Chapter 6

Audit Documentation

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Key to chapter content ICONS

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CHAPTER 6:
Documentation

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ISA 230 Audit Documentation

Provides evidence:
 of the basis for the auditor’s conclusion
 that the audit was planned and performed in accordance
with ISAs and legal and regulators requirements.

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Objective

The auditor must prepare documentation on a timely basis

that provides:

 A sufficient and appropriate record of the basis for the

auditor's report; and

 Evidence that the audit was planned and performed in

accordance with ISAs and applicable legal and
regulatory requirements.
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Extent
Audit documentation should be prepared that is sufficient to enable an
experienced auditor, having no previous connection with the audit, to understand:

Nature,
timing, and
extent

Results
Significant
and
matters
evidence

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Standardisation

Standard audit documentation is widely used. For example:

• Audit completion disclosure and other checklists.
• Internal Control Questionnaires/Evaluation Questionnaires.
• Audit programs.
• ….
It should be:
 tailored for each individual client
 kept up-to-date for changes in ISAs, IFRS Accounting
Standards, laws and regulations.

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Activity: Standardisation

Suggest THREE advantages and THREE disadvantages of

standardising audit working papers.

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Answer to activity: Standardisation
Advantages Disadvantages
Preparation and review are A "mechanical" approach may have
more efficient adverse consequences
It helps familiarise junior staff A "standard approach" may stifle
with standard procedures initiative and discourage professional
It facilitates direction (and judgment
delegation), supervision and May result in a "bare minimum"
review attitude
It helps achieve quality Set procedures may not be
It provides a consistent appropriate for a particular client
approach for specific audit Audit risk increases if the audit
approach is not tailored to the client's
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Documentation Techniques

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Content

Permanent Audit File Current Audit File

Documents of a permanent nature
that are of continuing importance to Documents that are of direct relevance
the audit process and provide a to current audit
history of significant audit related
matters Examples:

Examples:  External confirmations

 Company Registration and legal  Control checklists

structure  Audit Plan
 Articles of Association
 Analysis of business environment
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Audit Section Structure
 A "lead" schedule
 A section summary and conclusion
 Basis of accounting and accounting policy used
 A work programme of audit procedures
 A test lead schedule:
̶ objective of the test
̶ sampling approach
̶ work done
̶ conclusion
 Supporting schedules showing the work done, how it was done
and the matters arising
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Working
Paper
Information

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Significant Matters

All significant matters must be recorded, including the detail of

discussions with appropriate client personnel

Concerning, for example:

 Risks of material misstatement
 Difficulties in applying ISAs
 Findings that could affect the auditor’s report
 Matters to be reported to TCWG
 Going concern
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Assembly of Working Papers

All matters that support the audit opinion must be filed and the file
must be reviewed and signed off before signing the auditor's
report

Remainder, within 60 days

After final assembly, the auditor should not delete audit

documentation until the completion of the retention period

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Confidentiality and Safe Custody

Physical
Security

Back- Access
ups Controls

Electronic
Security

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Retention and Ownership

Documents should be retained for as long as they are required to

be kept by statute.

Audit working papers are owned by the auditor.

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Technical article: Documentation

Click the link below to open

the articles on accaglobal

Technical articles

Audit working papers

https://www.accaglobal.com/an/en/student/exam-support-
resources/fundamentals-exams-study-resources/f8/technical-
articles/effective-audit-service.html

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 Chapter 6: Summary
 Working papers record the basis for the auditor's report and evidence
obtained in accordance with ISAs and legal and regulatory requirements
 Documentation techniques include narrative notes, graphics,
questionnaires and checklists (paper and/or electronic)
 Information in the permanent audit file is of continuing importance and
provides a history of significant audit matters
 Information in the current audit file is relevant to the audit for the current
period and is usually split into stages (e.g. interim, year-end and final)
 Working papers should be assembled within 60 days of the auditor's
report and retained for seven years (is ACCA recommendation)
 Working papers are the property of the auditor.
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 Chapter 6: Practice questions

Study Question Bank

Documentation and
20 mins
Engagement Letters

For AA
Attempt the Study Question Bank questions listed above after studying this chapter
Attempt Revision Question Bank questions in your revision phase, after studying all chapters

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Thank you

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