Auditing

Audit Working Papers – Meaning And Objectives Of Audit Working Papers

Audit Working Papers – While conducting the audit, all such notebooks, documents, lists, correspondence, etc., used by the auditor, which are retained by him even after the completion of the audit and which it is not necessary to return to the client are known as the auditor’s working papers. These are prepared by the auditor and are his personal property. In other words, those documents, certificates and confirmation letters, which are used by the auditor while doing the audit work are known as audit working papers.

Audit working papers include the following:

  • Audit programme
  • Audit notebook.
  • Audit appointment letter.
  • Correspondence done in relation to the audit programme.
  • Lists of debtors and creditors.
  • Opening and closing Trial Balance.
  • A copy of the audit report.
  • Copies of other correspondence done in relation to the audit, such as correspondence with debtors, creditors, banks etc.
  • Rules of the organisation, memorandum of association, articles of association, prospectus etc.
  • List of cost vouchers.
  • Certificate received from the management in relation of valuation of closing stock.
  • Adjustment Journal Entries.
  • List of investments.
  • Explanation received during the course of the audit.
  • Summary of minute books.
  • Documents relating to depreciation.
  • Copies of documents, which the auditor thinks necessary to retain.
  • Working papers on which the employees of the auditor have taken out totals, balances, etc.  have made observations and other important calculations.

Objectives of Audit Working Papers

  • They depict the progress of the work done by the auditor and his staff. They also help the auditor in the preparation of auditor’s report.
  • In case of any legal dispute or court proceedings in the future, these papers can be presented as evidence in court.
  • On the basis of the working papers, the auditor can point out the weaknesses in the internal control system and the inefficiencies in the accounting methodology of the client. He can also make suggestions for the removal of such weaknesses and inefficiencies
  • In case the accounts of the same client are to be audited again, the auditing working papers are invaluable. In fact, the basis of any future plan are the working papers of the past years.
  • After completion of the audit, the working papers can be used as a context in discussing business matters with the client.
  • If the staff of the auditor are frequently changing or being transferred, then in such a situation maintenance of proper working papers facilitates the transfer of the work being done by one audit clerk to another audit clerk without any error and with minimum interference.
  • The business also some times requires a number of working papers in order to obtain licences assess taxes, etc. Hence due to various legal compulsions it becomes necessary to maintain working papers.
  • Working papers are permanent records and they are retained by the auditor. Hence, if a case is filed against him on the changes of negligence then he can defend himself on the basis of the audit working papers.

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