CHAP 10: DOCUMENTATION

Question 1

Định nghĩa audit documentation

Answer 1

Audit documentation (Working paper - WP): The record of procedures performed, relevant evident obtained and conclusions
the audit reached.

Question 2

Audit documentation provide:

Answer 2

1, evidence for the auditor basis for a conclusion about achievement of overall objectives of auditor
2,evidence that the audit was planned and performed in accordancce with ISA Standards and applicable legal and regulatory requirement

Question 3

Why audit documentation must be prepared in timely basis

Answer 3

Documentation prepared after audit work likely less accurate

Question 4

Why assurance provider need to record their work?

Answer 4

Assurance provider record their work to:
* Assist the audit team to plan and perform the audit
* Assist relevant members of the team to direct and supervise work
* Enable the audit team to be accountable for its work
* Retain record of matters of continuing significance to future audits
* Enable an experienced auditor to carry out quality control reviews
* Enable an experienced auditor to conduct external inspections in accordance with applicable legal, regulatory or other requirements.

Question 5

Why documentation need to sufficient?

Answer 5

Enable an experienced auditor, having no previous connection with the audit to understand nature,timing,extent of audit procedure performed to comply with ISA Standard and applicable legal and regulatory requirement

Question 6

Các matter ảnh hưởng đến form and content của working paper

Answer 6

• The size and complexity of the entity
• The nature of audit procedures to be performed
• The identified risks of material misstatement
• The significance of the audit evidence obtained
• The nature and extent of exception identified
• The need to document a conclusion or the basis for a conclusion not readily determinable
• The audit methodology and tools used

Question 7

The structure of working paper

Answer 7

• The name of client
• The reporting date
• The file reference of working paper
• The date of preparation
• The subject of the working paper
• The name of reviewer
• The date of review
• The objective of the work done
• The source of information
• How any sample was selected
• The sample size determined
• The work done
• A key to any audit ticks and symbols
• Appropriate cross-referencing
• The results obtained
• Analysis of errors
• Other significant observations
• The conclusion drawn
• The key points highlighted

Question 8

Overview of Automated WPs

Answer 8

Overview of Automated WPs:
* Documenting of audit work much easier
* Programs aid preparation of WP, lead schedules, trial balance and the
financial statement
* Automatically cross referenced, adjusted and balanced by computer

Question 9

Advantages of Automated WPs:

Answer 9

Advantages of Automated WPs:
* The risks of errors is reduced
* The WP are neater and easier to review
* The time saved is substantial as adjustment can be made easily to all working papers

Question 10

Overview of Electronic WPs

Answer 10

• Electronic WPs do not involve any automatic calculations
• The form of database containing all of WPs make up an electronic audit file.
• Electronic WPs can be cross – referenced with the program, and then signed off
  electronically by preparer and by reviews with various levels of authority
• These days, most documents are scanned and sorted electronically rather than in paper form.

Question 11

Draft FS và signed FS lưu ở đâu

Answer 11

Draft FS lưu ở Current audit file
signed FS lưu ở permanent audit file

Question 12

Permanent audit file (PAF)

Answer 12

• Definition: PAF contains any information of continuing importance to the audit
• Content of PAF
   Engagement letters
   New Client Questionnaire
   The memorandum and articles of association
   Other legal documents such as prospectuses, leases, sale agreements
   Details of the history of the client’s business
   Board minutes of continuing relevance
   Previous years’ signed account and analytical procedures
   Accounting systems notes, previous years’ control questionnaires

Question 13

Current audit file (CAF)

Answer 13

• Definition: contain any information of relevance to the current year’s audit.
• Content of CAF
• Financial statement
• Account checklists
• Management account details
• Reconciliations of management accounts
  and financial statements
• Report to partner including details of
  significant events and errors
• Review notes
• Audit planning memorandum
• A summary of unadjusted errors
• Time budgets and summaries
• Written representations from
  management
• Notes of board minutes
• Communication with third parties with
  experts or other auditors

Question 14

Content of WPs cover each audit area:

Answer 14

Content of WPs cover each audit area:
* A lead schedule
* Problems encountered and conclusion draw
* Audit plans
* Risk assessments
* Sampling plans
* Analytical procedures
* Detail of test of detail and test of control

Question 15

SAFE CUSTODY AND RETENTION OF DOCUMENTATION

Answer 15

 ICAEW requires all firms should have a document retention policy and
that Registered Auditors to keep all audit working papers required by
auditing standards for at least 6 years from the end of the accounting
period to which they relate
 Assurance work must be confidential and good security procedures
 Paper documents must be securely, in locked premises
* Electronic documents should be protected by electronic controls

Question 16

OWNERSHIP OF AND RIGHT OF ACCESS TO DOCUMENTATION

Answer 16

 WPs are the property of the assurance providers
 Report is the property of the client once it has been issued
 Assurance providers must follow ethical guidance on the confidentiality of working papers
 The Firm may show WPs to client at their discretion.
 Information should not be made available to third parties without the permission
of the client.