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Chapter 6 (2)

Audit documentation is a record of audit procedures, evidence obtained, and conclusions reached, aimed at ensuring compliance with auditing standards and legal requirements. It serves multiple purposes, including assisting the audit team in planning, accountability, and quality control. The documentation must be sufficient for an experienced auditor to understand the audit process and is considered the property of the auditor unless specified otherwise by law.

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Chapter 6 (2)

Audit documentation is a record of audit procedures, evidence obtained, and conclusions reached, aimed at ensuring compliance with auditing standards and legal requirements. It serves multiple purposes, including assisting the audit team in planning, accountability, and quality control. The documentation must be sufficient for an experienced auditor to understand the audit process and is considered the property of the auditor unless specified otherwise by law.

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riteshpoddar789
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We take content rights seriously. If you suspect this is your content, claim it here.
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CHAPTER - 6 AUDIT DOCUMENTATION

Audit Documentation refers to


- the record of audit procedures performed,
- relevant audit evidence obtained, and
- conclusions the auditor reached.

Objectives of Auditor as per SA 230/ Nature of Audit Documentation


The objective of the auditor is to prepare documentation 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 SAs and applicable legal
and regulatory requirements.

Purpose of Audit Documentation:


(i) Assisting the engagement team to plan and perform the audit.
(ii) Assisting members of the engagement team to direct and supervise the audit work, and to
discharge their review responsibilities.
(iii) Enabling the engagement team to be accountable for its work.
(iv) Retaining a record of matters of continuing significance to future audits.
(v) Enabling the conduct of quality control reviews and inspections in accordance with SQC 1.
(vi) Enabling the conduct of external inspections in accordance with applicable legal, regulatory or
other requirements.

Form content and extent of Audit Documentation

auditor shall prepare audit documentation that is sufficient to enable an experienced auditor, having no
previous connection with the audit, to understand:
(a) The nature, timing and extent of the audit procedures performed.
(b) The results of the audit procedures performed and the audit evidence obtained and
(c) Significant matters arising during the audit and the conclusions reached thereon and
significant professional judgements made in reaching those conclusions.

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Further in documenting the nature, timing and extent of audit procedures performed, the
auditor shall record:
(a) The identifying characteristics of the specific items or matters tested.
(b) Who performed the audit work and the date such work was completed; and
(c) Who reviewed the audit work performed and the date and extent of such review.

The auditor shall document discussions of significant matters with management, those charged
with governance, and others, including the nature of the significant matters discussed and when
and with whom the discussions took place.

If the auditor identified information that is inconsistent with the auditor’s final conclusion
regarding a significant matter, the auditor shall document how the auditor addressed the
inconsistency.

The form, content and extent of audit documentation depend on factors such as:
- The size and complexity of the entity.
- The nature of the audit procedures to be performed.
- The identified risks of material misstatement.
- The significance of the audit evidence obtained.
- The nature and extent of exceptions identified.
- The need to document a conclusion or the basis for a conclusion not readily determinable from the
documentation of the work performed or audit evidence obtained.
- The audit methodology and tools used.

Audit file may be defined as:


- 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.

Assembly of the Final Audit File:


- SQC 1 “Quality Control for Firms that perform Audits and Review of Historical Financial Information,
and other Assurance and related services”, requires firms to establish policies and procedures for

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the timely completion of the assembly of audit files.
- An appropriate time limit within which to complete the assembly of the final audit file is ordinarily
not more than 60 days after the date of the auditor’s report.
- The completion of the assembly of the final audit file after the date of the auditor’s report is an
administrative process that does not involve the performance of new audit procedures or the
drawing of new conclusions.
- Changes may, however, be made to the audit documentation during the final assembly process, if
they are administrative in nature.
- Examples of such changes include:
● Deleting or discarding superseded documentation.
● Sorting, collating and cross-referencing working papers.
● Signing off on completion checklists relating to the file assembly process.
● Documenting audit evidence that the auditor has obtained, discussed and agreed with the
relevant members of the engagement team before the date of the auditor’s report.
- SQC 1 requires firms to establish policies and procedures for the retention of engagement
documentation. The retention period for audit engagements ordinarily is no shorter than seven
years from the date of the auditor’s report, or, if later, the date of the group auditor’s report.

Ownership of Audit Documentation


- SQC 1 provides that, unless otherwise specified by law or regulation, audit documentation is the
property of the auditor.
- He may at his discretion, make portions of, or extracts from, audit documentation available to
clients, provided such disclosure does not undermine the validity of the work performed, or, in the
case of assurance engagements, the independence of the auditor or of his personnel.

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