7/27/2019 Preparing Audit Documentation Pt 1

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Performance Support—Preparing AuditDocumentation

The information in this performance support is provided to help you prepare audit documentation

for all of your audit work throughout the engagement – from planning and controls to substantive procedures. This document discusses the importance of why all work needs to be documented,

details what to document in your working papers, defines review notes, provides guidance and procedures for clearing review notes, and tips on how to safeguard your audit documentation.

This performance support will cover the following topics (click on a link to go to the topic):

•  WHY DO YOU DOCUMENT YOUR WORK? 

•  WHAT NEEDS TO BE DOCUMENTED? 

o  Details of Work Performed Illustration 

o  Referencing and Symbol Illustration 

o  Tickmark Worksheet Illustration 

•  WHAT IS A REVIEW NOTE AND HOW DO I DEALWITH IT? o  Review Note Illustration – Template o  Review Note Illustration – Excel 

•  WHAT DOES IT MEAN TO SAFEGUARD MY AUDIT DOCUMENTATION? 

WHY DO YOU DOCUMENT YOUR WORK?

Documentation is a key part of our audit; it provides support for the audit opinion given on the

financial statements and is evidence of the work we have done. Our documentation should bedetailed enough to enable an experienced auditor, having no previous connection with the audit,

to understand the nature, timing, and extent of the audit procedures performed, the results of theaudit procedures performed, the audit evidence obtained, any significant matters arising during

the audit, and conclusions reached.

If you do not document your work properly, then the audit field senior or audit manager may

think that you have not understood your assignment or have not completed the audit procedures.Proper documentation will also help to reduce the amount of review notes (review notes are

described later in this performance support) you receive, as your work will be easier to follow,

and you will not have to spend time amending poor documentation. Documentation prepared at

the time the work is performed is likely to be more accurate than documentation prepared

subsequently, therefore audit documentation should be prepared on a timely basis.

The regulatory environment has become more rigorous over time, with the auditing standards we

need to comply with becoming stricter. Proper and timely documentation of the work performed

is the best way to demonstrate compliance with these regulations and standards.

A common view to documentation is “if it‟s not documented, it‟s not done.” 

For further information, refer to the Audit Approach Manual (AAM) P020: Prepare and Control

Audit Documentation and P040: Review of Audit Documentation.

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WHAT NEEDS TO BE DOCUMENTED?

Audit documentation is the record of audit procedures performed, relevant audit evidence

obtained, and conclusions the auditor reached (terms such as “working papers” or “workpapers”

are also sometimes used. The term refers to both electronic (Word, Excel, documents) andmanual (hard copy paper) documents. The terms „working papers‟ or „workpapers‟ are also

sometimes used.

Your audit documentation would typically include the following:

•  Identify the audit engagement. This means stating the entity name and period end (e.g.,XYZ Company, year ended December 31, 2012).

•  Who performed the work 

•  Audit documentation needs to have a preparer signoff. This means that any review noteson the work can be directed to the appropriate person, even if the audit fieldwork has

 been finished.

•  You will also need to sign off the detailed audit procedure(s) in the Risk Assessment andAudit Plan (RAAP) and Model Audit Program (MAP), including references to the audit

documentation where the testing was performed.

•  When you sign off on a working paper within , you also need to update the header andfooter to ensure the signoff is updated in the document. You can update the headers and

footers for all documents at once using the Document Manager button. Click on Refresh Documents and select Update headers and footers.

•  When the work was performed

•  The date the work was performed will allow the reviewer to establish a timeline for theaudit. If audit work is done in stages (e.g., partial testing at interim and completion of 

testing of the risks at year-end), or if subsequent events occur, it will be clear when theinitial work was performed and what evidence was available at that time. This isespecially important if there is more than one audit visit, or if an audit takes place over 

several months.

o  For example, you have performed audit procedures for the inventory balance at the

year-end on 31 December, attending the entity‟s inventory count and found no errors.Two weeks later, the warehouse burns down and the entire inventory is destroyed.

By dating your work, the field senior can tell that it was performed before the fire and

thus needs to be updated for this subsequent event.

•  Details of the work performed

•  The audit documentation should also state the risk that is being addressed, the audit procedures performed, and the results of the audit testing performed on the identified

risks. The substantive procedures to perform can be found in the Model Audit Programs, both regarding test of controls and substantive procedures to address the risks identified.

•  Click on the link (by holding down the Ctrl key) to be taken to Details of Work Performed Illustration.

•  A key/legend to any symbols/highlighting used in the audit documentation.