AUDIT DOCUMENTATION CHAPTER 7

Question 1

Characteristics of good audit document

Answer 1

1. Properly identified with such information such as client name and period covered
2. Clearly indicate the work performance
3. Include sufficient info to fulfill the objectives
4. Conclusion is made

Question 2

State any importance of working papers

Answer 2

1. To aid auditor in providing assurance that an adequate audit was conducted
2. Provide basis for planning the audit
3. Record of evidence
4. Provide data
5. Provide basis of review
6. Reference for future audit

Question 3

What are the types of Audit Documents / Working Papers ?

Answer 3

1. Permanent Files
   (Contain data of historical or continuing nature)
2. Current files
   (Includes all audit documentation applicable to the year under audit)

Question 4

What are examples of permanent files ?

Answer 4

1. Company’s constitutions
2. Organization chart
3. Copies of important contract

Question 5

What are examples of current files ?

Answer 5

1. Working trial balance
2. Current year minutes of
   meetings
3. Working papers

Question 6

Examples of working paper in audit documentation

Answer 6

1. Audit plans
2. Audit programs
3. Working trial balance
4. Accounts analysis and listings
5. Audit memoranda
6. Adjusting entries

Question 7

Confidentiality of audit documentation, explain

Answer 7

Auditor should not use client info for personal advantage

Auditor shall not disclosed except in the permitted situations

Question 8

Circumstances which working paper can be used by other people

Answer 8

1. can be used by client if auditor wants to release them after careful consideration
2. by court or become court property
3. released to other users if auditor obtain permission from client

Question 9

Purposes for the auditor to maintain audit documentation

Answer 9

• It provides evidence of the overall
  objective.
• Audit was planned and performed in accordance with ISAs and other legal requirements.
• It assists the engagement team to plan and perform the audit.
• It assists team members responsible for supervision to direct, supervise and review audit work.
• It enables the conduct of quality control reviews and inspections (both internal and external)

Question 10

The importance of auditor’s attendance during physical
inventory stocktaking

Answer 10

• Existence assertion
• Completeness assertion
• Valuation assertion
• Consideration of possible inventory obsolescence