Audit documentation means records of audit procedure performed by an auditor during an audit procedure. sometimes it is also commonly known as ‘working papers of an auditor’. So question comes what is purpose of audit documentation in audit ?? There are several purpose of audit documentation such as :
2. DEFINATION OF AUDIT DOCUMENTATION
Audit documentation means records of audit procedure performed by an auditor during an audit procedure. sometimes it is also
commonly known as ‘working papers of an auditor’. So question comes what is purpose of audit documentation in audit ??
There are several purpose of audit documentation such as :
1. It assists the engagement team to plan & perform the audit
2. It also makes audit team accountable for the work carried by them
3. It enables the audit team to direct the and supervise their work in more s
4. Further it enables the conduct of quality control reviews & inspections .
So to understand it more deeply have some example of audit documentation :
Audit programs. Analyses.
Checklist
Letter of confirmations from management.
Issue memoranda.
Auditor may include copies of entity records like significant and specific contract agreement as a part of audit documentation, but
audit documentation is not a substitute of entity accounting records.
Now there is another topic and that is sqc1 SQC 1 “
quality control for firms that performs audit and review of HISTORICAL FINANCIAL INFORMATION and other assurance related
services” for timely completion of assembly of audit files.
3. The completion and assembly of final audit file is done after auditors report and it is an administrative
procedure that does not involve drawing of any new conclusion from it . but yes changes can however be
done during the final assembly process, if administrative in nature Examples of such changes are : Deleting
or discarding superseding documents. Sorting, collating or cross referencing working papers Sinning off
completion checklist. SQC 1 establish policy and procedure of retention period of documents of seven
years from the date of audit report or later the date of audit report as mentioned
AUDITOR IS ALSO NEEDED TO DOCUMENT SOME SINGNIFICANT MATTERS
What are significant matters 1. Matters t hat give rise to significant risk. 2. Results of audit procedure
performed as: (a) that financial statement could be material misstated. (b) need to revise auditor previous
assessment of risk of material misstatement. 3. Or circumstances that causes auditor significant difficulty
in applying accounting procedure. The most important thing is auditor professional judgement i.e. an
auditor shall take Its decision wisely and carefully by applying its skills & experience in a way that are in
accordance with professional standard / laws to develop an opinion that can be best served to its clients.
4. Now the question comes who review the audit documentation??? (
a) The answer to this question is auditors who are responsible to the new engagement&
review the prior period documentation to understand the work performed as an aid in the
current audit period.
b) (b) the successor auditor who review the predecessor audit work.
c) THINGS TO BE KEPT IN MIND
I. Filling of working papers
II. Proper numbering of working papers
III. Writing of queries in depth so that it can be discussed by management
IV. Disposing of queries with staff / partners/ or senior level management
V. Discussing important matters with senior level management
VI. Working papers need to be signed by top level management and shall be relevantly dated by
audit staffs. DOCUMENTATION ON SIGNIFICANT MATTERS
Auditors shall also report on significant matters such as:
1. Disagreement among members of engagement team or consult with engagement team about
final conclusion of audited matters
2. Such other circumstances which create significant difficulty in applying the audit procedure
3. Or subsequent changes in assured audit risk and auditors response to those risk.