Definition:
Audit documentation refers to the records or documentation of procedures that auditors performed, the audit evidence that they obtained and the conclusion that makes by them based on the evidence obtained. Audit documentation is sometimes called audit working paper or working paper.
Internal control documents that auditor prepare in Ms words, Ms excel or other application is the example of audit documentation.
Another best example that describes audit documentation would be the working paper that auditor prepares to document and test depreciation expenses.
Key information in audit documentation:
Audit documentation is very important for auditor especially in the areas of quality control of the audit. It is required by ISA that the audit documentation should be prepared in the form that others senior auditor who is not involved with the audit engagement previously could understand the work that performs when he reviews the documents.
The following is the key information that should have in the audit documentation:
- The nature of information or data that being prepare or documents
- Timing including the audit period that covers, and the date prepare
- Name of the auditor who prepares audit working papers
- The extent of the audit procedures performed to comply with the ISAs and applicable legal and regulatory requirements.
- The evidence that auditor obtains, the procedures that they use for testing and the result of testing should properly and clearly document in the audit working papers. This is to ensure that the reviewer could easily perform the quality review and to prove that the relevant standards are implementing.
- During an audit, the auditor might found the significant mater related to financial statements, their ethics, as well as their process. The auditor should clearly document these things.
- Some testing or sampling require auditor use their professional judgment and its importance to documents those judgments.
The objective of audit documentation:
Before the auditor could make a conclusion on financial statements whether those financial statements are free from material misstatement or they contain the misstatement, the auditor needs to make sure that they have enough evidence to support their conclusion.
Enough evidence here is sometimes called sufficient and appropriate evidence. Therefore, audit documentation is important for the success of audit works.
Here the summary of audit documentation:
- It provides evidence of the auditor’s basis for a conclusion about the achievement of the overall objective.
- It provides evidence that the audit was planned and performed in accordance with ISAs and other legal and regulatory requirements.
- It assists the engagement team to plan and perform the audit.
- It assists team members responsible for supervision to direct, supervise and review audit work.
- It enables the team to be accountable for its work.
- It allows a record of matters of continuing significance to be retained.
- It enables the conduct of quality control reviews and inspections (both internal and external).
Written by Sinra
