Chapter 10: Documentation

Question 1

What is the purpose of the documentation?

Answer 1

• Planning and performance of engagement
• Supervision and review of work
• Evidence obtained for arriving at the conclusion
• Quality control procedures carried out
• Support the conclusion by assurance provider
• Understanding of work
• Evidence of compliance, laws and professional standard

Question 2

How is the form and content of the working papers formed?

Answer 2

• Prof. Judg.

- Automated working paper

Question 3

What and how is the audit working papers prepared?

Answer 3

• Sufficient paper
• to allow non-connected auditor
• understand 1) audit work 2) Evidence obtained 3) sig. matter 4)Conclusion

Question 4

What should the working paper contain in terms of information collected?

Answer 4

• Name of client
• Reporting date
• file reference
• Name of preparer
• Name of Reviewer
• Subject of doc
• Objective
• Source of info
• Sample size
• Work performed

Question 5

What are the types of audit file?

Answer 5

• Permenant audit file

- Current Audit file

Question 6

What is the Permanent audit file made of?

Answer 6

• Indexed
• Prepared at initial audit for the client
• Reviewed of subsequent audits

Question 7

What is the current audit file made of?

Answer 7

• relate to accounts audits
• indexed
• prepare audit on each occasion for client

Question 8

Which of the following are permanent audit file and current audit file?
Copies of draft FS
Working papers for each audit area
Organisation charts
Description of accounting systems
Accounting policies used
Bankers’/solicitors’ contact details
Location and product details of client
Copies of previous financial statements
Copies of previous reports to management
The memorandum and articles of association
Index
Planning memo/programmes/budgets/time
records
Statutory disclosures checklists
Summary of unadjusted differences
Letter of engagement

Answer 8

Copies of draft FS - CAF
Working papers for each audit area - CAF
Organisation charts - PAF
Description of accounting systems - PAF
Accounting policies used - PAF
Bankers’/solicitors’ contact details - PAF
Location and product details of client - PAF
Copies of previous financial statements - PAF
Copies of previous reports to management - PAF
The memorandum and articles of association - PAF
Index - PAF
Planning memo/programmes/budgets/time -CFA
Records - CFA
Statutory disclosures checklists - CFA
Summary of unadjusted differences - CFA
Letter of engagement - PAF

Question 9

Why is the safe custody and retention of the documentation important?

Answer 9

• kept confidential
• secure location
• e-docs secured
• keep on to them according retention policy (auditors six years)

Question 10

Who owns the working paper (Doc) and has right to access?

Answer 10

• Belong to creator
• kept confidential
• show to client at discretion
• not show to 3rd party