Audit documentation (also referred to as "working papers" or "workpapers") is the principal record of audit procedures performed, evidence obtained, and conclusions reached.
Audit documentation should provide:
evidence of the basis for the auditor's report and the conclusion about the achievement of the overall objectives of the auditor; and
evidence that the audit was conducted in accordance with generally accepted auditing standards and applicable legal and regulatory requirements.
Audit documentation should:
Assist the engagement team in planning, conducting, and supervising the audit.
Show that the accounting records reconcile with the financial statements, including disclosures.
Enable the engagement team to show its accountability, emphasizing that the team is responsible for its work.
Provide a record of accumulated evidence, showing the procedures performed, evidence examined, and conclusions reached.
Be a record of matters of continuing significance to future audits of the same entity.
Enable the conduct of quality control reviews and inspections, including external inspections or peer reviews.
Assist an auditor who reviews a predecessor auditor's documentation.
Be prepared in enough detail so that an experienced auditor who has no previous connection with the audit can understand:
the nature, extent, and timing of the audit procedures performed;
the results of the procedures performed and the evidence obtained;
the significant findings or issues arising during the audit; and
the conclusions reached, and significant judgments made to reach those conclusions.
Show who performed the work and the date the work was completed.
Show who reviewed the work performed and the date and extent of the review.
Include abstracts or copies of significant contracts or agreements.
Document discussions of significant findings or issues with management, those charged with governance, and others.
Document how the auditor addressed any information inconsistent with the auditor's final conclusion regarding a significant finding or issue.
Document the auditor's justification for a departure from a presumptively mandatory audit requirement and how alternative audit procedures achieved the intent of the requirement.
Document the performance and review of additional audit procedures or new conclusions after the date of the auditor's report.
The report release date is defined as the date on which the auditor grants the client permission to use the report. Often, this is the date on which the report is delivered to the client. The auditor should document the report release date.
SAS Rules (Nonissuers): Auditing standards require that audit documentation be retained for at least five years from the report release date.
PCAOB Rules (Issuers): The PCAOB requires auditors of public companies to keep audit documentation for seven years from the report release date.
The auditor is granted a certain window of time following the report release date in which to assemble the final audit documentation file. The end of this window is referred to as the documentation completion date. After this date, existing documentation must not be deleted, and additions to the audit documentation must be documented as such.
SAS Rules (Nonissuers): Auditing standards require the final audit documentation file to be assembled within 60 days following the report release date.
PCAOB Rules (Issuers): The PCAOB defines the documentation completion date as 45 days following the report release date, and requires preparation of an "engagement completion document" identifying all significant findings and issues. Also, under PCAOB standards, if work is performed by another auditor, the office issuing the report must obtain, review, and retain certain audit documentation from the other auditor.
Audit documentation should: