SA 230- Audit Documentation

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SA 230 Audit Documentation
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• 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.

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• 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
  mentionedAUDITOR 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.

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• Now the question comes who review the audit
  documentation??? (
• 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) the successor auditor who review the
  predecessor audit work.
• 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.
  

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• Thus audit documentation demonstrates that the
  work was in fact performed whereas, audit
  documentation/working papers makes the audit work
  easy to review , makes audit in an organized
  manner and an easy reference serves as an
  evidence for the auditor that work has been
  performed in an organized manner and relevant
  documents have been obtained from the client . An
  auditors shall also maintain professional
  skepticism, as an auditor shall be questioning
  mind and shall be always be in a position to ask
  question from client on whatever point he fells
  necessary to ask from the client. Written by
  Sangam Kumar Chaudhary (CA Finalist)
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