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In: Accounting

Explain the process of documenting the auditor’s conclusions. What must be documented?

Explain the process of documenting the auditor’s conclusions. What must be documented?

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Answer :

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 working papers are sometimes referred to audit documents that they are very imported part of audit works. These documents are evidence that supports auditors to make their conclusion on the financial statements.

The conclusion should not be a summary of findings, but rather be a clear conclusion against the audit objective. The conclusion has to be expressed using a positive form.

The Items documented are -

  • Engagement letter.
  • Audit programmes defined, with details of work carried out and results filled, including planning memorandum.
  • Analyses of various account balances through comparatives and corroborative.
  • Issues memoranda.
  • Summaries of significant matters.
  • Letters of confirmation and representation.
  • Checklists.
  • Correspondence (including e-mail) concerning significant matters.
  • Abstracts or copies of the entity s records/contracts/ agreements.
  • The auditor shall document discussions of significant matters with management, those charged with governance, and others, including the nature of the significant matters discussed and when and with whom the discussions took place.
  • If the auditor identified information that is inconsistent with the auditor’s final conclusion regarding a significant matter, the auditor shall document how the auditor addressed the inconsistency.

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