Audit Q's that need some attention..Relevant to ACCA 2.6

surf in the cinema 14 june 2007.. after exam phew~...

Working papers

a)List and explain the criteria which you would use to judge the quality of audit working papers.

(i) Evidence of review -

-All working papers prepared by each member of audit team must be reviewed by a more

senior member. Such a review must be evidenced on the working paper,detailing who has

performed it and when, to ensure that sufficient work has been performed and that the

finding support the audit conclusions.

(ii) Evidence of procedures followed and the tests performed.

- Working papers must indicate the client's name, acctg period, a file reference, the areas of

the audit being covered and the details of who performed the work and when.In the

interest of clarity, detailed explanatory information should provided on supporting

schedules which should be suitably referenced and cross-referenced.

(iii) Record of information received, problem encountered and conclusion reached.

- Documenting details of all findings furing the audit encourages the auditor to adopt a

methodical approach and ensures the problem are not overlooked. The working papers

should summarie any significant matters, and highlights any judgemental aspects together

with the auditor's conclusions thereon.

(iv) Usefulness in future years.

- Working paper should provide sufficient details to enable members of the audit team to

familiarise themselves with the assignment from year to year and to plan subsequent

audits.

(v) Evidence of adherence to ISA's and guidelines.

- In the event of auditor opinion being challenged,the working paper will provide supporting

evidence that the auditor followed the basic principles prescribed by the Auditing std as

well as the approriate application of Auditing Guidelines.

b)* Explain why working papers are prepared. (ACCA level 2 Auditing Dec 1989)

(i) allow the person who is conducting the audit to approach their work in a methodical way, thus omission will be prevented, and the successive chains of command, senior, supervisor, manager and partner able to maintain control over the audit by carrying out review procedures.

(ii) allows the partner to know the adequate work has been performed, before ascertaining whether the accounts show a true and fair view or not.

(iii) preparation of working papers in any one year will also form a basis for succeeding audits since there will be record of problems encountered for future guidance.

c) Give the main categories of items that would be included in a complete set of working papers. (ACCA level 2 Auditing December 1989 sitting)

- information of continuing importance e.g; constitutional documents.

- audit planning information.

- the auditor's assessment of the accounting system and, if applicable the internal control in

operations.

- the detailed audit work undertaken together with all the conclusion drawn therefrom

- evidence that the work performed by audit staff has been reviewed by more senior

personnel.

- analyse and summaries supporting the balances and revenue items in the financial

statements, and

- a summary of significant points affecting the audit, the financial statements and the auditor's

reports and how these were dealt with.

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*might be the area that need some attention on..