If You Haven’t Documented, You Haven’t Performed !!

Well, I hope all the Chartered Accountancy students already know about the importance of Audit Documentation especially those who have crossed CA- IPCC Group II and studied SA 230 ,i.e., AUDIT DOCUMENTATION. My this article will help you all in enhancing your knowledge about it.

The skills of an auditor can always be ascertained by his Working Papers.

Working Papers should document about the following:

  • The work has been adequately planned & supervised.
  • Internal control has been appropriately studied & evaluated.
  • Purpose of work.
  • Nature, Timing and Extent (NTE) of audit procedures performed.
  • The evidence obtained and procedures performed are reasonable to form an opinion.
  • Source of information analyzed & supporting evidences obtained, examined & evaluated.
  • Conclusions reached.

So it means if we don’t document, then we haven’t audited as per law. That’s why, audit documentation is very important. Besides this, it allows seniors to review audit works performed by their juniors. It also acts as an evidence in the court of law when a charge of negligence is brought against the auditor.

As per Companies Act, Working Papers are the property of the auditor. So the auditor is entitled to retain them. He may at his discretion, make portions of or extracts from his working papers to his client. In case of a company, the main auditor has to consider the report of the branch auditor & has a right to seek clarification & to visit the branch office but can’t ask even for the copy of the working papers.

I hope now you all clearly understood about audit documentation. And now many of you will you will be having a question in their mind about its retention, i.e., for how much time they should be stored. As per SA 230, it should be long enough to get any legal or professional requirement ( no specified limit ). But as per Standard Quality Control (SQC1), firms should establish policies for retention period of working papers. It should be kept up to 7 years from the date of auditor’s report.

I hope my article helped you all in enhancing your knowledge about audit documentation.

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