The document discusses audit documentation, also known as audit working papers. It defines audit documentation as the principal record of auditing procedures applied, evidence obtained, and conclusions reached. It should contain information needed to conduct the audit and prepare an audit report. The summary includes three key points about audit documentation: 1. Audit documentation includes a record of evidence accumulated, results of tests performed, documentation of significant findings, and basis for conclusions. 2. Audit documentation provides a basis for audit planning, review by supervisors, and determining the appropriate audit report. 3. Ownership of the audit files belongs to the auditor, and the files are considered confidential.

1. Topic 6: Audit Documentation
Chapter 7
AUD390 AUDITING DIA

2. TOPIC 1: AUDIT DOCUMENTATION
References: Chapter 7
AUD390 2011

3. AUD390 AUDITING DIA
AUDIT
DOCUMENTATION
IMPORTANCE OF
AUDIT WORKING
PAPERS
CONTROL & RIGHT
TO THE AUDIT
WORKING PAPERS
INDEXING, AUDIT,
CROSS-FOOTING
& EXTENSION
TYPES OF
WORKING PAPERS
TYPES OF
AUDIT FILES

4.  Def… the principal record of auditing
procedures applied, evidence obtained, &
conclusions reached by the auditor in the
engagement
 Also known as working papers
 It should include:
› The information the auditor consider
necessary to conduct the audit
› The information needed to prepare an audit
report
 Objective:
› The aid to auditor in providing reasonable
assurance that an adequate audit was
conducted in accordance with auditing
standards
AUD390 AUDITING DIA

5.  Contents of Audit Documentations
A record of the evidence accumulated
It include the results of the tests
Data for determining the proper type of audit
report
It include documentation about significant
audit findings or issues, actions taken to
address them, and the basis for the conclusions
reached
AUD390 AUDITING DIA

6.  It provides a basis for planning the audit
 Basis for review by supervisor and partners
 Provides an important sources of information to
assist the auditor in deciding the appropriate
audit report to issue
 Data in the files are useful for evaluating the
adequacy of audit scope & the fairness of the fin
stats
 It contains information needed to assist the
client in the preparation of fin stats
AUD390 AUDITING DIA

7.  Use as a reference by supervisory personnel to
evaluate whether sufficient appropriate
evidence was accumulated to justify the audit
report
 Serve as the basis for preparing tax returns
 Source of information for issuing communication
to AC and management concerning various
matters such as internal control weaknesses or
operational recommendations
 A useful frame of reference for training
personnel and as an aid in planning &
coordinating subsequent audits
AUD390 AUDITING DIA

8.  Ownership of Audit Files – Property of the
auditor
 Confidentiality of Audit File –Refer MIA By-Laws
(Code of Professional Conduct & Ethics)
AUD390 AUDITING DIA

9.  Permanent Files
Def … Data of a historical or continuing nature
pertinent to the current audit
It include:
 Extract or copies of such company documents
of continuing importance as the articles of
incorporation, bylaws, bond indentures &
contracts
 Analysis from previous years of accounts that
have continuing importance to the auditor
AUD390 AUDITING DIA

10.  Information related to the understanding of
internal control & assessment of control risk
 The results of analytical procedures from
previous years’ audits
AUD390 AUDITING DIA

11.  Current Files
All audit documentation applicable to the year
under audit
It include:
 Audit Programs
 Auditing Standards require a written audit
program for every audit
 General Information
 Documents to support audit for current year
 E.g. audit planning memos, abstracts or
copies of minutes of the BOD meeting,
abstract or contracts or agreements not
include in the permanent file, etc.
AUD390 AUDITING DIA

12.  Working Trial Balance
 A listing of the general ledger accounts &
their year-end balances
 Supporting Schedules
 E.g. analysis, trial balance or list,
reconciliation of amounts, test of
reasonableness, summary of procedures,
examination of supporting documents,
informational & outside documentation
AUD390 AUDITING DIA

13.  The ownership: the property of the auditor
 Part A-5 of the MIA By-Laws (Code of Professional
Conduct & Ethics) highlighted that there is a
need to maintain a confidential relationship with
the client
 Exception:
Subpoenaed by a court
Used as part of MIA approved peer review
program with other CA firms
AUD390 AUDITING DIA

14. 1. Differentiate between ‘permanent audit file’
and ‘current audit file’ and give 1 example of
the document contained in the respective files.
2. Briefly describe 3 purposes of preparing audit
working papers.
AUD390 AUDITING DIA