The Audit Process can be described as one of the most important events that occur over a fiscal year for an organization.
It is extremely important to ensure that the audit process is conducted in a smooth and effective manner, so that required KPIs can be met, and the company is able to meet their objectives in a clear direction.
In this regard, it is quite important to ensure the fact that auditors are able to take all audit assertions into account, so that they can give their opinion based on professional judgment, with substantial evidence.
During the course of audit, there are numerous steps that auditors take in consideration in order to get a holistic idea about the scope of the work they are offering, and the additional things they need to do in order to get a proper idea regarding the audit planning, and procedures that they executed over the course of time.
Audit Working Papers can be defined as the documents that auditors record during the course of the audit, whilst they are obtaining evidence regarding the company’s financial statements, and other relevant transactions.
Importance of Auditing Working Papers
As mentioned earlier, it can be seen that auditing working papers can be defined as really important sources of information, predominantly on grounds of ensuring that all the workings, observations, and important information is noted down. This holds tantamount value for a number of reasons, which are given below:
- Firstly, it can be seen that audit working papers are an excellent resource that helps the auditors to take guidance from, particularly in case of checking the relevant schedules. This helps to ensure that they are able to follow the Audit Plan, and ensure that they duly execute the strategies in order to address the issues of audit in the most effective manner.
- In the same manner, it can also be seen that audit working papers are highly useful in order to act as evidence against after the work has been completed. In the case where there are certain questionable claims put forth by the auditor, working papers are highly useful in backing up that claim, so that there is a surety that the claim is not out of thin air, and has substance. Audit working papers in this regard are able to illustrate the connection drawn and make sense of the claim that is made by the auditor.
- Audit Working Papers are also necessary for audit quality control purposes. This is primarily built on the premise that these working papers need to reflect substantial work that is going to be proof of the tasks and objectives that have been carried out by the company. In this regard, it is also crucial to realize that these audit working papers show the overall depth to which auditors have managed to complete the audit process.
- In the same manner, audit working papers also prescribe some very useful recommendations that can be used by auditors in order to draw up reasonable claims and assurances pertaining to the quality standards that were followed in the audit process, in addition to possible areas of improvement that can be worked on in the future.
- Retention of records is perhaps the very integral importance of auditing working papers. This is essential because of the reason that it helps the auditors to conduct the audit in an effective manner in the next year. Factually, previous years’ audit working papers tend to be really helpful for the current year, since they help to clarify a number of misunderstandings in this regard. In the same manner, it also helps in the case of auditors’ transition. The new auditors can use the working papers of the previous orders, after proper disclosure, since they can be really helpful to understand the dynamics of the company.
Audit Working papers are, without a doubt, a very important part of the overall audit process. This is essential because of the reason that audit working papers are used in order to create proper relevance when it comes to important matters pertaining to accounting and financial considerations of the company.
Audit working papers also help in a quick run-through after the process has been completed. Given the fact that audit is a time-consuming process, spread across several days, it is often confusing for auditors to keep a note for every transaction that they cover in this regard. Audit working papers can help them to revisit the procedure with relative ease.