DOCUMENTATION

Short Questions
1. What are audit working papers?
Ans. Audit working papers are the written, private materials which an
auditor prepares for each audit to describe the accounting information
received from his client, the method of examination used, conclusion
and financial statements prepared.
2. What is the purpose of audit working papers?
Ans. The purpose of audit working papers is to render an information
to form an opinion as regard the object of audit i.e. enabling the
auditor to express his opinion about the truth and fairness of the
assertions made in the financial statements audited.
3. What are the headlines of working papers?
Ans. Working papers should contain the following headlines:
(a) The name of the client;
(b) Accounting year of the audit;
(c) Date of the working papers;
(d) The name of the audit assistant who prepares them;
(e) Description of the aim of the working papers.
4. What is the aim of reviewing working papers?
Ans. The aim of reviewing working papers is to see that:
(a) All work has been carried out as per audit plan;
(b) The audit work is properly recorded;
(c) The audit work was properly carried out;
(d) The conclusions have been correctly drawn.
5. Shortly explain the types of audit files?
Ans.(1) Permanent Audit File: All documents containing background
information about client of permanent nature are filed in the file.
(2) Current Audit File: This file contains the audit programme and
working papers relating to the year under review.
6. Write down any five contents of permanent audit file?
Ans. The following are the contents of permanent audit file:
(1) A list of accounting records;
(2) Internal control questionnaire;
(3) A copy of letter of engagement;
(4) Notes on internal audit;
(5) Statement of reserves.
7. Write factors upon which form, contents and extents of audit
documentation depends?
Ans. The forms, contents and extent of audit documentation depends
on factors such as:
(1) The size and complexity of the entity;
(2) The nature of the audit procedure to be performed;
(3) The identified risks of material misstatement;
(4) The nature and extent of exceptions identified,
8. Write examples of audit documentation?
Ans. Examples of audit documentation are Audit programs, Analyses,
Issues memoranda, Summaries of significant matters, Letters of
confirmation and representation and checklists etc.
9. What documents should be filed in current audit file?
Ans. The following documents and papers are filed on this file:
 (1) Audit timetable, time budget and instructions from clients;
(2) Working papers and relevant sections of audit programe;
(3) Working papers relating to the tests carried out by auditor;
(4) Copies of profit and loss account, and balance sheet;
(5) Copy of trial balance.
10.What are the responsibilities of senior auditor while
documentation?
Ans. Senior auditor evaluates the performance of each audit assistant
on the working papers submitted by him after completion of his
assignment. In this connection the senior auditor checks the
completeness, clarity, arrangements, adequate cross-referencing and
the absence of unnecessary information pertaining to working papers.