A set of required elements of the auditor's working document. Documenting the audit
Concept and content of audit documentation
Documenting the audit process is one of the priority factors for its thorough and qualified implementation. Since the purpose of the audit is to confirm the reliability financial statements organization, confirmation of the reality of the accomplishment of any fact is its documentation. Depending on what event is being verified, the complexity of the procedure for documenting it may vary.In accordance with FPSAD N2 “Audit Documentation”, audit documentation refers to working documents and materials prepared by the auditor and for the auditor, or received and stored by him in connection with the audit. Auditor Working Papers may be presented in the form of data recorded on paper, film, electronic or other form.
The audit organization and the individual auditor are required to document all information that is important from the point of view of providing evidence supporting the audit opinion, as well as evidence that the audit was conducted in accordance with federal auditing rules (standards).
The term “documentation” refers to working papers and materials prepared by and for the auditor, or received and maintained by the auditor in connection with the audit. Working documents can be presented in the form of data recorded on paper, photographic film, electronically or in another form (clause 2 of FPSAD No. 2).
The auditor must draw up working documents in a sufficiently complete and detailed form necessary to ensure a general understanding of the audit (clause 5 of FPSAD No. 2).
The auditor must reflect in the working documents information on the planning of the audit work, the nature, time frame and scope of the audit procedures performed, their results, as well as the conclusions drawn on the basis of the audit evidence obtained (clause 6 of the FPSAD No. 2).
The working papers must contain the auditor's justification for all important points, together with the auditor’s conclusions thereon. In cases where the auditor reviewed complex fundamental issues or expressed professional judgment on any issues important to the audit, the working papers should include facts that were known to the auditor at the time of drawing conclusions and the necessary argumentation (clause 6 of FPSAD No. 2 ).
The preparation of auditor working documents is a mandatory element for most stages of the audit.
Classification of auditor's documents
The classification of working papers used in the audit is presented in the table below.
Table. Classification of audit documents.
№ | Classification direction | Classification groups of working documents (WD) |
1 | 2 | 3 |
1 | By purpose of working documents | 1.1. RD for registration of facts 1.2. RD systematization of facts 1.3. RD analysis of facts and indicators 1.4. Final presentation DD 1.5. Combined taxiways |
2 | By type of recorded facts | 2.1. RD reflection of homogeneous (same type) facts 2.2. RD reflection of interrelated facts 2.3. RD for reflecting groups of facts (within the procedure) 2.4. RD for reflecting arbitrary facts |
3 | By type (source of receipt) of registered facts | 3.1. RD for reflecting internal information 3.2. RD for reflecting external information 3.3. RD for reflecting internal and external information |
4 | By type of information confirmation | 4.1. RD for reflecting written (documented) information 4.2. RD for reflecting oral information 4.3. RD for reflecting written and oral information |
5 | By use during inspection | 5.1. RD - grounds (sources) 5.2. RD - data recipients 5.3. Intermediate RD (sources and recipients) |
b | For further use | 6.1, RD of current check 6.2. RD of permanent use |
7 | By formation and design | 7.1. RDs filled in manually 7.2. RD filled out electronically with subsequent printing 7.3. RDs filled out and stored electronically |
8 | By verification stages | 8.1. RD of preliminary acquaintance with the client 8.2. RD for preparation and conclusion of the contract 8.3. RD for drawing up the Inspection Plan and Program 8.4. RD for detailed acquaintance with the client 8.5. RD for adjustments (clarifications, changes) to the Inspection Plan and Program 8.6. RD for conducting substantive checks 8.7. RD for registration of inspection results |
9 | In areas of substantive checks | See table 17 |
The auditor has the right to determine the scope of documentation for each specific audit, guided by his professional opinion.
Reflection in the documentation of every document or issue examined by the auditor during the audit is not necessary. However, the scope of the audit documentation should be such that, if it becomes necessary to transfer the work to another auditor who does not have experience in this engagement, the new auditor could, based solely on this documentation (without resorting to additional conversations or correspondence with the previous auditor, auditor) to understand the work done and the validity of the decisions and conclusions of the previous auditor (clause 7 of FPSAD No. 2).
Form and content of auditor's working documents determined by factors such as:
. the nature of the audit engagement;
. requirements for the auditor's report;
. the nature and complexity of the activity of the audited entity;
. nature and state of systems accounting and internal control of the audited entity;
. the need to give instructions to the auditor’s employees, exercise ongoing control over them and check the work performed by them;
. specific methods and techniques used in the audit process (clause 8 of FPSAD No. 2).
Documents, the creation of which is provided for by acts regulating audit activities in Russian Federation, are included in the working documents of the audit organization without fail.
Forms of working documentation are developed by the audit organization independently, with the exception of those prescribed by acts regulating audit activities in the Russian Federation.
The document must contain a link to the source of information and have an identification number.
The documents included in the working documentation must have the following required details:
. Title of the document;
. name of the economic entity where the audit is carried out;
. the period for which the audit is carried out;
. the date the audit procedure was performed or the document was prepared;
. contents of the document;
. personal signature of the person who created the document and its transcript;
. date of document verification;
. personal signature of the person who checked the document and its transcript.
The extent of working papers depends on the auditor's professional judgment. It is neither necessary nor practical to document every matter considered by the auditor. In particular, it is unacceptable to include in the working documentation copies of properly executed primary documents that do not contain errors and correspond to the business transactions described by these primary documents. Instead of copies of such documents, it is permissible to draw up a summary table indicating the list of verified transactions and make notes on the presence and correctness of the relevant primary documents. In determining the scope of working papers, it would be useful to consider what the other auditor might need to gain an understanding of the work done, the reasons for critical decisions, but not the details of the audit. At the same time, the volume of audit documentation should be such that, if necessary, transfer the work to another auditor who does not have experience in this assignment, he could understand the work done solely on the basis of this documentation (without resorting to additional conversations or correspondence with the previous auditor). work and draw informed conclusions.
The sufficiency of the volume of working documentation is determined by the head of the audit, while the main criteria are the availability of documents confirming the implementation of audit tests on the merits in accordance with the approved audit programs, compliance with the principle of targeted verification, ensuring the possibility of end-to-end tracking (using the cross-reference method) of the correctness (incorrectness) of reporting data.
Working documents are the property of the auditor (clause 14 of FPSAD No. 2).
Copies, including photocopies, of documents of an economic entity may be included in the working documentation of an audit organization only with the consent of this economic entity.
The audit organization is not obliged to provide its working documentation to the economic entity in respect of which the audit was conducted.
The audit organization does not have the right and is not obliged to provide its working documentation to other persons, including tax and other authorities, except in cases expressly provided for by the legislation of the Russian Federation.
The auditor needs to establish appropriate procedures to ensure confidentiality, safety of working documents, as well as for their storage for a sufficient period of time, based on the characteristics of the auditor’s activities, as well as legislative and professional requirements, but not less than 5 years (clause 13 of FPSAD No. 2) .
Play a special role auditor's working papers. Sample Each paper is drawn up in accordance with the rules established in practice. The information contained in the forms is confidential. Let us next consider the main types of auditor working documents.
general characteristics
Auditor's working paper- a paper containing notes made by a specialist during planning the inspection, preparing for its implementation, and summarizing the results. It may also contain information received from third parties, contractors of the inspected enterprise. The quantity is determined individually in each case. The purpose of their design will be of decisive importance.
Purpose
In practice, the following are used auditor working documents:
- By fixed assets. They contain information about the property of the inspected enterprise, its movement, cost, expenses, accounting, receipt and other transactions with valuables.
- To schedule an inspection. They reflect the main stages of the audit.
- Confirming procedures.
- Containing information about the audit of reporting and information summarizing the results.
Working documents are also prepared for:
- compliance with the inspection program and plan.
- Ensuring the validity and legality of inspections.
- Quality control checks.
- Formation of the auditor's report.
- Monitoring the activities of a specialist and justifying remuneration.
- Documentation of the risk identified by the auditor, indicating its value.
Determining factors
The number, content, and forms of documents are selected depending on:
- Specialist qualifications.
- Terms of the contract with the inspected enterprise.
- Previous experience.
- Internal standards and rules that guide the specialist.
Auditor's working paper form
Regardless of the purpose of use, general requirements are imposed on papers. First of all, anyone must reflect complete and specific information. This is necessary to make it easier for another specialist to understand the essence of the activities performed.
Each is processed directly during the verification process. Filling out paperwork after or before the inspection is not permitted. When preparing documentation, the auditor must take into account not only the information that relates to the period being audited, but also information for previous time periods. The papers must contain key data on which the specialist must express an opinion. It is necessary that they cover the most significant areas of the inspection and the tasks set and implemented by the authorized person.
The documentation must allow the reporting to be analyzed according to established criteria. The papers reflect the state and assessment of internal control in the organization, as well as the level of confidence in it. They record the procedures performed related to the verification and analysis of the enterprise’s accounting records, compliance with financial policies, and compliance of reporting with legal standards, principles and requirements.
Information is included in each so that you can later easily understand what is written. A mandatory requirement is to indicate the date and place of registration, and the name of the specialist. The documents must bear the auditor's signature and identification code. The pages are numbered. In addition, the specialist indicates the sources from which he took the information for paperwork, applications recording the business and financial transactions of the enterprise.
Classification
It is carried out according to different criteria. Depending on the period of maintenance and execution, documents can be long-term or short-term use. According to the sources and method of obtaining, papers are divided into those received from third parties or from the inspected enterprise, as well as those prepared by the specialist himself. Depending on the purpose, the documents may be:
- Overview.
- Testing.
- Informative.
- Confirming.
- Comparative.
- Settlement.
- Analytical.
According to the form of submission, graphic, text, tabular and combined forms are distinguished. Depending on the design technique, papers can be handwritten or filled out using a PC.
Auditor Working Papers: Example
The papers that the specialist uses during the audit reflect various information. In accordance with this, papers with data are distinguished:
- Legal nature.
- About the management and employees of the company.
- About the structure and organization of the company.
- About economic fundamentals activities of the enterprise. Such documents describe the company's financial policy.
- About the accounting system. These include reporting, primary papers, etc.
- About organizational and functional tasks. This may include plans, inspection programs, lists of activities and procedures, etc.
- About risk assessment. These include calculations.
- To check individual indicators and articles of the enterprise.
Working documents should also include recommendations and proposals, correspondence from a specialist.
Content Features
The specialist must include in the documentation information about:
- Planning an inspection.
- The nature, timing and volume of activities performed, their results.
- Conclusions that were formulated based on the materials received and analyzed.
The papers must contain a justification for all the key points on which the final opinion will be expressed.
Nuances
- Nature of the task.
- Requirements that the conclusion must meet.
- Features and nature of the activities of the inspected entity.
- Use of control techniques and methods during the inspection.
Working documents are the property of the audit firm. She has the right to perform any actions with them at her own discretion, as long as they do not contradict the law, other norms and professional ethics. Some documents or extracts from them may be presented to the inspected enterprise. But they cannot be a substitute for accounting records.
Storage
After the inspection is completed, the documentation must be submitted to the archive. The papers are bound and placed in folders created separately for each inspection. In the working documentation contained in the “permanent and current dossier” files, the pages are numbered, and their number is indicated on special sheets. Papers of regular customers are stored in one set. Documents in such folders are distributed in chronological order. "Special" and "permanent" files may be transferred from one year to another. The leading specialist or other auditors subordinate to him must mark on the documents the changes, if any, and the date of the adjustments. Entries are confirmed by signatures. The safety of documents, their execution, and their transfer to the archive is ensured by the leading specialist responsible for a specific check.
Additionally
Each document must contain identification parameters. These include, in particular, the name of the inspected person, the inspection period, and so on. In addition, identification indexes, as well as cross-references, must be provided in the papers. This ensures faster compilation of them into files. At the end of each folder, your full name is indicated. responsible employee and his signature. Documentation can be stored on paper or electronic media, as well as on photographic film. The period for keeping papers deposited in the archive is at least five years.
A set of auditor's working papers compiled in accordance with the requirements of International Standards on Auditing (ISA). What previously only the largest audit firms could afford is now available at a more than modest price!
Documenting the audit process is the most important responsibility of auditors! We present to you a unique set of auditor's working papers in Russian, prepared in full compliance with International Standards on Auditing (ISA). Since 2017, audits in Russia must be carried out in accordance with ISA, so this set of working documents will be useful for any audit firm.
Composition of working documents
The total volume of information is about 300 pages in A4 format (see sample documents from sections , , , ).
For convenience, the kit is divided into 6 sections. Sections 1-4 contain samples of working documents, Audit Programs and Lead Schedules (change matrices), and are also supplemented with ready-to-use tables and analytical calculations. Sections 5-6 cover the concepts of “audit sample”, “general population”, discuss the organization of sampling studies, methods for forming an audit sample, provide examples of determining the sample size, analyze the process of assessing the risks of material misstatements, characterize the internal control system, and determine the place and role of the information system , and also provides a list of control procedures.
Working papers presented at Russian and English languages.
Price of a set of auditor's working documents
The price of the set is 15,900 rubles! This is the price for a set in Russian or English language. What previously only large audit firms could afford and what they carefully hid from competitors is now available to any Russian audit firm.
Delivery format
Working documents are supplied in the form of a pdf file containing descriptions and working documents in an easy-to-read form, plus the same book in MS Word format, which allows you to copy tables and letters for their practical use. From April 22, 2016, the delivery also includes a version of documents in MS Excel (in Russian and English).
Video presentation
Auditor's working documentation - These are documents received or produced by the auditor independently in connection with the audit.
To provide evidence on which the auditor's report is based, and to demonstrate that the audit is conducted in accordance with audit rules, auditors are required to create and maintain working papers. In this case, the form of working documentation is developed by the auditor (audit firm) independently, unless otherwise provided by the internal documents of the audit firm. The auditor's working documentation includes:
information concerning organizational structure audited entity;
extracts or copies of documents, agreements and minutes relating to audit issues;
information about the specifics of the financial and economic activities and accounting of the audited entity;
audit plan and strategy;
copies of letters or notes describing the auditor’s work methods;
copies of letters or notes describing significant errors in the operation of internal control, assessment of the risk of internal control;
analysis of business transactions and account balances;
analysis of the main indicators and trends of the organization’s development;
records of the nature, timing and extent of audit procedures performed and their results;
a list of specialists of other profiles involved in checking individual issues under the audit program, the time of its implementation;
a list of procedures performed by other auditors during the audit of branches of the audited entity;
copies of correspondence with other auditors and audit experts;
Explanations, clarifications, statements received from the management of the audited entity;
Written conclusions made by the auditor on the main issues of the audit;
Copies of written messages to property owners about violations of the legislation of the Republic of Belarus, as a result of which harm was or could be caused to an individual or legal entity or the state;
Other documents.
As can be seen from the above list, the list of auditor's working documents is significant.
3.2 Types of working documentation
The generated working documentation can be classified according to various criteria.
Depending on the source of formation, working documentation can be divided:
To one created by the auditor. Working documentation is created by the auditor during the preparation and planning of the audit, during its direct implementation, reflecting the content and scope of audit procedures, as well as when recording the audit results;
Provided by the audited entity. During the verification and confirmation of reporting, the audited entity provides the auditor with various primary documentation to confirm the legality of functioning, business transactions, etc.;
Received from third parties. At the preparation and planning stage, as well as during the audit, the auditor generates information coming from third parties. This may be correspondence with the servicing bank of the audited entity, suppliers, contractors, and other business partners at the request of the auditor.
Depending on the order of regulation, the auditor’s working documentation can be divided into:
Mandatory, the requirement of which is regulated by regulatory legal acts. Such documentation directly includes the audit plan and strategy, the audit contract, etc. In addition, based on the results of the mandatory audit, the audited entity is issued an audit report. These and other documents are considered mandatory auditor working documents;
Formed at the discretion of the auditor. Working documentation generated at the discretion of the auditor includes those documents that are provided for by internal standards, instructions and regulations of the audit organization and can serve in the future to confirm the quality and volume of work performed by auditors (tests, tables, etc.).
Depending on who is provided with the working documentation, it is grouped into the following:
To the management of the audit organization. These are the documents that the management of the audit organization needs to verify and monitor the completeness, correctness and timeliness of the implementation of audit procedures provided for by the audit program;
To the auditor. Documents that are prepared and completed by the auditor during the audit;
Management of the audited entity. This is an analytical report on the results of the audit, an audit report and other documents provided for by the terms of the agreement between the audit organization and the audited entity. Written information contains a report from the audit organization on the results of the audit, is attached to the auditor's report and cannot be considered as a report on all existing shortcomings in the financial and economic activities of the audited entity. Written information indicates deficiencies discovered during a particular audit. The audit report is drawn up in the number of copies agreed upon by the audit organization and the audited entity, but at the same time, the audit organization and the audited entity must receive at least one copy of the audit report and the accounting (financial) statements attached to it;
To the owner. For example, the auditor's report is provided to users of accounting (financial) statements in the manner prescribed by law, including the owner;
To other persons. In cases directly provided for by the legislative acts of the Republic of Belarus, the audit organization must report information about detected errors, dishonest actions and facts of non-compliance with the law to the authorized state bodies specified in the relevant legislative acts.
For each client, the audit organization creates a client folder (“dossier”). When constantly working with a client, such a folder is formed both from those documents that are used by auditors during subsequent audits, and during one specific audit. Based on the nature of use, such auditor working documentation is divided into:
To a continuously running (constant) one. This includes one that remains important for several years, and to which changes are rarely made: copies of constituent documents, information letters from statistical bodies and the social security fund, accounting policies, etc.;
Current. It reflects the organization and conduct of an audit of the client’s accounting (financial) statements for a specific reporting period. It includes organizational (administrative) documents drawn up at the stage of preparation and planning of the audit and completion (registration) of the audit result. This is an audit agreement, a plan, strategy and schedule for the audit, an order (instruction) on approval of the composition of the audit team, business correspondence related to the audit, tests, tables, calculations, graphs and other documents indicating the conduct (implementation ) certain procedures and techniques during the audit;
Special. It is formed in connection with the circumstances and characteristics of the audit - tax documentation, data on compliance with legislation, special regulations, etc.
Documentation is the working papers and materials prepared by and for the auditor or received and maintained by the auditor in connection with the audit (the term “working papers” is sometimes used).
According to ISA 230.7, audit documentation may be presented in the form of data on paper, electronic or other media. It includes, for example, audit programmes, reviews, decision memoranda, reviews of significant matters, letters of confirmation and representations, checklists and correspondence (including email) on significant issues. Extracts or copies of the entity's records, such as significant and specific contracts and agreements, may be included in the audit documentation when appropriate. At the same time, audit documentation cannot replace the entity's accounting records. Audit documentation for a specific audit engagement is collected in the audit file.
Working documents used:
- 1) when planning and conducting an audit;
- 2) when carrying out ongoing monitoring and verification of the work performed by the auditor;
- 3) to record audit evidence obtained in order to confirm the auditor’s opinion.
Requirements for documenting audit procedures are regulated by federal rule (standard) No. 2 “Documentation of an audit”, which establishes uniform requirements for the preparation of documentation in the process of auditing financial (accounting) statements.
The auditor's working papers should be prepared in sufficient detail and detail to provide a general understanding of the audit.
In working papers, the auditor reflects information about the planning of the audit work, the nature, time frame and scope of the audit procedures performed, their results, as well as the conclusions drawn on the basis of the audit evidence obtained.
The working papers should contain the auditor's rationale for all important matters on which professional judgment is required, together with the auditor's conclusions thereon. In cases where the auditor has considered complex issues of principle or has expressed professional judgment on any matters important to the audit, the working papers include the facts that were known to the auditor at the time the conclusions were formulated and the necessary reasoning.
The auditor independently determines the scope of documentation for each specific audit, guided by his professional opinion.
Reflection in the documentation of every document or issue examined by the auditor during the audit is not necessary. In particular, it is unacceptable to include in the working documentation copies of properly executed primary documents that do not contain errors and correspond to the business transactions described by these primary documents. Instead of copies of such documents, it is permissible to compile a summary table indicating the list of verified transactions and marking the presence and correctness of the relevant primary documents.
However, the scope of the audit documentation should be such that, if it becomes necessary to transfer the work to another auditor who does not have experience in this engagement, the new auditor could, based solely on this documentation (without resorting to additional conversations or correspondence with the previous auditor, auditor) to understand the work done and the validity of the decisions and conclusions of the previous auditor:
- (a) the nature, timing and extent of the audit procedures performed to comply with the ISAs and applicable legal and regulatory requirements;
- (b) the results of the audit procedures and audit evidence obtained, and
- (c) significant matters arising during the audit and the conclusions reached thereon.
- 1) the nature of the audit engagement;
- 2) requirements for the audit report;
- 3) the nature and complexity of the audited entity’s activities;
- 4) the nature and condition of the accounting and internal control systems of the audited entity;
- 5) the need to give instructions to the auditor’s employees, exercise ongoing control over them and check the work performed by them;
- 6) specific methods and techniques used in the audit process.
In preparing working papers regarding the nature, timing, and extent of the audit procedures performed, the auditor should document the defining characteristics of the specific items or significant matters tested. Documenting defining characteristics serves several purposes. For example, it allows the audit team to be accountable for its work and provides an opportunity to review any exceptions or inconsistencies.
Defining Characteristics |
Significant Issues |
When performing detailed testing of purchase orders prepared by an entity, the auditor may select documents to test based on date and unique purchase order numbers. |
Matters that pose significant risks (in accordance with ISA 315, Knowing the Entity and Its Environment and Assessing the Risks of Material Misstatement) |
When performing procedures that require the selection or review of all items above a certain amount from a selected population, the auditor may document the scope of the procedure and the definition of the population (for example, all journal entries above a certain amount from the accounting ledger) |
Findings of audit procedures indicating:
|
When performing procedures that require systematic sampling from a population of documents, the auditor can identify the selected documents by their source, reference point and sampling interval |
Circumstances that may cause significant difficulty in the auditor's performance of required audit procedures |
When performing procedures that require interviewing specific entity personnel, the auditor may document the dates of interviews and the names and positions of entity personnel. |
Conclusions that may lead to modification of the audit report (conclusion) |
When performing observation procedures, the auditor may document the process or subject matter being observed, the persons involved, their responsibilities, and the time and location of the observation. |
In addition, according to ISA 230, the auditor cannot, but must:
- (a) timely document discussions of significant issues with the entity's management and other persons;
- (b) document your actions to resolve contradictions or disagreements when forming a final conclusion;
- (c) complete the final audit file in a timely manner after the date of the audit report.
Working documents are systematized depending on the circumstances of each specific audit and the needs of the auditor during its conduct. Under development standard forms documentation, for example, the standard structure of the audit file (folder) of working documents, forms, questionnaires, standard letters and appeals, etc. Such standardization makes it easier to assign work to subordinates and at the same time allows for reliable control over the results of the work they perform. Charts, analytical and other documentation prepared by the audited entity may be used. In these cases, the auditor is required to ensure that such materials are prepared appropriately.
Once the final audit file has been completed, the auditor should not delete or remove audit documentation until the end of the retention period. In accordance with ISQC 1, for audit engagement working papers, the retention period is generally not less than five years from the date of the auditor's report or the date of the auditor's report on the consolidated financial statements.