CA Intermediate · Auditing and Ethics · Audit Documentation

After the audit of Narmada Steels Ltd was completed and the file assembled, the engagement partner, CA Rohit, discovered that a discrepancy in a bank confirmation had been noted in a working paper but its resolution was never documented, although it was resolved orally with the bank manager. Which response is correct under SA 230 and ethical requirements?

Add documentation of the oral resolution as a clearly dated late entry, stating the reasons and who made and reviewed it, while keeping all original working papers. After file assembly, the auditor must not delete or discard documentation before the retention period ends, and significant matters must be documented.

1. ADocument the oral resolution as an addition made after file assembly, recording the reasons, date, and who made and reviewed it, without deleting or discarding any original working papersCorrect
2. BDelete the original working paper and prepare a fresh one showing the discrepancy as never having existed
3. CTake no action, because oral evidence need not be documented
4. DReturn the bank confirmation to the client to be corrected