Question

In: Accounting

(Auditing Principles & Procedures) List the functions of audit documentation?explan each one. NO HAND WRITE PLZ,...

(Auditing Principles & Procedures)

List the functions of audit documentation?explan each one.

NO HAND WRITE PLZ, Thank you.

Solutions

Expert Solution

Ans:

"Documentation" refers to the working papers prepared or obtained by the auditor and retained by him in connection with the performence of his audit. Working papers should record, the audit plan, the nature, timing and extent of auditing procedures performed and the conclusions drawn.

The following are the different functions which are performed to prepare audit documentation.

1. Form, Content and Extent of Audit documentation:

a) The auditor shall prepare audit documentation that is sufficient to enable an experienced auditor, having no previous conneciton with the audit, to understand.

b) The nature, timing, and extent of the audit procedures performed to comply with the SAs and applicable legal and regulatory requirements.

c) The results of the audit procedures performed and audit evidence obtained; and

d) Significant matters arising during the audit, the conclusions reached thereon, and signigicant professional judgements made in reaching those conclusions.

2. Preparation of Working papers:

Follwing care should be taken while preparing for working papers,

  • Working papers should be designed and properly organized to meet the circumstances of each audit and auditor's needs.
  • They should be standardized to facilitate delegation and control of work.
  • They should be adequately complete and detailed so as to enable the auditor to have an overall understanding of the audit.
  • All significant matters, which require the excercise of judgement and the auditor's conclusion as regards them, should be included in working papers.

3. Maintaining the Contents of Worknig papers:

  • Client's name
  • Type of engagement
  • Nature of client's business
  • Degree of reliance on internal control
  • procedure applied
  • Tests performed
  • Information obtained
  • Important conclusions reached
  • Supervision and review of work performed by assistant.

4. Audit completion memorandum:

The auditor may consider it helpful to prepare and retain as part of audit documentation a summary(sometimes known as a completion memorandum) that describes the significant matters identified during the audit and how they were addressed, or that includes cross-references to other relavant supporting documentation that provides such information. Such a summary may facilitate effective and efficient reviews and inspections of the audit documentation, particularly for large and complex audits.

5. Documentation of Departures from basic principles or essential procedures:

Where, in exceptional circumstances, the auditor judges it necessary to depart from 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 unless otherwise clear, the reasons for the departure. This involves the auditor documenting below the alternative audit procedures performed were sufficient and appropriate to replace that basic principle or essential procedure.


Related Solutions

(Auditing Principles & Procedures) List the steps in the audit of internal control over financial reporting...
(Auditing Principles & Procedures) List the steps in the audit of internal control over financial reporting (ICFR) , Explan each one. NO HAND WRITER PLZ, Thank you.
(Auditing Principles & Procedures) Case Study Assume that you are an audit manager for Haya &...
(Auditing Principles & Procedures) Case Study Assume that you are an audit manager for Haya & Partners Certified Public Accountants, a firm that has recently gained two new audit clients of a similar size. Your audit staff have completed their preliminary investigations of the two clients. You are reviewing their notes which can be summarized as follows: - Client 1 Norah is an old-fashioned family company which has been in business for over a thirty years and trades as wholesalers...
(Auditing Principles & Procedures) Define corporate governance, the board of directors, and the audit committee and...
(Auditing Principles & Procedures) Define corporate governance, the board of directors, and the audit committee and explain how they relate to each other.
(Auditing Principles & Procedures) List the information that must be mentioned in an engagement letter? What...
(Auditing Principles & Procedures) List the information that must be mentioned in an engagement letter? What is Engagement risk?
1. List the functions of audit documentation. 2. Explain the Concept of Audit Sampling? 3. Explain...
1. List the functions of audit documentation. 2. Explain the Concept of Audit Sampling? 3. Explain the major class of transactions in the Revenue process
The audit documentation is another of the International Standards for Auditing and Auditing Evidence. What do...
The audit documentation is another of the International Standards for Auditing and Auditing Evidence. What do you know about the standards? Explain the details.
What are the procedures in auditing cash? Which audit objective does each procedure relate to?
What are the procedures in auditing cash? Which audit objective does each procedure relate to?
Describe the essential parts of the relationship between Clinical documentation improvement, the principles of auditing, and...
Describe the essential parts of the relationship between Clinical documentation improvement, the principles of auditing, and quality coding practices.
You are auditing and testing the audit-related objective of Completeness. Which of the following audit procedures...
You are auditing and testing the audit-related objective of Completeness. Which of the following audit procedures is most likely to achieve your objective: A.Inspection of supporting vendor invoices. B. Physical examination of assets from the fixed asset ledger. C.Inspection of vendor invoices for closely related accounts such as repairs and maintenance. D. Independent confirmation of current year additions.
For each of the following audit procedures, identify the audit objective, a – e, that the...
For each of the following audit procedures, identify the audit objective, a – e, that the procedure will be most likely to achieve. The audit objective may be used once, more than once, or not at all. While a procedure may meet more than one audit objective, you need only identify one audit objective per procedure. Existence or Occurrence. Rights or Obligation. Valuation. Cutoff Completeness. Presentation. Trace a sample of shipping documents to recorded sales transactions. Send standard bank confirmation...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT