audit working papers Flashcards
audit working papers
organised
dont accumulate unnecessary working papers
no extensive copies of client’s records
-not necessary or practical to document EVERY matter
-timely basis
-make in such a way that an experienced auditor with no connection to the audit may understand :
1) Nature timing extent of procedures performed to comply with ISAs and legal (document identifying characteristics)
2) results of audit procedures and evidence obtained
-significant matters (document discussions with management), conclusions, significant judgements
ISA 230 - audit documentation
objective of the auditor is to prepare documentation that provides
-sufficeint appropriate record for the basis of the auditor’s report
-evidence that audit was planned and performed in accordance with ISAs and applicable legal and regulatory requirements
any information that contradicts the final conclusion regarding a significant matter
document how they were addressed when forming final conclusion
if auditor considers it necessary to depart from a basic principle or essential procedure
-document alternative procedures performed to achieve the objective of the audit
-reasons for departure from principle
In documenting the nature, timing, and extent of audit procedures performed, the auditor must record:
1- The identifying characteristics of the specific items or matters tested
2- Who performed the audit work and the date such work was completed, and
3- Who reviewed the audit work and the date and extent of such review (2).
Audit file
-complete assembling the file on a timely basis after date of auditor’s report
-dont discard before retention periodf
after final file has been completed, if auditor finds it necessary to modify the audit documentation or add new docs
document reasons for making them
when and by whom they were made or reviewed
after date of audit report, if exceptional circumstances arise to perform new or additional audit procedures
The auditor should document:
-The circumstances encountered
-The new or additional audit procedures performed, audit evidence obtained, and conclusions reached, and their effect on the auditor’s report
-When and by whom the resulting changes to audit documentation were made, and (where applicable) reviewed.
what happens if audit documentation is not of acceptable standards
-unwanted and unnecessary litigation
importance of working papers
-quality control
-assurance that work delegated by partner has been completed
-evidence of effective audit
-increase economy, effectiveness, efficiency of audit
-sufficiently detailed and upto date facts which support conclusions
-retain record of matters imp for future audits
avoiding unnecessary papers
before making a paper
ensure:
-imp for audit report support or for tax/legal purpose
-client staff can’t make it or hasn’t already made it
content of audit working paper
name of client
audit period
subject matter
file reference
initials of staff who made it
preparation date
in case made by client staff- date of receipt, initials of team member who did the work
initial of staff who reviewed the WP and date of review
papers prepared by client
make copies available to audit team
-if client WP to be retained, agree format beforehand, include info in timetable
-when arranging WP to be prepared, ensure WP give all info required
-clearly identify as being prepared by client
-audit team person resp for this area shud sign the WP, it ensures they have been checked and can be reviewed by manager and partner
-signature of audit team ensures WP is audited
characteristics of a good working paper
-state objective clearly eg. “to ensure completeness of trad epayables”
-fully state year/period end
-fully state extent of test (helps to determine suffeciency)
-if there is reference to another working paper, full reference must be given
-clearly and objectively state results
-conclusions should be consistent with the results of the test
-clearly referenced so it can be easily found later
-signed by preparer and reviewer to meet quality control requirements
is it necessary that each working paper is reviewed?
no but if review does take place
it shud be documented:
-what work is reviewed
-who reviewed it
-when it was reviewed
