Post on 17-Nov-2014
description
MUHAMMAD WALEED L1F10BSAA0064
ASAD ADIL L1F10BSAA2056
FAREED UD DIN L1F10BSAA0038
HUSSIAN SHAHID L1F10BSAA2055
Group Members
Objectives of Audit
The objective of an audit of financial statements is to 'enable the auditor to
express an opinion' whether the financial statements are prepared, in all material
respects, in accordance with an applicable financial reporting framework.
Contents of Project
Audit DocumentationWorking Papers –ObjectivesCharacteristicsWork Paper ElementsWorking Paper-Example
Roles of Client and Auditor
Role of the client:– Provide complete financial records– Prepare working papers– Provide supporting documents– Design and implementation of internal
controls to prevent and detect fraud and error
– Disclose any illegal or possibly illegal acts
Roles of Client and Auditor
Role of the auditor:– Provide audit opinion– Understand client’s operations, accounting
systems and information systems– Maintain strict confidence with respect to
client’s information– Remain independent
Audit Documentation
Audit Standard: 2330-1Working Paper FilesTypical Working Paper FormatStorage of Working PapersOwnership of Working Papers
Audit Documentation
Standard 2330-1: “Internal auditors must document relevant
information to support the conclusions and engagement results”.
Audit Documentation
Audit documentation is the principal record of auditing procedures applied, evidence obtained, and conclusions reached by the auditor.
Audit Evidence is documented in Audit working papers.
Internal Audit Management Reviews these Working papers to ensure quality is maintained.
Working Papers -Objectives
Audit working papers achieve following objectives:Aid in the planning, performance,
and review of audit work.Provide the principal support for
audit report and conclusions.Facilitate third party/supervisory
reviews.
Working Paper-Objectives
Provide a basis for evaluating the internal audit activity’s quality control program.
Document whether engagement objectives were achieved.
Support the accuracy and completeness of the work performed.
Key X-teristics of Work Papers
CompleteConciseAccurateOrganised
Characteristics
Completeness: Each Work Paper should be completely self standing
and self explanatory. All questions must be answered, all points raised by the reviewer must be cleared and a logical, well thought-out conclusion reached for each audit segment.
Characteristics
Accurate: High quality work papers include statements and
computations that are accurate and technically correct.
Characteristics
Organisation: Work papers should have a logical system of
numbering and a reader –friendly layout so a technically competent person unfamiliar with the project could understand the purpose, procedures performed, and results.
Characteristics
Relevance & Conciseness: Audit work papers and items included on each work
paper should be relevant to meeting the applicable audit objective.
Work papers must be confined to those that serve a useful purpose.
Work Paper Elements
Work papers should include the following key elements: Name of audit area Source: The name and title of the individual providing
the documentation should be recorded to facilitate future follow-up questions or audits.
Scope: The nature, timing, and extent of procedures performed should be included on each work paper for completeness.
Elements of W/Papers
Reference: A logical work paper number cross referenced to audit program steps and issues should be included.
Sign off: The preparer’s signature provides evidence of completion and accountability, which is an essential piece of third party quality review.
Working Paper-Example
ABC Pension Audit as of 30/06/2011
Comparison of HRD 20 Forms to Master Files
W/P NO. A-3 Prepared by: MN
Name on HRD 20 Form
Located Individual on Master File
M. Kinyera Y
G. Musoke N
F. Namusisi Y
Source: HRD 20 form files located in Pension Benefits Area
Y=on master file, N = Name not located on master file
Working Paper Example2
Summary of Audit Findings (RAF)
ABC Ltd – Pension Audit as of 30th June 2011
RAF No. C-3 Scope:
W/P Ref: A-3
Audit Objective:
Method of Sample Selection
Results (Condition, effect, cause)
Conclusion
Recommendation:
Risk Grade: Medium
Prepared by: Date:
Reviewed by: Date:
Tick Mark -Example
Ricky Corporation Cash Reconciliation
Prepared by: Reviewed by:Date: Date:1st Savings 234 @@ = Traced to bank reconciliation
Storage of Work Papers
Permanent File: Keeps information that is relevant for multiple years
on recurring engagements.Current File:
Information relevant for a given audit project/engagement.
Working Paper Storage
Can be stored in manual or electronic form.For electronic files:
Back up frequently. Include the file name in the footer. Develop an organisation method.
Working Papers Mgt Policies
The CAE must control access to engagement records – Std 2330.A1.
The CAE must obtain the approval of senior management and/or legal counsel prior to releasing such records to external parties, as appropriate-Std 2330.A2.
The CAE must develop retention requirements for audit records –consult legal counsel.