CAT / FIA FAU Syllabus B. Audit Planning And Risk - Contents of Documentation - Notes ^{2 / 4}

The audit file will follow the structure below:

• Planning

• Audit work carried out on each section of the financial statements (e.g. Non Current Assets, Inventory)

• Completion and review

Auditors must document

1. What items were tested

2. Who did the testing

3. When was the testing

4. Who reviewed the work and when

Discussion of all significant matters with management must also be documented

Includes

1. Planning Documentation (Strategy, plan, risk analysis)

2. Audit programmes

3. Summary of significant matters

4. Letters of confirmation / representation

5. Correspondence

Permanent and current audit files

Permanent audit files contain information of continuing importance to the audit.

The permanent file will include

• Names of management, those charged with governance, shareholders

• Systems Information

• Business and Industry background

• Title deeds

• Contracts

• Copy of the company's legal constitution

• Board minutes of continuing relevance

• Previous years' signed accounts, analytical procedures and management letters

• Engagement letters

Current audit files

contain information which is relevant to the current year's audit.

They contain:

• Financial statements

• Accounts checklists

• Management accounts details

• Reconciliations of management and financial accounts

• A summary of unadjusted misstatements

• Report to partner including details of significant events and misstatements

• Review notes

• Audit planning memorandum

• Time budgets and summaries

• Representation letter

• Management letter

• Notes of board minutes

• Communications with third parties such as experts or other auditors

Current audit files also contain working papers covering each audit area

These should include the following:

• A lead schedule including details of the figures to be included in the financial statements

• Problems encountered and conclusions drawn

• Audit programmes

• Risk assessments

• Sampling plans

• Analytical procedures

• Details of substantive tests and tests of control