AUDIT DOCUMENTATION SA 230

• AUDIT DOCUMENTATION SA 230
  CONTEMPORARY AUDITING
  AUDITING AND ASSURANCE
• MEANING OF AUDIT DOCUMENTATION
• AUDIT DOCUMENTATION  ( WORKING PAPERS)DEFINES THE TERM AUDIT DOCUMENTATION AS TO THE RECORD OF :-

1. AUDIT PROCEDURES PERFORMED
2. RELEVANT AUDIT EVIDENCE OBTAINED
3. CONCLUSIONS THE AUDITOR REACHED

·         NATURE OF AUDIT DOCUMENTATION:

·         PROVIDES :

1. A SUFFICIENT AND APPROPRIATE RECORD OF THE BASIS FOR THE AUDITOR’S REPORT
2. EVIDENCE THAT THE AUDIT WAS PLANNED AND PERFORMED IN ACCORDANCE WITH THE SAS AND APPLICABLE AND OTHER REGULATORY REQUIREMENTS
3. PURPOSE OF AUDIT DOCUMENTATION
4. ASSISTING THE ENGAGEMENT TEAM TO PLAN AND PERFORM THE AUDIT
5. ASSISTING MEMBERS OF THE ENGAGEMENT TEAM RESPONSIBLE FOR SUPERVISION TO DIRECT AND SUPERVISE THE AUDIT AND TO DISCHARGE THEIR REVIEW RESPONSIBILITIES
6. ENABLING THE ENGAGEMENT TEAM TO BE  ACCOUNTABLE FOR ITS WORK
7. RETAINING A RECORD OF MATTERS OF CONTINUING SIGNIFICANCE TO FUTURE AUDITS
8. ENABLING THE CONDUCT OF QUALITY CONTROL REVIEWS AND INSPECTIONS
9. ENABLING THE CONDUCT OF EXTERNAL INSPECTION IN ACCORDANCE WITH APPLICABLE LEGAL REGULATORY OR OTHER REQUIREMENTS

• FORM,CONTENT AND EXTENT OF AUDIT DOCUMENTATION
• THE AUDITOR SHALL PREPARE AUDIT DOCUMENTATION THAT IS SUFFICIENT TO ENABLE AN EXPERIENCED AUDITOR TO UNDERSTAND:-

1. THE NATURE,TIMING AND EXTENT OF AUDIT PROCEDURES
2. THE RESULT OF THE AUDIT PROCEDURES PERFORMED AND THE AUDIT EVIDENCE OBTAINED
3. SIGNIFICANT MATTERS ARISING DURING THE AUDIT AND CONCLUSIONS REACHED THERON,SIGNIFICANT PROFESSIONAL JUDGMENT MADE IN REACHING THOSE CONCLUSIONS

• DOCUMENTATION OF SIGNIFICANT MATTERS AND RELATED SIGNIFICANT PROFESSIONAL JUDGMENTS:
• MATTERS THAT GIVE RISE TO SIGNIFICANT RISK AS DEFINED IN SA 315
• RESULTS OF AUDIT PROCEDUES INDICATING :

1.     THAT THE FINANCIAL STATEMENTS COULD BE MATERIALLY MISSTATED OR

2.     NEED TO REVISE THE AUDITOR’S PREVIOUS ASSESSMENT OF THE RISKS OF MATERIAL MISSTATEMENT AND AUDITOR’S RESPONSE TO THOSE RISK

3.     CIRCUMSTANCES THAT CAUSES THE AUDITOR SIGNIFICANTLY DIFFICULTY IN APPLYING NECESSARY AUDIT PROCEDURES

4.     FINDING THAT COULD RESULT IN A MODIFICATION TO THE AUDIT OPINION OR THE INCLUSION OF AN EMPHASIS OF MATTER PARAGRAPH IN THE AUDITOR’S REPORT

5.     DOCUMENTATION OF SIGNIFICANT MATTERS AND RELATED SIGNIFICANT PROFESSIONAL JUDGMENTS:

6.     SERVE AS EXPLANATION THE AUDITOR’S CONCLUSIONS AND TO REINFORCE THE QUALITY OF THE JUDGMENT

• EXAMPLES OF CIRCUMSTANCES IN WHICH IT IS APPROPRIATE TO PREPARE AUDIT DOCUMENTATION RELATING TO THE USE OF PROFESSIONAL JUDGMENT

1. THE RATIONALE FOR THE AUDITOR;S CONCLUSION WHEN A REQUIREMENTS PROVIDES THAT THE AUDITOR SHALL CONSIDER CERTAIN INFORMATION OR FACTORS AND THAT CONSIDERATION IS SIGNIFICANT IN THE CONTEXT OF THE PARTICULAR ENGAGEMENT
2. THE BASIS FOR THE AUDITOR’S CONCLUSIONS ON THE REASONABLENESS OF THE AREAS OF SUBJECTIVITY JUDGMENT
3. THE BASIS FOR THE AUDITOR’S CONCLUSION ABOUT THE AUTHENTICITY OF A DOCUMENT WHEN FURTHER INVESTIGATION

• COMPLETION MEMORANDUM
  ( AUDIT DOCUMENTATION SUMMARY)
• MAY CONSIDER TO PREPARE AND RETAIN AS PART OF THE AUDIT DOCUMENTATION A SUMMARY
•  ( COMPLETION MEMORANDUM) THAT DESCRIBES:-
• THE SIGNIFICANT MATTERS IDENTIFIED DURING THE AUDIT

1. HOW THEY WERE ADDRESSED

2.     SUCH A SUMMARY MAY FACILITATE EFFECTIVE AND EFFICIENT REVIEWS AND INSPECTION OF THE AUDIT DOCUMENTATION PARTICULARLY FOR LARGE AND COMPLEX AUDIT

• FACTORS EFFECTING FORM,CONTENT AND EXTENT OF AUDIT DOCUMENTATION

1. THE SIZE AND COMPLEXITY OF THE ENTITY
2. THE NATURE OF THE AUDIT PROCEDURE TO BE PERFORMED
3. THE IDENTIFIED RISKS OF MATERIAL MISSTATEMENT
4. THE SIGNIFICANCE OF THE AUDIT EVIDENCE OBTAINED
5. THE NATURE AND EXTENT OF EXCEPTIONS IDENTIFIED
6. THE NEED TO DOCUMENT A CONCLUSION OR THE BASIS OR THE CONCLUSION DETERMINABLE FORM THE DOCUMENTATION OF THE WORK PERFORMED OR AUDIT OBTAINED
7. THE AUDIT METHODOLOGY AND TOOLS USED

• EXAMPLES OF AUDIT DOCUMENTATION
• MAY BE RECORDED ON PAPER OR ON ELECTRONICS
• INCLUDE :-

1. AUDIT PROGRAMMES
2. ANALYSES
3. ISSUES MEMORANDA
4. SUMMARIES OF SIGNIFICANT MATTERS
5. LETTER OF CONFIRMATION AND REPRESENTATION
6. CHECKLISTS
7. CORRESPONDENCE

• ASSEMBLY OF FINAL  AUDIT FILE
• MEANING OF AUDIT FILE:-
• ONE OR MORE FOLDERS OR OTHER STORAGE MEDIA IN PHYSICAL OR ELECTRONIC FORM CONTAINING THE RECORDS THAT COMPRISE THE AUDIT DOCUMENTATION FOR SPECIFIC ENGAGEMENT
• REQUIRMENTS

1. THE AUDITOR SHALL ASSEMBLE THE AUDIT DOCUMENTATION IN AN AUDIT FILE AND COMPLETE THE ADMINISTRATIVE PROCESS OF ASSEMBLING THE FINAL AUDIT FILE ON A TIMELY BAISIS AFTER THE DATE OF THE AUDITOR’S REPORT
2. ( WITH IN 60 DAYS AS PER SQC 1)
3. THE COMPLETION OF THE ASSEMBLY OF THE FINAL AUDIT FILE AFTER THAE DATE OF THE AUDITOR’S REPORT IS AN ADMINISTRATIVE PROCESS THAT DOES NOT INVOLVE THE PERFORMANCE OF NEW AUDIT PROCEDURE OR THE DRAWING OF NEW CONCLUSIONS
4. CHANGES MAY BE MADE TO DURING PROCESS:-
5. DELETING OR DISCARDING SUPERSEDED DOCUMENTATION
6. SORTING,COLLATING AND CROSS REFERENCING WORKING PAPERS
7. SIGNING OFF ON COMPLETION CHECKLISTS RELATING TO THE FILE ASSEMBLY PROCESS
8. DOCUMENTING AUDIT EVIDENCE THAT THE AUDITOR HAS OBTAINED,DISCUSSED AND AGREED WITH THE RELEVANT MEMBERS OF THE ENGAGEMENT TEAM BEFORE THE DATE OF THE AUDITOR’S REPORT
9. AFTER THE ASSEMBLY,THE AUDITOR SHALL NOT DELETED AUDIT DOCUMENTATION BEFORE THE END OF ITS RETENTION PERIOD

• RETENTION PERIOD: 7 YEARS FROM THE DATE OF AUDIT REPORT
• OWNERSHIP

1. UNLESS OTHERWISE SPECIFICALLY BY LAW OR REGULATION,ADUIT DOCUMENTATION IS THE PROPERTY OF THE AUDITOR
2. AUDITOR MAY AT THE HIS DISCRETION MAKE PORTION OF OR EXTRACT FROM AUDIT DOCUMENTATION AVAILABLE TO CLIENTS PROVIDED:
3. SUCH DISCLOSURE DOES NOT UNDERMINE THE VALIDITY OF THE WORK PERFORMED OR
4. IN THE CASE OF ASSURANCE ENGAGEMENTS,DOES NOT UNDERMINE THE INDEPENDENCE OF THE AUDITOR OR HIS PERSONNEL