Question
It has been recommended that ‘Audit working papers should always be sufficiently complete and detailed to enable an experienced auditor with no previous connection with the audit subsequently to ascertain from them what work was performed and to support the conclusions reached.'
Required:
(a) Describe four benefits that the auditor will obtain from working papers that meet the above requirement.
(b) Describe four different review procedures that are applied to working papers.
(c) Discuss the reliability of the following types of audit evidence, giving two examples of each form of evidence.
i. Evidence originated by the auditor
ii. Evidence created by third parties
iii. Evidence created by the management of the client.
(d) In the case of a significant item requiring exercise of judgement show what types of evidence should be recorded in the current audit file and give reasons for inclusion. You should use a material claim for damages to illustrate your answer.
(e) Briefly explain the purpose of the Permanent Audit File. List three types of information typically retained in the Permanent Audit File and state why they should be available for easy reference.
(f) Briefly explain the purpose of Standardised Procedures.