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CA Intermediate · Auditing and Ethics · Audit Documentation

While auditing Kavya Textiles Ltd for FY 2025-26, audit senior Rohan prepared a working paper on debtors' confirmations. The engagement partner asks why the working papers must be prepared on a timely basis. Which is the most appropriate reason under SA 230?

Timely preparation of audit documentation improves audit quality and lets the team review and evaluate the evidence before signing the report. Papers written much later are less accurate. Documentation is the auditor's property, so ownership and representation letters are unrelated to the timing requirement under SA 230.

  1. AIt enhances the quality of the audit and allows an effective review of evidence obtained before the auditor's report is finalisedCorrect
  2. BIt transfers ownership of the papers to the client once the audit fee is paid
  3. CIt removes the need to obtain written representations from management
  4. DIt allows the auditor to prepare the papers after the report date without any consequence

Explanation

SA 230 states that preparing sufficient and appropriate documentation on a timely basis helps enhance audit quality and facilitates effective review and evaluation of the evidence obtained before the report is finalised. Documentation prepared long after the work is performed is less accurate. The option on client ownership is wrong because audit documentation belongs to the auditor.

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