• International Standard on Auditing 230’ (Revised) (Site -http://irba.co.za/documents/doc_00535.pdf )
Questions
1] Describe the purposes of audit documentation and explain why each purpose is important.
According to AU 339.03, “audit documentation provides the principal support for the”: (a) “representation in the auditor’s report that the auditor performed the audit in accordance with GAAS”, and (b) “opinion expressed regarding the financial information or the assertion to the effect that an opinion cannot be expressed”. AU 339.04 goes on to state that this “audit…show more content… If the work was not documented, then it becomes difficult for the engagement team, and others, to know what was done, what conclusions were reached, and how those conclusions were reached. In addition, good audit documentation is very important in an environment in which engagement staff changes or rotates. Due to engagement staff turnover, knowledgeable staff on an engagement may not be available for the next engagement”.
2] Review Green and Brown, LLP’s audit documentation guidelines and explain why an audit firm would want to include each of the listed items in its audit documentation.
According to AU 339.10, “the auditor should prepare audit documentation that enables an experienced auditor, having no previous connection to the audit, to understand (a) the nature, timing, and extent of auditing procedures performed, (b) the results of the audit procedures performed and the audit evidence obtained, (c) the conclusions reached on significant matters, and (d) that the accounting records agree or reconcile with the audited financial statements or other audited information.” In order to achieve this goal, it is necessary for the auditor to clearly record on each document the following:
• Title: It is necessary to include the client name, description of content, and year-end financial statement date so that
