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This goal is accomplished through the identification of control weaknesses, potential process improvements, and positive change opportunities. Audit workpapers facilitate this process by enabling auditors to document work performed from the planning stage to the final closing meeting.
While the organization, design, and content of audit workpapers will vary depending on the nature of the engagement, several important considerations are necessary to the creation of effective, high-quality workpapers.
According to Practice Advisory Document the planning, performance, and review of audit work.
Audit documentation provides written support for planning and scoping decisions, testing methodologies and results, and evidence of review and completion of audit program work steps. In this sense, audit workpapers serve as a tool to help complete a value-added project.
They document what has been done, why it has been done, and how to re-create what has been done. Provide the principal support writing audit workpaper review comments audit communication such as observations, conclusions, and the final report.
Audit workpapers must contain sufficient evidence to support the auditor's assessment. Sufficient information is factual, adequate, and convincing so that a prudent, informed person would reach the same conclusions as the auditor. Sarbanes-Oxley Act of testing and quality reviews performed by internal auditors.
Audit workpapers provide an audit trail that enables a technically competent individual who has no experience with the prior audit to re-perform procedures.
Provide a basis for evaluating the internal audit activity's quality control program. Quality verifications are performed after projects are completed.
Thus, workpapers often are the only tangible representation of the project that can be assessed during the quality review. Audit workpapers serve a variety of purposes and impact many different stakeholders, both within and outside of the internal audit function.
External stakeholders include external auditors and third party reviewers, as mentioned, but also lawyers and judges in cases of insurance claims, lawsuits, and fraud.
Internal auditors should keep these different objectives and stakeholders in mind when preparing workpapers. There are five essential characteristics of high-quality workpapers that all document preparers should consider throughout the audit process.
Ensuring these characteristics are reflected in workpapers is a vital step to achieving workpaper objectives. If a workpaper is separated from the engagement file, readers should be able to ascertain the purpose, work performed, and results based solely on information included on that single workpaper.
Because internal and external parties reviewing audit documentation may only select a sample of files, all individual documents must provide adequate evidence of the work performed. One key to achieving complete workpapers is to prepare audit documentation timely.
A long time lag between performance and documentation of work generally results in a greater chance of excluding key facts and comments.
Additionally, items such as draft reports, open-item lists, sticky notes, and review comments should be removed from the final workpapers, as these indicate incomplete work.
Errors included in final workpapers certainly will shed doubt on the procedures performed and results noted from an internal or external review perspective. One way to verify that workpapers contain accurate computations is to evidence additions of data using defined tick marks and to cross-reference computation data to source documentation.
Auditors should also clearly differentiate statements based on facts from those based on inquiry or matters of judgment. Workpapers should be arranged logically and cross-referenced from source documentation to test grids and audit work steps.
The cross-referencing should extend to an issue summary that links to the audit report, thus clearly communicating the derivation of audit observations. Regardless of these variations, workpapers should include the following key elements: The name and title of the individual providing the documentation should be recorded to facilitate future follow-up questions or audits.
The nature, timing, and extent of procedures performed should be included on each workpaper for completeness. It is also helpful to include a statement describing the purpose of the particular document with respect to the audit objective.
A logical workpaper number cross-referenced to audit program steps and issues should be included. The preparer's signature provides evidence of completion and accountability, which is an essential piece of any third-party quality review.
A concise definition of all tick marks should be included on each audit workpaper or at a central location to clearly describe the work performed during the engagement.
Audit exceptions should be documented and explained clearly on each workpaper using logical numbering that cross-references to other workpapers.
The consistent inclusion of these key workpaper elements on all audit documentation improves the efficiency of internal and external review processes.Audit working papers are the documents which record all audit evidence obtained during financial statements auditing, internal management auditing, information systems auditing, and investigations.
Audit working papers are used to support the audit work done in order to provide assurance that the audit was performed in accordance with . In this paper, we describe the audit review process from a persuasion perspective.
This perspective highlights that preparers have, and may take advantage of, opportunities to enhance their reputation by influencing the content and format of audit working papers (i.e. the working papers may be “stylized”).
and present it to the entity’s management for and present it to the entity’s management for audit auditee’sauditee’s comments. ee’s comments. Upon review of such changes by the auditor and the management, the final report should be issued.
ordinarily be in . Audit working papers are the documents which record all audit evidence obtained during financial statements auditing, internal management auditing, information systems auditing, and investigations. Audit working papers are used to support the audit work done in order to provide assurance that the audit was performed in accordance with the relevant auditing standards.
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