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The skill of an accountant can always be ascertained by an inspection of his working papers. Robert H.

Montgomery, Montgomerys Auditing, 1912

Why? Because AAS 3 says so!! Evidence of audit done


Planning and performance of audit Aid in supervision and review Proof of compliance with standards Should be able to refer to it anytime in future

Not documented not done Peer review audit

Clarity and Understanding Completeness and Accuracy Pertinence Logical Arrangement Legibility and Neatness Safety Initial and Date Summary of conclusions

Summarizing of overall findings Writing of queries Discussing with seniors on matters of importance Disposing of Query -at staff level/ senior level/ partner level Working papers to be signed, dated and approved by relevant level of audit staff with sufficient cross reference Depicting the clients name, file number, accounting period, subject of working paper and reference of working paper with current or permanent file

Filing/keeping of working papers Checklist of documents to be obtained and maintained Indexing of documents/ working papers Proper numbering/ sequencing of working papers

As per the excel sheet attached The list has been made specifically for statutory audit

Appointment is to be notified to ROC 23B Request from company to confirm willingness to act as auditors Confirmation to act as auditors and within limits prescribed under 224(1)(b) Intimation by company as appointment Acceptance of appointment Form 23B filing Engagement letter

Understanding the clients business Audit materiality computation


1% of turnover or assets, whichever is relevant

Understanding and testing internal controls


Should obtain a copy of internal audit report on file. Also should obtain a cost audit report on file, if applicable.

Audit strategies memorandum


Scope of engagement Control environment Risks noted during our internal control review Significant events during the year Audit materiality

Lead schedules (Final leading to the main balance sheet) Detailed trial balance summing up to lead schedule Checklists Work papers + supporting documentation + noting of work done on the documents Numbering and cross referencing Signing off by preparer and reviewer

Completion of review points raised by partner Complete set of financial statements with schedules linked to the trial balance disclosure as per revised Schedule VI. Audit report and CARO report Checklists Accounting standards compliances, Schedule VI checklist and CARO checklist completed and signed off by partner Summary review memorandum Letter to management Letter of representation

Scope of engagement Impact of significant events during the year Significant auditing and accounting issues Reasons of major variances in different items of Balance sheet and profit and loss account Internal control weaknesses observed Contingent liabilities and commitments Post balance sheet events Conclusion of audit

Highlighting important issues noted during the course of audit to the management
Accounting and audit issues Internal control issues Recommendations on improvement of existing controls Any other important non compliance

Important value adding services can be rendered by way of letter to management

Management representation
Additional audit evidence Acknowledgement of management of its responsibilities of the financial statements Standard format for representation

Signed copies of financial statements to be on file + signed audit report Signed Letter of representation on file File properly numbered, cross referenced and signed off by partners hard copy filing to complete Soft copies of final financial statements. Audit report and other audit documentation to be stored on final folder on MS Data

Tax audit
Final tax audit report with annexures Tax audit checklist Tax audit work papers

Tax return
Final computation signed off by preparer and partner + tax partner ITR copy ITR acknowdgement signed

Separate file to be prepared for the above Soft copies to be stored on MS data relevant folder