10: Documentation Flashcards
What is audit documentation?
the record of procedures performed, relevant evidence obtained and conclusions the auditor reached.
Why does audit work need to be documented?
the working papers are tangible evidence of the work done in support of the conclusion.
- Evidence that audit was planned and performed in accordance with ISAs and legal/reg requirements.
What are other (non-essential) reasons for auditors recording their work?
- Assist the team to plan and perform audit, assist team to direct and supervise work.
- Enable audit team to be accountable for its work
- Retain a record of matters for future audits
- Enable an experienced auditor to carry out quality control reviews and conduct external inspections
What should working papers show?
- The name of the client/reviewer
- Date of report/review
- Subject, Objective, source of info
- Sample info
- Work done
- Results, errors, key points
- Conclusions
What should documentation be
Sufficient for an auditor to understand nature, timing and extent of audit procedures to comply with ISAs, results and evidence obtained, conclusions reached, judgement made.
What are the advantages of automated working papers?
Make documenting of audit much easier:
- Risk of error reduced, less human intervention/error
- Working papers neater and easier to review
- Time saved will be substantial as adjustments can be easily made to all working papers
- Online so don’t have to be carried to locations, ^ Security also can be emailed or faxed for review
What is the difference between permanenet audit files and current audit files?
Perm: Contain info of continuing importance to the audit
Current: contain any info of relevance to the current year’s audit
What is included in permanent audit files
- Engagement letters
- New client questionnaire
- The memorandum and articles of association
- Client history, PY accounts, AP’s, system notes and control questionnaires.
What is included in current audit files?
- Financial statements, accounts checklist
- Summary of unadjusted errors, report to partner of significant events/errors
- Audit planning memorandum, time budgets, summaries and risk assessments.
- A lead schedule incl details of figures to be included in accounts
- Tests of detail and TOC conclusions drawn
How should firms keep working papers secure?
Physical: Kept securely in locked premises
Electronic: protected with electronic controls e.g. password
Who owns the following:
Working papers
Audit report
wp: Assurance provider - must be confidential, also only have to show firm at auditors discretion
AR: Clients property once issued
What is the document retention policy
ICAEW requires firms to keep all audit WP for at least 6 years from end of audit period to which they relate.
