Documentation T5

Question 1

What is audit documentation

Answer 1

The record of procedures performed, evidence obtained and the conclusion reached.

Question 2

Why assurance providers need to record their work

Answer 2

To assist the audit team to plan and perform.

From Planning, auditors can see what procedures we need to carry out to reduce the risk. Recording work allows us to see what we have already carried out.

Supervising work

Senior Auditors can review juniors documented work and give feedback reviewing if the procedures directly address the risk.

Enables the auditor to be accountable and prove compliance with ISA

It allows the auditors to show their reviews were robust and provide proof for compliance.

Retain a record of significant info for future audits.

May have to use documentation again or review it.

Question 3

Factors impacting the form and content of documentation.

Answer 3

Size and complexity of entity

Nature of audit procedures performed

Identified risks of material misstatement

The need on some to document a conclusion if it is not obvious based off the evidence obtained.

Question 4

working paper contents 3 mnemonic

Answer 4

Nice young friends need dates

Silly rats do odd stuff

We keep records and check

Question 5

Nice young friends need dates

Answer 5

Name of client
Name of reviewer

Year-end date

file reference of working paper

Name of preparer of documents

Date working paper prepared

Names can include signature

Question 6

silly rats do odd stuff

Answer 6

Subject of paper e.g payables

reviewer name

date of review/

objective

sources of info e.g payables ledger

Names can include signature

Question 7

We keep records and check

Answer 7

work done

Key e.g ticks might mean agree with payables ledger (coding)

Results

Analysis

Conclusion

Names can include signature

Question 8

Filing of working papers- 2 different types of files used to split working papers

Answer 8

Permanent file- used for files with continuing importance.

Current file- Information only relevant to current year audit

Question 9

examples of working papers in permanent file and current file

Answer 9

Permanent file- Engagement letters

Previous year signed accounts

new client q air

Legal documents

details of the history of
client business

Accounting systems (providing they don’t change then we amend)

Current file-
Financial statements

List of points to carry forward for next audit year ( although for the next year, it is not permanent to better to include here.)

Accounting checklist

Reconciliations

Risk assessments

details of substantive testing etc

Question 10

ICAEW requirement

Answer 10

Keep all audit working papers for at least 6 years from the accounting period they relate too.

(not client due diligence test doc- 5 year after relationship ended)

Question 11

Is recording documentation a legal requirement

Answer 11

No