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CS Professional · Internal and Forensic Audit · Internal Audit Tools and Techniques

An internal audit manager at Sundaram Textiles reviews a junior's working paper on payroll testing. The paper lists 25 employees tested and ticks against each, but does not state how the sample was chosen or what the ticks mean. What is the most significant documentation deficiency?

The main deficiency is the missing sample selection basis and tick-mark legend. A working paper must allow a reviewer to understand and re-perform the work without extra explanation. Tick marks are acceptable if explained, and sampling is acceptable if the basis is documented.

  1. AThe paper lacks the sample basis and tick-mark legend, so a reviewer cannot re-perform or follow the workCorrect
  2. BThe paper uses tick marks, which are not permitted in working papers
  3. CThe paper should have tested all employees rather than 25
  4. DThe paper should have been typed rather than prepared electronically

Explanation

Good working papers let an experienced reviewer understand the work without further explanation. Without the sampling basis and tick-mark meaning, the work cannot be followed or re-performed. Tick marks themselves are acceptable when explained, so that distractor is wrong.

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