Maintaining audit documentation is important to demonstrate the work performed was sufficient and in accordance with auditing standards. The audit documentation should provide a clear understanding of the work done, evidence obtained, and conclusions reached.

1. Implementation of SAs
Progress of an Audit
Peer Review Documentation

2. Standards on Auditing
• What are Standards on Auditing?
Aspect of Auditing Covered Numerical Series
Introductory Matters
General Principles and 100 - 199
Responsibilities 200 – 299
Risk Assessment and Response to 300 - 499
Assessed Risk 500 – 599
Audit Evidence 600 - 699
Using Work of Others 700 – 799
Audit Conclusions and Reporting 800 - 899
Specialised Areas
• SA 200 – Overall Objectives of the
Independent Auditor

3. Overview of the Audit Process
Appointment
Acceptance
Engagement /Scope
Documentation
Audit Planning
At
Gathering Audit Every
Evidence
Discussion with Step
Management
Audit Conclusion

4. Commencement of Audit
Appointment
i. Appointment Letter
ii. Copy of AGM resolution / other relevant resolution
iii. Quoting FRN
Acceptance
i. Eligibility as per sec 224(1B) of the Companies Act, 1956
ii. NOC from the previous auditor
iii.Acceptance letter
iv.Form 23B to be filed with ROC in case of company
audits as per Sec 224 (1A)
Engagement
Engagement letter
(SA 210 – Agreeing the terms of Audit Engagement)

5. Audit Planning
• Knowledge of business
• Consideration of Laws and Regulations
(SA 250)
• Audit Plan (SA 300)
• Audit Programme

6. Audit Risk & Assessment
1. What is audit risk?
• Mix of inherent, control & detection risk
2. How to assess risk?
• Making inquiries of management and others
• Analytical procedures
• General observation and inspection
3. Review of LY’s working papers

7. • Assessment of entity’s control risk-
Internal controls
• Discussion with the audit team and
setting of materiality and the
responses to assessed risk
• Fraud detection and responses to
fraud

8. Sampling
• Identification of universe
• Stratification
• Determination of sample size
• Types of selection methods:
- Random selection
- Systematic selection
- Haphazard selection
SICOM

12. Gathering Audit Evidence
 Opening balance tracing –
 SA 510- Initial Audit Engagement
 Vouching-
• (Occurrence, measurement ,rights and
obligation of the transaction)
 Leger scrutiny-
• Analysis of ledger
balances, classification, presentation
Contd…

13. Continued…..
SA 520 - Analytical Procedures:
• Profitability Ratios
• Management Efficiency Ratios
• Market Ratios
SA 540-Auditing and accounting estimate:
• Obtaining an Understanding of How Management
Makes the Accounting Estimates
• External confirmation procedure
• SA 600 – Using the work of another auditor
• SA 610 – Using the work of Internal Auditor(s)
• SA 620 – Using the work of an Auditor’s Expert

14. Comparison
SA 550- Related party V/s AS 18-Related Party
disclosure
SA 560- Subsequent Event V/s AS-4 events
occurring after balance sheet date
SA 570- Going concern V/s AS- 1 Disclosure of
accounting policies

15. Discussion with Management
Communication by the Auditor
 Should be in writing
 Should be communicated on timely basis
 Audit communication is treated as Audit
Evidence
SA 260 (Revised): Communication With
those Charged With Governance

16. Audit Conclusion
SA 700 - Forming an opinion and reporting on Financial
Statements
The minimum content that has to be there in the audit report
Firm’s Registration Number (FRN) in audit report
As per Para. A36 of SA 700 (Revised)
Opinions of Auditor – Unmodified / Unqualified
Opinion, Qualified Opinion, Adverse Opinion, Disclaimer of
Opinion
SA 705 deals with Modifications to the opinion in the
Independent Auditor’s Report.
SA 706 deals Emphasis of matter paragraphs and other
matter paragraphs in the independent auditor’s report.

17.  Audit Documentation (SA 230)
• What does Audit Documentation (Audit
File) include?
 SA 580 (Revised): Written Representations
 Importance of Audit Documentation
 What should be the logical sequence of
dates in audit documentation?

18. Peer Review Documentation
 Meaning:
As per the Statement on Peer Review, Peer Review means an
examination and review of the systems and procedures to
determine whether they have been put in place by the practice
unit for ensuring the quality of attestation services as
envisaged and implied / mandated by the Technical
Standards and whether these were effective or not during the
period under review.
 Objective
 Scope

19.  Documentation:
 The Statement on Peer Review does not lay down
any documentation requirements for the practice
unit. However, it suggests that certain minimum
records that represent the adequacy of quality
control policies and procedures followed by the
practice unit must be maintained.
Records to be
maintained
Mandatory Records, i.e., Recommendatory
Working Papers as per SA Records
230 on “Documentation”

20. Permanent File:
i.Permanent File contains matters which don’t change very
often.
ii. This file may be updated during structural changes in the
auditee’s information.
Current File:
i. Current file contains matters relating to audit of a single
period.
ii. The content of working papers is guided by
factors, v.i.z., completeness, accuracy, clarity, under
standing, legibility and neatness.
iii. Generally, each individual assigned to an audit engagement
should prepare working papers in such a manner that a
professional not connected with the engagement may later
examine such working papers and be able to determine
that the work was performed in accordance with the
standards on auditing.

21. Audit Documentation
 Audit Documentation – The record of audit
procedures performed, relevance audit evidence obtained
and conclusions the auditor reached.
 Audit file – One or more folders or other storage
media, in physical or electronic form, containing the
records that comprise the audit documentation for a
specific engagement.
 Purpose of audit documentation
 Content of Audit Documentation
 Assembly of final audit file
 Ownership of Audit Documentation