Definition:
Permanent audit files are the files that keep the information used by auditors continuously. That information includes engagement later, client’s M&A, long-term contract or agreement, and board meeting minutes.
The auditor must keep the documents or events based on nature and classification.
And make sure that all information and documents they obtain from their clients are safe and do not leak to the person or party that should not access them.
A permanent audit file is different from the current audit file because the current audit file is only the current year’s audit. Yet, the permanent file keeps information or documents subject to be used in the next audit period.
If the audit keeps the documents properly as they should be, then audit processes are more efficient since they can easily find the required documents from the files.
Filing audit documents is part of quality management in an audit firm.
Here is the list of common information that includes in the permanent audit files:
- Engagement letters:
- New client questionnaire
- The memorandum and articles
- Other legal documents such as prospectuses, leases, sales agreement
- Details of the history of the client’s business
- Board minutes of continuing relevance
- Previous years’ signed accounts, analytical reviews, and management letters
- Accounting systems notes, previous years’ control questionnaires
- Accounting policies and financial manual
- Shareholder agreements
Review by Sinra