Documentation is records used by clients to conduct business and substantiate financial statements. The auditor examines documents to obtain evidence and support conclusions. Audit documentation is the principal record of procedures applied, evidence obtained, and conclusions reached. Documentation can be internal records retained within the organization or external records held by outside parties. Electronic documentation is also commonly used.

2.  Documentation is the auditor’s examination of the clients
documents and records to substantiate the information
that is or should be included in the financial statements.
 The documents examined by the auditor are the records
used by the client to provide information for conducting
its business in an organized manner.
 Audit documentation is also the principal record of
auditing procedures applied, evidence obtained, and
conclusions reached by the auditor in the engagement

3. Internal External
Is one that has been prepared Is one that has been in the hands
and used within client’s of someone outside the clients
organization and is retained organization who is a party to
without ever going to an the transaction being
outside party such as customer documented, but which is either
or vendor currently in the hands of the
client or readily accessible
Example : sales
invoice, employee’s Example : vendor’s
time reports and invoice, cancelled
inventory receiving notes payable and
report insurance policies.

4.  It is common way companies for a considerable portion
of client’s documentation to be available only in
electronic form.
 Some companies use Electronic Data Interchange (EDI)
to transact business electronically and complete
purchases, shipping, billing, cash receipt and cash
disbursement transaction entirely by the exchange of
electronic message.
 Both written and electronic information, such as records
of electronic transfer are valid and useful.

5.  When auditors use documentation to support recorded
transactions or amounts, it is often called as vouching.
 For example to vouch recorded acquisition transaction,
the auditor might trace the acquisition journal to
supporting vendor’s invoices and receiving reports and
thereby satisfy the existing objectives.
 If auditor traces from receiving reports to the
acquisitions journal to satisfy the completeness
objectives, it would not be appropriate to call it
vouching.