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CA Intermediate · Auditing and Ethics · Audit Documentation

During the audit of Gopal Steels Ltd., the audit manager asks the junior to record, for a sample of purchase invoices tested, the identifying characteristics of the items tested. Under SA 230, why is this documented?

Identifying characteristics of items tested are recorded so that another experienced auditor can understand the nature, timing and extent of procedures performed, and who performed and reviewed the work. It does not shift responsibility to the client or substitute for other documentation.

  1. AIt enables the engagement team and reviewers to understand the nature, timing and extent of procedures and who performed and reviewed the workCorrect
  2. BIt transfers the responsibility for the sample to the client's purchase department
  3. CIt is required so that the working papers become the property of the client
  4. DIt replaces the need to record the date of completion of the work

Explanation

SA 230 requires documentation of identifying characteristics of the specific items or matters tested, so an experienced auditor with no previous connection can understand the procedures performed. It does not shift responsibility to the client, make papers the client's property, or remove the need to record dates.

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