Accounting Standards section is the largest, but all 3 sections are equally important:
Every CAS is made of an introduction, an objective, and a set of definitions, along with application of the requirements pertaining to the subject.
As noted, these are very technical, written in legal language.
I recommend studying these by reading them in conjunction with other study resources, such as the EBook. Your goal is tie the simplified explanations from the EBook to the CAS in Knotia. For example, Chapter 12 “Planning — Assertions and Procedures- Materiality” in the EBook explains that assertions are in paragraph A190 of CAS 315. Using the “Find” function (CTRL + F, or Command F in Mac) in Knotia, we find this:
Another example is Chapter 11 “Planning – Materiality” in the EBook. It explains that CAS 320 does not specify exact percentages, but it indicates that professional judgment should be applied. Using the “Find” function in Knotia, we see it’s in section A2. We can take a screenshot of this section and save to our notes for future reference.
By doing an initial run through before the exam, we get more familiar with the CAS structure and where the important things are.
Referencing CAS
Do you need to give the specific CAS # during the exams? Yes and no. Here’s what I mean.
For commonly tested Assurance AOs, such as audit planning memo, procedures, control weaknesses, you don’t need to put the CAS #. Instead, use the appropriate format (eg. WIR, RAMP).
For uncommon topics, such as special reporting, going concern, fraud, expert opinion, key audit matter, you do need to specify the CAS. You should reference CAS like you would FR standards, for example: “According to CAS 701…”. Note that I put special reporting in this list because it requires referencing the CAS #, but I would not classify it as uncommon topics otherwise because it’s tested often.
Let’s look at a feedback guide as an example. Using CFE Day 2 case TankCo case, this AO is about the bank requesting that TankCo provides a special report audited by an independent public accountant calculating the provisions of the agreement. You can see that the feedback guide specifically requires you to discuss CAS 805 or CSAE 3530, allowing for one other alternative.
Not putting these reports by CAS # and description will result in a lower than C score. Writing just the CAS # and description will not give you C either. You need to both refer to the correct CAS sections and discuss it. You would discuss it by speaking about the bank’s needs/objectives and explaining pros and cons of the reports, incorporating case facts as support.
For a list of all the special reports, check out this blog post.
Conclusion
In summary, if you’re in the Assurance elective or writing the CFE Assurance role, you should study CAS by reading a simplified assurance study resource and linking it to technical CAS standards. You should become familiar with the layout of CAS in Knotia, including where to find key information, how the CAS are structured, and how to navigate through it.
Most of common assurance AOs tested in the CPA Canada exams require you to use formats, rather than CAS, such as the audit planning memo and control deficiencies. For the complex assurance AOs and special reports, you need to know the specific CAS requirements and how to apply them effectively.
Extra resources
Simplified CAS summaries, including special reports, are available at CAS Summaries resource.
