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Documentation SA 230 R

SA 230 (Revised) outlines the definition, objectives, and organization of audit working papers, which serve as essential documentation for auditors. These papers include evidence of audit procedures, conclusions, and significant matters, enabling accountability and quality control. The document also distinguishes between permanent and current audit files, detailing their respective contents.

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5 views

Documentation SA 230 R

SA 230 (Revised) outlines the definition, objectives, and organization of audit working papers, which serve as essential documentation for auditors. These papers include evidence of audit procedures, conclusions, and significant matters, enabling accountability and quality control. The document also distinguishes between permanent and current audit files, detailing their respective contents.

Uploaded by

tanaydhanuka41
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DOCUMENTATION: SA 230

(Revised)
• Definition/Meaning
• Objectives
• Advantages
• Desirable Characteristics of Working Papers
• Organization of Audit Files
• Ownership
• Lien
Documentation = Audit Working Papers
✔ Audit working papers “constitute all
documents prepared or obtained or retained
by the auditor during the audit and the audit
conclusions.
✔ Audit working papers are the connecting
link between the client’s accounting records
and the auditor’s report.
✔ Audit Working papers are the written
records kept by the auditor of: (1) the
evidence accumulated during the course of
audit, (2) the methods and procedures
followed and (3) the conclusions reached .
They include all information that the auditor
considers necessary to adequately conduct
Objectives/Utility of Working papers
Principal Objectives: Serve as auditor’s principal
record of work performed and conclusions reached
regarding significant matters.

✔ Provide evidence of the auditor’s basis for a


conclusion about the achievement of overall
objectives of the auditor .

✔ Provide evidence that the audit was planned and


performed in accordance with standards on auditing
and applicable legal and regulatory requirements.
Other Objectives
✔ Assisting the audit team to plan and perform the
audit.
✔ Assisting the members of the audit team responsible
for supervision to direct and supervise the audit
work, and to discharge their review responsibilities
in accordance with Quality Control for Audits
✔ Enabling the audit team to be accountable for work.
✔ Retaining a record of matters of continuing
significance for future audits.
✔ Enabling an experienced auditor to conduct quality
control reviews and inspections in accordance with
standards of auditing generally accepted in India.
✔ Enabling the experienced auditor to conduct
external inspection in accordance with applicable
legal, regulatory and other requirements.
Form, Content and Extent of documentation
(a) The auditor shall prepare audit documentation that is
sufficient to enable an experienced auditor, having no
previous connection with the audit, to understand –

⚫ The nature, timing and extent of audit procedures


performed to comply with the SAs and applicable
legal and regulatory requirements.

⚫ The result of the audit procedures performed, and the


audit evidence obtained.

⚫ Significant matters arising during the audit, the


conclusions reached thereon and significant
professional judgments made in reaching those
conclusions.
Form, Content and Extent of documentation
(b) In documenting the nature, timing and extent of audit
procedures performed, the auditor shall record:

✔ The identifying characteristics of the specific items or


matters tested.

✔ Who performed the audit work and the date on which


such work was completed.

✔ Who reviewed the audit work performed and the date


and extent of such review.
Content of Working Papers
Working papers should state:

❑ Client’s Name
❑ Type of Engagement
❑ Nature of Client’s Business
❑ Degree of reliance on Internal Controls
❑ Sources of Information
❑ Conclusion Reached
❑ Supervision and Review of Work performed by
Assistants
Filing of Working Papers

Audit Files

Permanent Files Current Files

In case of recurring audits, some working paper files


may be classified as “ Permanent Audit Files” which are
updated with information of continuing importance to
succeeding audits, as distinct from “Current Audit
Files” which contain information relating primarily to
the audit of a single period.
Content of Permanent Files
❑ Memorandum and Articles of association of the
Company.
❑ By-laws or Regulations in case of Society or Co-
operative Society
❑ Record of Study and Evaluation of Internal Control.
❑ Copies of audited Financial Statements of previous
years.
❑ Record of communication with retiring auditor.
❑ Notes regarding significant accounting policies
❑ Important Audit Observations of previous years.
Content of Current Files
❑ Correspondence relating to acceptance of annual
appointments
❑ Minutes of meetings of Board of Directors or Executive
Committee.
❑ Audit programme
❑ Evidence of work performer by the assistants and
reviewed by seniors.
❑ Communication with client regarding audit matter.
❑ Letters of Representation
❑ Confirmation from clients and third parties.
❑ Conclusion reached about significant aspects of audit.

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