Topics: Auditing, Internal control, Audit Pages: 13 (2104 words) Published: August 14, 2013
Audit Documentation
1. Main evidence of procedures, work performed on audit
2. Prepare sufficient & appropriate audit documentation on timely basis 3. enhance audit quality
4. facilitate effective review
5. evaluate audit evidence obtained & conclusions reached before finalizing auditor’s report 6. assisting audit team plan & perform for audit
7. assist audit team members’ supervise & direct audit work, discharge responsibilities (Quality Control for an Audit) 8. enable team account for its work
9. retain record (continuing significant matters) future audits 10. enable experienced auditor conduct engagement QC reviews & inspections 11. enable conducting external inspections with applicable legal, regulatory requirements Types of audit documentation

1. audit strategy, audit plan
2. audit programs
3. analysis, analytical procedures worksheets
4. internal control questionnaires, evaluation questionnaires 5. significant matters’ summaries
6. confirmation letters (for trade receivable confirmation) 7. representation letters
8. checklists
9. correspondence concerning significant matters
10. copies: entity’s records, e.g. contracts, agreements

Form, content
1. using standard schedules, computer program
standard audit program
standard internal control questionnaire
standard audit file structure

Permanent file
* document continuous important materials, info relevant to audit entity’s financial statements

1. permanent file index, checklist
2. admin. Info
primary client’s contact, position, audit location, approximate audit time each year

3. special instruction, agreement with entity
reporting deadline, group audit instruction in common

4. engagement letter’s copy, amendments, updates

5. current files’ list maintained for entity

6. entity’s general background
group structure (subsidiaries’ name, associates, JV)
brief history, operation’s place
business, products, services’ description
list: directors, company secretaries, shareholders, services contacts
retirement plan (MPF, scheme under Occupation retirement Ordinance), employee benefit plan (share option scheme, medical scheme)
list: bankers, solicitors, IT consultants
registered office’ s address, incorporation place
list: major suppliers, customers, related parties
list: major properties, assets held by entity

7. statutory materials (M & A’s copy, articles of association)

8. share capital history, reserves

9. important agreements’ copies
bank facilities letters
loan agreements
tenancy agreements
title deed
patent, trademark agreement
insurance contracts

10. list: laws & regulation (Securities Ordinance, Banking Ordinance) 11. list: important accounting matters
12. notes: meeting, interview, correspondences
13. summary: internal audit functions, internal auditors’ reports 14. system documentation: control environment, internal control narrative & evaluation 15. letters to management (regarding internal control, systems in previous years) 16. entity’s previous years’ audited, signed financial statements

Current File
* info, matter relevant for current year
1. file index
2. overall audit strategy, plan
3. audit program with tailored-made audit procedures
4. audited, signed, approved financial statements by BoD 5. audit report
6. mgt representation letter
7. letter to mgt, their reply / resolution
8. representation on directors’ remuneration
9. entity’s Trial balance, mgt accounts, journal adjustments, budget 10. each B/S items’ schedules with audit procedures performed, findings, conclusions 11. each I/S items’ schedules with audit procedures performed, findings, conclusions 12. Disclosure checklist comply with Companies Ordinance, HKFRSs,...
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