Ch3. - Audit Documentation

Question 1

What are the purpose of audit documentation?

Answer 1

The following are the purpose of Audit documentation:
1. Assisting the engagement team to plan and perform the audit.
2. Assisting members of the engagement team to direct and supervise the audit
work, and to discharge their review responsibilities.
3. Enabling the engagement team to be accountable for its work.
4. Retaining a record of matters of continuing significance to future audits.
5. Enabling the conduct of quality control reviews and inspections.
6. Enabling the conduct of external inspections in accordance with applicable
legal, regulatory or other requirements.

Question 2

On which factors the form , content , and extent of audit documentation depends on ?

Answer 2

The form, content and extent of audit documentation depend on factors such as:
1. The size and complexity of the entity.
2. The nature of the audit procedures to be performed.
3. The identified risks of material misstatement.
4. The significance of the audit evidence obtained.
5. The nature and extent of exceptions identified.
6. The need to document a conclusion or the basis for a conclusion not readily
determinable from the documentation of the work performed or audit
evidence obtained.
7. The audit methodology and tools used.

Question 3

What are the example of audit documentation?

Answer 3

Audit Documentation include:
♦ Audit programmes.
♦ Analyses.
♦ Issues memoranda.
♦ Summaries of significant matters.
♦ Letters of confirmation and representation.
♦ Checklists.
♦ Correspondence (including e-mail) concerning significant matters.

Question 4

“Audit documentation summary may facilitate effective and efficient reviews
and inspections of the audit documentation, particularly for large and
complex audits”. Explain.

Answer 4

The auditor may consider it helpful to prepare and retain as part of the audit
documentation a summary (sometimes known as a completion memorandum) that
describes-
♦ the significant matters identified during the audit and
♦ how they were addressed.
Such a summary may facilitate effective and efficient review and inspection of the
audit documentation, particularly for large and complex audits. Further, the
preparation of such a summary may assist auditor’s consideration of the significant
matters. It may also help the auditor to consider whether there is any individual
relevant SA objective that the auditor cannot achieve that would prevent the
auditor from achieving the overall objectives of the auditor.