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CA Intermediate · Auditing and Ethics · Audit Documentation

While auditing Sundaram Pharma Ltd, the audit manager notes that the senior documented the inventory count procedures in the file only as 'Inventory counted - OK'. The partner asks what SA 230 expects of documentation of an audit procedure. Which response is correct?

The documentation should record the characteristics of the items tested, who performed the work and when it was completed, and who reviewed it and when. A bare statement like OK does not allow another experienced auditor to understand the work performed.

  1. ARecord only the conclusion, since the auditor's report is the main evidence of work done
  2. BRecord the characteristics of items tested, who performed the work and the date, and who reviewed it with the dateCorrect
  3. CRecord only the names of the staff who attended the count
  4. DRetain only the client's count sheets, since the working papers belong to the client

Explanation

SA 230 requires the auditor to record the identifying characteristics of the specific items tested, who performed the audit work and the date of completion, and who reviewed the work, with date and extent. A bare conclusion does not let an experienced auditor with no connection to the audit understand the work. Working papers are the property of the auditor, not the client.

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