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1、7.Financial ratios758.Task-based simulations879.Classquestions91Audit proceduresbytransaction cycle21AuditEvidenceThe effectofinformationtechnologyontheaudit65Auditdocumentation3Audit evidence,86.Evaluatingauditfindings712.4.Other audit procedures583.5.1.Auditing 4M-2NOTESBecker Professional Educati
2、onICPAExam Review(92010 DeVrv/Becker Educational Development Corp. All right5reervedBeckerProfessionalEducationICPAExam ReviewAuditing 4AUDITDOCUMENTATIONI.GENERALAudit documentation (also referred toas“working papers“ or the “audit file“)isthe principal record of audit procedures performed, evidenc
3、e obtained, and conclusions reached.A.PurposeThe purpose of audit documentation istoprovide:1.Support for the auditors report, including evidence that the audit was conductedin accordance with generally accepted auditing standards.2.Assistanceinplanning, conducting,andsupervising the audit.3.Account
4、ability, emphasizing that the audit team is responsible for its work.4.Information that maybeuseful for future audits, quality control reviews, or peer reviews.B.RequirementsAudit documentation should:1.Provide a record of accumuiated evidenceandthe results of audit testsand procedures;2.Bepreparedi
5、nenough detail so that an experienced auditor who hasnoprevious connection with the auditcanunderstand the audit procedures performed, the evidence obtained, the conclusions reached,andhow the accounting records reconcile with the financial statements;3.Demonstrate compliance with the standards of f
6、ieldworkbyshowing that the work performed was adequately planned and supervised, that a sufficient understanding of the entityandits environment was obtained, and that sufficient appropriate audit evidence was obtained to provide a reasonable basis for the opinion;4.Include identifying characteristi
7、cs of the specific items tested:5.Enable reviewers to understand the work performedandthe evidence obtained;6.Include documentationofdepartures from mandatory GAAS requirements, including justification for the departure and how appropriate alternative procedures were usedto achieve audit objectives;
8、7.Identify both the staff who performed the work and the staff who reviewed the work,as wellasthe dates associated with each;8.Contain proper indexingandcross-referencing;and9.Indicate proper identificationofclient, purpose, and period covered. 2010 DeVrv/Becker Educational Development Corp.Allrighi
9、s reservedA4-3Auditing 4Becker Professional EducationICPAExam ReviewC.Retention and Completion1.Report Release DateThe “report release date“isdefinedasthe dateonwhich the auditor grants the client permission to use the report. Often, thisisthe dateonwhich the reportisdelivered to the client.2.Docume
10、ntRetentiona.SAS Rules(nonissuers)Auditing standards require that audit documentationberetained for at least five years from the report release date.b.PCAOB Rules(issuers)The PCAOB requires auditors of public companies to keep audit documentation for seven years from the report release date.3.Docume
11、ntationCompletionDateThe auditorisgranted a certain window of time following the report release datein which to assemble the final audit documentation file. The end of this windowisreferred to as the “documentation completion date.“ After this date, existing documentation must notbedeleted, and addi
12、tions to the audit documentation mustbedocumentedas such.a.SAS Rules(nonissuers)Auditing standards require the final audit documentation file tobeassembled within 60daysfollowing the report release date.b.PCAOBRules(issuers)The PCAOB defines the documentation completion date as 45daysfollowing the r
13、eport release date, and requires preparation of an “engagement completion document“ identifying all significant findings and issues. Also, under PCAOB standards,ifwork is performed by another auditor, the office issuing the report must obtain, review, and retain certain audit documentation from the
14、other auditor.4.SafekeepingofAuditDocumentationReasonable precautions shouldbeestablished for the safekeeping of audit documentation,asitisthe proof that a professional audit was performed. The SOX Act of 2002 imposes tough penalties for failure to retain audit documentation or for the destruction o
15、f records.a.The auditor shouid estabiish appropriate controls for audit documentation to protect its integrity, prevent unauthorized changes, etc.D.Nature and ExtentofAuditDocumentationAudit documentation maybeinpaper form, electronic form, or other media. Oral explanations alone are insufficient, b
16、ut maybeused for clarification of information includedin the audit documentation.The specific quantity, type, and contentofaudit documentation are basedonthe auditors judgment.Indetermining the nature and extent of documentation for a specific area, the auditor should consider:A4-42010 DeVrv/6ecker Educational Development Corp, All rights reserved.Becker Professional EducationICPAExamReviewAuditing41.The risk of material misstatement;2.The extent to which judgment was requiredinperforming t
