Tickmarks should be concise and should adequately explain the results of the audit procedure performed. It should be evident as to whether or not an error or weakness was noted. Items tested should never be left blank. Either the results of the test should be documented, the attribute should be marked as not applicable, or an explanation should be provided as to why the test could not be performed. Explanations should be provided to show why items marked "N/A" are not applicable W/p numbering Each page in the working paper should be given a unique reference number that identifies its location. The number assigned should begin with a capital letter that matches the section of the working papers where the page will be filed (e.g. Planning working papers will start with the letter d followed by a dash and a number that allows the page to be filed in a logical sequence.
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General requirements for plan working paper are: Paper size audit work should be presented on 8 1/2" x 11" paper. Whenever possible, working papers and exhibits should be placed in a binder so the information on the page can be read without turning the binder. Items with information presented in landscape format should usually be mounted on 8 1/2 x 11 with the excess width folded at the right. Single-page exhibits with information presented in portrait format can be placed in a binder as an individual working paper. However, if more than minor report analysis of the information on the exhibit is needed, the exhibit should be mounted on left hand side of 14-column ledger paper with the analysis summarized on the right of the 14-column. This 14-column presentation should also be used for multi-page exhibits in portrait format. Headings Each working paper should have a descriptive, 4-line heading of: unc internal Audit, (area audited (as of date or review period) (description of test/ item on the page) Initials/Date each working paper should be dated and initialed by the preparer; the reviewer should mark. Tickmarks Tickmarks are used to simplify documenting work done and conditions found, usually during fieldwork. A legend that defines each tickmark should be provided and located near the tickmarks used. If the tickmark legend is not on the working paper where the tickmarks are used, the working paper should be referenced to the tickmark legend.
Logical Arrangement - working papers should follow a logical order. Organization section, below: Legibility and neatness - working papers should be legible and as pdf neat as practical. Sloppy workpapers may lose their worth as evidence. Crowding and writing between lines should be avoided by anticipating space needs and arranging the workpapers before writing. Organization, for routine audits and special projects, the structure of working papers should follow the standard format established for the department. Sample forms for sample of standard forms. Organization of working papers for misuse investigations is addressed. The standard format groups audit work into seven major sections: Communicating Results, potential Audit Comments Administration Planning and Preliminary work Internal Control Work and Process review Audit Program Testwork This structure presents the final product of an audit project - the report - first, followed.
Finally, section.35 of the, government Auditing Standards advises that: Working papers should contain sufficient information to allow an experienced auditor having no previous connection with the apple audit to ascertain from them the evidence that supports the auditors significant conclusions and judgments. Working Paper guidelines, working papers should provide: Documentation of information obtained about the area being reviewed; Authoritative support for findings and recommendations contained in the audit report; Uniformity to the audit process; A means of evaluation - both in performance reviews and quality assurance reviews;. A guide for subsequent audits. General guidelines for the preparation of working papers are: Completeness and Accuracy - workpapers should be complete, accurate, and support observations, testing, conclusions, and recommendations. They should also show the nature and scope of the work performed. Clarity and Understanding - working papers should be clear and understandable without supplementary oral explanations. With the information the working papers reveal, a reviewer should be able to readily determine their purpose, the nature and scope of the work done and the preparer's conclusions. Pertinence - information contained in working papers should be limited to matters that are important and necessary to support the objectives and scope established for the assignment.
The auditing procedures performed, the information obtained, and the conclusions reached. Similarly, the, codification of Statements on Auditing Standards, published by the aicpa (au section 319.26). The auditor should document the understanding of the client's internal control structure elements obtained to plan the audit. The form and extent of this documentation is influenced by the size and complexity of the operation, as well as the nature of the internal control structure. For example, documentation of the understanding of the internal control structure of a large, complex operation may include flowcharts, questionnaires, or decision tables. For a smaller operation, however, documentation in the form of a memorandum may be sufficient. Generally, the more complex the internal control structure and the more extensive the procedures performed, the more extensive the auditor's documentation should.
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Where papers are intended to agree with or support items appearing in the financial statements, or in other working papers in the file, the auditor should normally prepare them so as to make such agreements obvious without the necessity of further investigation and reconciliation. Working Paper Documentation, effective date: 03/24/1997, internal Audit Polices and Procedures. Chapter 15 - working Paper Documentation. General, proper working papers demonstrate professionalism and document the work that was done from the preliminary stages of a project audit minute through the final report. Audit working papers also show whether due professional care was exercised and illustrate compliance with professional auditing standards. This section of the manual contains characteristics of well-organized and documented working papers and should be used in evaluating the adequacy of working papers.
Careful documentation of work performed is necessary to support the findings, recommendations, and opinions contained in the final audit report or close-out letter. Professional Standards, the degree of documentation is based on the judgment of the individuals responsible for forming an opinion, the nature of a project, and the adequacy and effectiveness of the system of internal controls. Guidance regarding exercise of judgment relating to working papers is found in several professional standards. The, codification of Standards for The Professional Practice of Internal Auditing, section 420.5.b states: The organization, design, and content of audit working papers will depend on the nature of the audit. Audit working papers should, however, document the following aspects of the audit process: Planning. The examination and evaluation of the adequacy and effectiveness of the system of internal controls.
The working paper should be clearly referenced so that it can be filed appropriately and found easily when required at a later date. It should be signed by the person who prepares it so that queries can be directed to the appropriate person. It should be signed and dated by any person who reviews it, in order to meet the quality control requirements of the review. The reviewer of audit working papers should ensure that every paper has these characteristics. If any relevant characteristic is judged absent, then this should result in an audit review point (ie a comment by the reviewer directing the original preparer to rectify the fault on the working paper). Conclusion working papers provide evidence that an effective, efficient, and economic audit has been carried out.
They should therefore be prepared with care and skill. They should be sufficiently detailed and complete so that an auditor with no previous experience of that audit can understand the working papers in terms of the work completed, the conclusions reached, and the reasoning behind these conclusions. Notes isa 230 (revised) became effective for audits of financial information for periods beginning on or after It resulted in conforming amendments to isa 200, isa 330, and isqc. These conforming amendments are set out in the appendices to those standards. Those shown in bold in the text of the isa. Paragraph 26 of isa 220 establishes the requirement for the auditor to review the audit work performed through review of the documentation, which involves the auditor documenting the extent and timing of the reviews. Paragraph 25 of ias 220 describes the nature of a review of work performed. Each audit firm has its own file numbering and referencing system. Within each system, the best way of numbering working papers is to file them serially in each section and to cross-reference them.
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It should fully state the year/period end (eg so that the working paper is not confused with documentation belonging to a different year/period. It should state the full extent of the test (ie how many items were tested and how this number was determined). This will enable the preparer, and any subsequent reviewers, to determine the sufficiency of the audit evidence provided by the working paper. Where there is necessary reference to another working paper, the full reference of that other working paper must be diary given. A statement that details of testing can be found on another working paper is insufficient. The working paper should clearly and objectively state the results of the test, without bias, and based on the facts documented. The conclusions reached should be consistent with the results of the test and should be able to withstand independent scrutiny.
Papers prepared by client certain working papers required by the auditor may have already been prepared by client staff. The auditor should make arrangements, whenever possible, for copies of these to be made available to the audit essays team. If client staff prepare working papers which are to be retained by the auditor, the auditor should agree the form of the working papers with client staff at an early stage in the audit, and include this information in the audit timetable. When arranging for working papers to be prepared, the auditor should take care to ensure that the working papers will give all the information required. All such working papers should normally be clearly identified as having been prepared by the client. The member of audit staff directly responsible for an audit area in which working papers prepared by client staff are included should sign those papers this will show that they have been checked and that they can be reviewed by the manager and the partner. The signature of the audit team member indicates that the working paper (prepared by client staff) has been audited. Some characteristics oood working paper on the basis of the discussion above, a good working paper should meet the requirements of isa 230 by displaying the following characteristics: It should state a clear audit objective, usually in terms of an audit assertion (for example,.
and for whom they were. When exceptional circumstances arise after the date of the auditors report that require the auditor to perform new or additional audit procedures, or that lead the auditor to reach new conclusions, the auditor should document: the circumstances encountered the new or additional audit procedures performed. These standards guide the auditor to produce audit documentation that is of an acceptable standard. Understanding and applying the standards will protect the auditor from unwelcome and unnecessary litigation. Isa 230 (revised) is more comprehensive than its predecessor and is likely to prove very useful. Importance of working papers, working papers are important because they: are necessary for audit quality control purposes provide assurance that the work delegated by the audit partner has been properly completed provide evidence that an effective audit has been carried out increase the economy, efficiency. Before deciding to prepare a particular audit working paper, the auditor should be satisfied that it is: necessary either because it will serve an essential or useful purpose in support of the auditors report, or because it will provide information needed for tax or other. Content, each audit working paper must be headed with the following information: The name of the client, the period covered by the audit. The subject matter, the file reference (4) The initials (signature) of the member of staff who prepared the working paper, and the date on which it was prepared In the case of audit papers prepared by client staff, the date the working papers were received.
These standards (2) are as follows: The auditor should prepare, on a timely basis, audit documentation that provides: a sufficient appropriate record of the basis for the auditors report, and evidence that the audit was performed in accordance with isas and applicable legal and regulatory. The auditor should prepare the audit documentation so as to enable an experienced auditor, having no previous connection with the audit, to understand: the nature, timing, and extent of the audit procedures performed to comply with isas and applicable legal and regulatory requirements the results. In documenting the nature, timing, and extent of audit procedures performed, the auditor should record the identifying characteristics roles of the specific items or matters being tested. The auditor should document discussions of significant matters with management and others on a timely basis. If the auditor has identified information that contradicts or is inconsistent with the auditors final conclusion regarding a significant matter, the auditor should document how the auditor addressed the contradictions or inconsistency in forming the final conclusion. Where, in exceptional circumstances, the auditor judges it necessary to depart from a basic principle or an essential procedure that is relevant in the circumstances of the audit, the auditor should document how the alternative audit procedures performed achieve the objective of the audit, and. In documenting the nature, timing, and extent of audit procedures performed, the auditor should record: who performed the audit work and the date such work was completed, and who reviewed the audit work and the date and extent of such review (3). The auditor should complete the assembly of the final audit file on a timely basis after the date of the auditors report. After the assembly of the final audit file has been completed, the auditor should not delete or discard audit documentation before the end of its retention period.
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Relevant to acca qualification Papers F8 and. This article is about audit working apple papers. Auditors should prepare and organise their working papers in a manner that helps the auditor carry out an appropriate audit service. The auditor should avoid preparing or accumulating unnecessary working papers, and should therefore avoid making extensive copies of the clients accounting records. It is worth noting at this stage that it is neither necessary nor practicable for the auditor to document every matter considered during the audit. Audit documentation needs to be understood for both Papers F8 and. The auditing standards, isa 230, audit Documentation (revised) (1) contains the set of standards that deal with working papers.