AUDIT DOCUMENTATION- PPT.pptx

1. AUDIT DOCUMENTATION
DR. A. HELDA MARY

2. AUDIT DOCUMENTATION:
AUDIT DOCUMENTATION IS THE RECORD OF
PROCEDURES PERFORMED, EVIDENCE OBTAINED,
AND CONCLUSIONS REACHED AS PART OF AN
AUDIT. THE PROPER PREPARATION OF AUDIT
DOCUMENTATION IS CRITICAL FOR SEVERAL
REASONS, INCLUDING THE FOLLOWING:

3. IT CAN BE USED AS A DEFENCE IF THE AUDITOR IS EVER ACCUSED OF
NEGLIGENCE.
IT IS EASIER FOR A REVIEWER TO EXAMINE.
IT REPRESENTS A BETTER LEVEL OF QUALITY CONTROL OVER AN
AUDIT.
IT SHOWS AUDITORS IN LATER YEARS HOW THE AUDIT WAS
CONDUCTED.
IT CAN BE USED AS A TRAINING TOOL FOR JUNIOR AUDITORS.

4. THE TYPES OF AUDIT DOCUMENTATION THAT SHOULD BE
ASSEMBLED INCLUDE THE FOLLOWING:
ANALYSES CONDUCTED
AUDIT PLANS
CHECKLISTS
CONFIRMATION LETTERS
MEMORANDA AND CORRESPONDENCE REGARDING ISSUES FOUND
REPRESENTATION LETTERS
SUMMARIES OF SIGNIFICANT FINDINGS

5. IN THE INTERESTS OF KEEPING THE AUDIT
DOCUMENTATION DOWN TO A MANAGEABLE
LENGTH, IT IS NOT NECESSARY TO INCLUDE
CORRECTED COPIES, DUPLICATES, NOTES
REGARDING PRELIMINARY CONCLUSIONS,
AND SUPERSEDED DRAFTS.

6. AUDIT DOCUMENTATION IS VERY IMPORTANT FOR
AUDITOR ESPECIALLY IN THE AREAS OF QUALITY
CONTROL OF THE AUDIT. IT IS REQUIRED BY ISA
THAT THE AUDIT DOCUMENTATION SHOULD BE
PREPARED IN THE FORM THAT OTHERS SENIOR
AUDITOR WHO IS NOT INVOLVED WITH THE AUDIT
ENGAGEMENT PREVIOUSLY COULD UNDERSTAND
THE WORK THAT PERFORMS WHEN HE REVIEWS THE
DOCUMENTS.

7. THE FOLLOWING IS THE KEY INFORMATION THAT SHOULD
HAVE IN THE AUDIT DOCUMENTATION:
THE NATURE OF INFORMATION OR DATA THAT BEING PREPARE OR
DOCUMENTS
TIMING INCLUDING THE AUDIT PERIOD THAT COVERS, AND THE
DATE PREPARE
NAME OF THE AUDITOR WHO PREPARES AUDIT WORKING PAPERS
THE EXTENT OF THE AUDIT PROCEDURES PERFORMED TO COMPLY
WITH THE ISAS AND APPLICABLE LEGAL AND REGULATORY
REQUIREMENTS.

8. THE EVIDENCE THAT AUDITOR OBTAINS, THE PROCEDURES THAT THEY USE
FOR TESTING AND THE RESULT OF TESTING SHOULD PROPERLY AND
CLEARLY DOCUMENT IN THE AUDIT WORKING PAPERS. THIS IS TO ENSURE
THAT THE REVIEWER COULD EASILY PERFORM THE QUALITY REVIEW AND
TO PROVE THAT THE RELEVANT STANDARDS ARE IMPLEMENTING.
DURING AN AUDIT, THE AUDITOR MIGHT FOUND THE SIGNIFICANT MATER
RELATED TO FINANCIAL STATEMENTS, THEIR ETHICS, AS WELL AS THEIR
PROCESS. THE AUDITOR SHOULD CLEARLY DOCUMENT THESE THINGS.
SOME TESTING OR SAMPLING REQUIRE AUDITOR USE THEIR PROFESSIONAL
JUDGMENT AND ITS IMPORTANCE TO DOCUMENTS THOSE JUDGMENTS.

9. BEFORE THE AUDITOR COULD MAKE A CONCLUSION ON FINANCIAL STATEMENTS
WHETHER THOSE FINANCIAL STATEMENTS ARE FREE FROM MATERIAL
MISSTATEMENT OR THEY CONTAIN THE MISSTATEMENT, THE AUDITOR NEEDS TO
MAKE SURE THAT THEY HAVE ENOUGH EVIDENCE TO SUPPORT THEIR CONCLUSION.
ENOUGH EVIDENCE HERE IS SOMETIMES CALLED SUFFICIENT AND APPROPRIATE
EVIDENCE. THEREFORE, AUDIT DOCUMENTATION IS IMPORTANT FOR THE SUCCESS
OF AUDIT WORKS.
SUMMARY OF AUDIT DOCUMENTATION:
IT PROVIDES EVIDENCE OF THE AUDITOR’S BASIS FOR A CONCLUSION ABOUT THE
ACHIEVEMENT OF THE OVERALL OBJECTIVE.
IT PROVIDES EVIDENCE THAT THE AUDIT WAS PLANNED AND PERFORMED IN
ACCORDANCE WITH ISAS AND OTHER
LEGAL AND REGULATORY REQUIREMENTS.

10. 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 TEAM TO BE ACCOUNTABLE FOR ITS WORK.
IT ALLOWS A RECORD OF MATTERS OF CONTINUING SIGNIFICANCE
TO BE RETAINED.
IT ENABLES THE CONDUCT OF QUALITY CONTROL REVIEWS AND
INSPECTIONS (BOTH INTERNAL AND EXTERNAL).

12. AUDIT DOCUMENTATION EXAMPLE
AUDIT DOCUMENTATION USUALLY STARTS FROM THE
PLANNING STAGE OF THE AUDIT UNTIL THE END OF THE
AUDIT ENGAGEMENT. SO, THERE IS A LOT OF
DOCUMENTATION THAT AUDITORS NEED TO DO, SO
THAT THEY CAN HAVE TANGIBLE EVIDENCE TO SHOW
TO REGULATORS OR OTHER RELEVANT PARTIES.

13. SOME EXAMPLES OF AUDIT DOCUMENTATION INCLUDE:
INFORMATION OBTAINED IN THE UNDERSTANDING OF THE CLIENT’S BUSINESS
AND CONTROL ENVIRONMENT.
PLANNING PROCESS OF THE AUDIT WORK
ANALYSIS OF TRANSACTIONS AND BALANCES AS WELL AS TRENDS AND RATIOS
RISKS OF MATERIAL MISSTATEMENTS IDENTIFIED AND ASSESSED IN THE
PLANNING STAGE
EVIDENCE OF AUDIT PROCEDURES PERFORMED INCLUDING NATURE, TIMING,
EXTENT, AND RESULTS OF THE AUDIT AS WELL AS HOW THEY ARE SUPERVISED
AND REVIEWED
INDICATION OF WHO PERFORMED WHICH AUDIT WORK AND THE COMPLETION
DATE OF SUCH WORK
WRITTEN REPRESENTATIONS OBTAINED FROM THE CLIENT’S MANAGEMENT, ETC.