“The skill of an accountant can always be ascertained by
an inspection of his working papers”
SA 230 (REVISED)
AUDIT
DOCUMENTATION
PRESENTED BY: JAGRATI KOOKADA
DATE : 21 st FEBRUARY 2014
CONTENTS OF THE PRESENTATION
Meaning and purpose of Standards
 Why documentation is required
 What is Documentation
 Nature & Purpose
 Objective
 Form of Audit Documentation
 Contents of Audit Documentation
 Points to be considered
 Things to be kept in mind
 Retention of Documents

WHAT IS A STANDARD AND ITS PURPOSE….
A standard is a document that establishes uniform engineering or
technical specifications, criteria, methods, processes or practices.
Attributes
 Performance
 Implementation

Provides basic principles of audit as it should be.
 Provide a framework for performing and promoting audit
activities.
 Establish the basis for the evaluation of audit and assurance
performance.
 Foster improved organizational processes and operations.

WHY DOCUMENTATION?

Self- Defense in a Court of Law: Onus in a Court proceeding lies on
the auditor to prove that he was not professionally negligent in the
performance of his duties.

Effective Audit: Documentation is the only way an auditor can prove
to outsiders that an effective audit was planned and performed.

To assist as proof of audit evidence during the Peer Review Process
CONTINUE…..

Records of the work performed and conclusions reached regarding
significant matters.

Evidence that the audit was planned and performed in accordance
with SAs and applicable legal and regulatory requirements.
WHAT IS DOCUMENTATION?

Terms such as “working papers” or “work papers” are also used sometimes

It is maintained at 3 stages of audit work:

Audit Planning

Audit Implementation

Audit Reporting
Documentation takes record of :
 Audit procedures performed
 Relevant audit evidence obtained
 Conclusions reached
SA 230 : NATURE & PURPOSE
Assist team in planning
& performing
Assist external
inspection
Assist supervision
& direction
Record matters of
continuing significance
Assist QC review
Create accountability
SA 230: OBJECTIVE
Prepare documentation
that provides
Sufficient & Appropriate
record of basis of
auditor’s report
Evidence that audit was
planned and performed
in accordance with
SAs
FORM OF AUDIT DOCUMENTATION

The auditor should prepare audit documentation in such a manner
that it enables an experienced auditor
having no previous
connection with the engagement to review and testify as to the
audit work performed and the related audit findings.
CONTENTS OF AUDIT DOCUMENTATION
A working file should be prepared and maintained in the manner as
laid
down below which is in accordance with the standard provided:
Working papers are classified into two:
−
Permanent Audit File
−
Current Audit File
PERMANENT AUDIT FILE
−
It includes:
−
MOA & AOA /Deed /Bye Laws & Regulations in case of
Company/Firm/Co-operative Society.
−
Organizational Structure of the Client.
−
Copy of PAN/TAN Registration.
−
Record of communication with retiring auditor, i.e. NOC from
previous Auditor.
CURRENT FILES
Routine Audit
 Opening Trial Balance
 Sales/Purchase Vouching
 Expense/Income Vouching
 Salary
 Cash/Bank Vouching
 Journal Vouchers
 Debit & Credit Notes
 FIRC’s
 26AS
1.
Balance Sheet Items
 Share Capital – Any fresh issue/buyback/bonus issue
 Loans – Secured & Unsecured Loans
 Statutory Liabilities – PF,PT,TDS,VAT/CST,ST
 Fixed Assets – Addition/Deletions Invoices
 Investments – Current & Non Current
 Outstanding & Prepaid Expenses – Invoices
2.
Finalization Papers
 Inter Company Balance Details & Confirmations
 Balance Confirmation from Principal Creditors
 General Ledger Scrutiny – Trade Receivables, Payables etc
 Audit Observation
 CARO Checklist (if applicable)
 Tax Audit Clauses and their working
3.
Expenses in Foreign Currency (if any)
 Audit Adjustment Sheet
 Comparative Analysis Sheet with Ratios and Trends
 Partners Review
 ITR Computation for the relevant AY
 Signed Closing Trial Balance
 Management Representation Letter (MRL)

4.
ROC Documents
− Appointment Letter of Auditors
− Form 23B Filed
− Audit Engagement Letter
− List of Directors and Shareholders
− Declaration from directors u/s 274(1)(g)
− List of Partners with PSR
− Minutes
− ROC Forms Filed
− Statutory Registers
POINTS TO BE CONSIDERED

Audit Documentation may be recorded on paper or on electronic or other
media.

The auditor may include abstract or copies of the client’s records (for
example, specific contracts and agreements) as part of documentation.

The auditor need not include in documentation incomplete records, previous
copies of documents corrected for errors and duplicates of documents.

Oral explanations by the auditor do not represent adequate support for the
work auditor performed but it may be used to clarify information contained
in the audit documentation.
THINGS TO BE KEPT IN MIND….







Filing of working papers
Proper numbering/sequencing of working papers
Writing of Queries in detail
Disposing of Queries – at staff/senior/partner level
Discussing with seniors on matters of importance
Working papers to be signed, dated and approved by relevant level of audit staff
Importance of depicting the client’s name, file number, accounting period, area to
be checked, audit staff involved
RETENTION OF AND SUBSEQUENT
CHANGES TO AUDIT DOCUMENTATION

The auditor must retain engagement documentation for a period not
shorter than 10 years from the date of the auditor’s report.
THANK YOU