Audit Working Papers

Audit working papers are the outcome of the documentation process. Working papers are the record of various audit procedures performed, audit evidence obtained, allocation of work between audit team members etc. Audit working papers are the documents and evidence that an auditor collects and retains with himself during the audit.

Audit working papers support the work that the auditor performs for providing assurance that he conducts the audit in accordance with all the applicable standards on auditing (SA’s).

They constitute all the audit evidence that an auditor obtains. Also, it contains various procedures that he applies to indicate that the audit is performed by him.

The auditor and his audit team members prepare the audit working papers while performing the audit. Working papers are connecting link between the client’s records and audited financial statements.

Working papers provide entity’s historical records as well as matters which should be taken care and given due importance while performing future audit’s of such entity.

Audit working papers help auditor in audit planning and collecting evidence of the audit work performed on which his opinion is based.

Working papers helps auditor in allocating the time required for performing various audit procedures. The working paper helps auditor to maintain a record of various matters discussed with management while conducting an audit.

Also, the working papers help audit team members to understand entity’s business, points which they need to check on a priority basis, queries and actions against them in previous audits. Working papers helps auditor in future cases to protect himself if the client files a suit against auditor for auditor’s negligence while conducting the audit.

Working papers provide information on the following matters

• Information about audit team members and work allocated to them. Information regarding unallocated work
• Whether he follows all the applicable standards on auditing (SA’s) or not
• He properly plans the audit or not
• Whether there was proper supervision over the work performed. Enabling the audit team members to be responsible for the work performed by them
• An auditor undertakes an appropriate review or not
• Whether the evidence is relevant, sufficient and appropriate to support the opinion of the auditor

We can divide the working papers into two parts

• Permanent audit file
• Current audit file

A permanent audit file contains information which is of continuous interest and is relevant in future audits. Information like articles of association, loan agreements, leases, documents related to internal control of the entity, record of accounting policies followed by the entity on a continuous basis, significant observations of previous audits etc.

A current audit file contains information regarding audit conducted for the current period. It includes information like financial statements and audit report of the entity, trial balance and worksheets, records regarding internal control risk of an entity, external confirmations received, queries of auditor and reply received from the management etc.

Examples of Audit Working Papers

Here is the example of audit working papers:

• Audit documents on client nature of business
• Audit documents of team meeting
• Evidence of the planning process including audit programs and any changes thereto
• Evidence of the auditor’s consideration of the work of internal audit and conclusions reached
• Analyses of transactions and balances
• Analyses of significant ratios and trends
• Identified and assessed risks of material misstatements
• A record of the nature, timing, extent, and results of audit procedures
• Evidence that the work performed was supervised and reviewed
• An indication as to who performed the audit procedures and when they were performed
• Details of audit procedures applied regarding components whose financial statements are audited
• Result of audit testing on depreciation expenses
• Result of audit testing on salaries expenses

Working papers are very important for auditors to support the audit opinion. It proves that auditors perform an audit assignment based on applicable standards, and as well as policy.

These working papers should state the proper information like source of the documents, the period of audit, who prepared the working papers, objective obtained or prepared the working papers and the conclusion.