Audit Documentation

Audit documentation (working papers) should support the auditor’s representation that the engagement has been performed in accordance with GASS and substantiate the type of audit report ( such as an unqualified or qualified opinion) issued; however, the specific type, content, and extent of documentation is to some degree dependent upon the characteristics of the particular engagement and the audit methodology employed. The specific nature of the audit documentation is a matter of the auditor’s professional judgment.

The auditor must prepare audit documentation for each engagement in sufficient detail for an experienced auditor with no previous involvement with the engagement to understand the following:

•  The nature, timing and extent of audit procedures performed
• The results of the audit tests performed and the evidence collected
• Conclusion drawn on significant matters
• That the accounting records agree or reconcile to the audited financial statements (or other audited information)

An experienced auditor is an individual who has the competencies and skills that would have enabled him or her to have performed the engagement. This hypothetical experienced auditor may be either inside or outside the auditor’s firm.

The standard for audit documentation for an audit of a public company is the PCAOB’s AS-3(Audit Documentation). Audit documentation represents the written record of the auditor’s work and it serves as the primary support for the auditor’s conclusion. Audit planning, procedures performed, evidence gathered and conclusions reached are all to be documented. The PCAOB states that a failure to prepare adequate audit documentation is serious and inadequate in a high risk area is very serious violation of PCAOB standards. The PCAOB also states than an oral explanation of audit procedures without written documentary evidences is insufficient.  In addition, audit documentation should be prepared at the time the audit procedure is performed.

Questionnaire:

• What is Audit Documentation? 
• Explain Audit Documentation?