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CA Intermediate · Auditing and Ethics · Audit Documentation

CA Imran Qureshi is reviewing the working paper on fixed assets prepared by an audit assistant on the audit of Nilgiri Tea Estates Ltd. The paper concludes 'Verified, OK' for additions of ₹4.8 crore without stating what was examined. Which weakness does this most directly show against SA 230's requirement on documenting audit procedures?

The weakness is that the paper does not record the identifying characteristics of items tested, such as invoice details, nor who performed and reviewed the work. SA 230 requires enough detail for an experienced auditor to understand the procedures, so a bare conclusion is inadequate.

  1. AThe paper does not record the identifying characteristics of the items tested, such as invoice numbers, dates and amounts, and who performed and reviewed the workCorrect
  2. BThe paper records too many details of the items selected
  3. CThe paper should have been prepared by the engagement partner personally
  4. DThe paper should contain only the conclusion, as procedures are never recorded

Explanation

SA 230 requires documentation of the identifying characteristics of the specific items tested, who performed the work and the date, and who reviewed it and when. A bare 'Verified, OK' does not let an experienced auditor with no prior connection understand the nature, timing and extent of procedures. Excess detail is not the issue, the partner need not prepare every paper, and procedures must be recorded, not only conclusions.

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