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CA Intermediate · Auditing and Ethics · Audit Documentation

During the audit of Sundaram Engineering Ltd, the auditor performs an inspection of 25 purchase invoices selected from the purchase register. Under SA 230, which documentation best meets the requirement to record identifying characteristics of the specific items tested?

The auditor should record the invoice numbers, dates and amounts of the 25 selected invoices. SA 230 requires identifying characteristics of items tested, so that an experienced auditor with no prior connection can understand and re-trace what was examined.

  1. ARecording the invoice numbers, dates and amounts of the 25 items selected, so that another auditor can identify themCorrect
  2. BRecording only that a sample of purchase invoices was tested satisfactorily
  3. CRecording only the total value of purchases of the year
  4. DRetaining the client's purchase register without noting which items were tested

Explanation

SA 230 requires recording the identifying characteristics of the specific items or matters tested, such as invoice number and date for a purchase test. A general statement or the total purchases would not allow an experienced auditor to identify what was tested. Keeping the register alone does not show the items selected.

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