AUDIT FILES
can be defined as comprehensive collections of documentation related to an audit engagement ,can also
serve as the evidence which are highly maintained by the auditor.They encompass all materials related
to an audit engagement including planning,execution , reporting phases and client information .
Audit files can be categorized into two types.
1.Permanent files
These contain information that is relevant across multiple audit periods,they help auditors to maintain
continuity and consistency.These files contain company structure,historical financial data,policies and
procedures also prior year audit reports.
2.Current files
They provide hints of audit process for that specific current year.Current files include financial
statements,lead schedules,trial balance and working papers.
WORKING PAPERS
Are details documents or records kept by the auditor that supports the conclusion drawn in the audit
report,they are also considered as the backbone of the audit files.They are very critical in providing
evidence that audit work was conducted in accordance with regulatory and professional standard.
Working papers include lead schedules-these are summarization of account balances and link to
supporting working papers.
Test controls -documents procedures perform to assess the effectiveness of internal controls.
Substantive testing papers-detail tests performed an account balances to verify their accuracy.
Analytical procedures-comparisons and analysis that help identifyunusual trends.
SIGNIFICANCE OF AUDIT FILES AND WORKING PAPERS
1.Evidence and support
Audit files and working papers providethe necessary evidence to support the auditor opinion .They
document the rationale behind audit conclusions and procedures performed,ensuring transparency and
accountability.
2.Quality control
These documents enable internal and external reviwers to assess the quality of the audit work
performed.They serve as basis for quality reviews and inspections by regulatory bodies.
3.Risk management
By conducting documenting findings and analyses,auditors can better identify and assess risks
associated with the client's financial statements.This helps to form a robust audit approach tailored to
the clients specific situation.
4.Compliance with standards
Auditors are required to adhere to various standards (such as GAAS.ISA)that mandate proper
documentation.Audit files and working papers ensure that auditors meet these from potential legal
issues.
5.Facilitating communication
Audit files and working papers improve communication among audit team memmbers.They provide a
shared understanding of the audit progress,findings,and any issues that arise.
6.Learning and Development
Retaining audit files allows firm to build a repository of knowledge over time.Auditors can refer back to
past audits to enhance their understanding and improve future audit strategies.
7.Client interaction
Well organized audit files and comprehensive working papers facilitate discussions with clients.They
provide tangible evidence when discussing findings, recommendations, and any issues identified during
audit.
8.Continuity of work
Incase of stufd turnover or audits over multiple periods, woeking papers are very essential as they
provide continuity ,allowing new auditors to understand past work and decisions .
9.Performance Evaluation
Audit files allow for performance evaluation of audit teams and individual auditors ,contributingto
professional development and improvement.
10.Efficiency in future audits
Past working papers can streamline future audits by providing a reference for recurring issues which
would act as great guide to the directions and processes of the future audit work.
11.Training tools
Audit files and working papers can be used to train new auditors, providing examples of completed
audits and the rationale behind specific audit procedures.
REFERENCES
Institue of Chartered Accountants.2019."Best Practices for Audit Documentation."
Journal of Accountancy.2023."Audit Documentation:A key to Quality Audits".
Accounting tools.2022."Audit Working papers:A Guide for Auditors."
CPA Journal.2020.The importance of Audit Documentation."
Canadian Institute of Chartered Accountants (2010). 20 Questions Directors Should Ask About
Governance Committees, available at:
https://www.cpacanada.ca/en/business-and-accounting-resources/strategy-risk-and-governance/
corporate-governance/publications/20-questions-for-directors-on-governance-committees
Canadian Institute of Chartered Accountants (2005). 20 Questions Directors Should Ask About
Governance Assessments, available at: http://www.yorku.ca/rleblanc/media/20quesGovAssessPub.pdf
Institute of Internal Auditors (2013). IIA position paper: The Three Lines of Defense in Effective Risk
Management and Control, available at:
https://na.theiia.org/standards-guidance/Public Documents/PP The Three Lines of Defense in Effective
Risk Management and Control.pdf
Institute of Internal Auditors (date unknown). The Audit Committee: Internal Audit Oversight, available
at: https://na.theiia.org/about-ia/PublicDocuments/08775_QUALITY-AC_BROCHURE_1_FINAL.pdf
