documentation for statutory audit
TRANSCRIPT
� “The skill of an accountant can always be ascertained by an inspection of his working papers.”— Robert H. Montgomery, Montgomery’s Auditing, 1912
� Why? Because AAS 3 says so!!
� Evidence of audit done� Evidence of audit done� Planning and performance of audit� Aid in supervision and review� Proof of compliance with standards� Should be able to refer to it anytime in future
� Not documented not done
� Peer review audit
� Clarity and Understanding
� Completeness and Accuracy
� Pertinence
� Logical Arrangement
� Legibility and Neatness � Legibility and Neatness
� Safety
� Initial and Date
� Summary of conclusions
� Filing/keeping of working papers� Checklist of documents to be obtained and
maintained� Indexing of documents/ working papers� Proper numbering/ sequencing of working papers� Summarizing of overall findings� Writing of queries� Writing of queries� Discussing with seniors on matters of importance� Disposing of Query -at staff level/ senior level/ partner level� Working papers to be signed, dated and approved by relevant
level of audit staff with sufficient cross reference� Depicting the client’s name, file number, accounting period,
subject of working paper and reference of working paper withcurrent or permanent file
� As per the excel sheet attached
� The list has been made specifically for statutory audit
� Appointment is to be notified to ROC – 23B
� Request from company to confirm willingness to act as auditors
� Confirmation to act as auditors and within limits prescribed under 224(1)(b)prescribed under 224(1)(b)
� Intimation by company as appointment
� Acceptance of appointment
� Form 23B filing
� Engagement letter
� Understanding the clients business
� Audit materiality computation� 1% of turnover or assets, whichever is relevant
� Understanding and testing internal controls� Should obtain a copy of internal audit report on file.
Also should obtain a cost audit report on file, if applicable.� Also should obtain a cost audit report on file, if applicable.
� Audit strategies memorandum� Scope of engagement� Control environment� Risks noted during our internal control review� Significant events during the year� Audit materiality
� Lead schedules (Final leading to the main balance sheet)
� Detailed trial balance summing up to lead schedule
� Checklists
Work papers + supporting documentation + noting of � Work papers + supporting documentation + noting of work done on the documents
� Numbering and cross referencing
� Signing off by preparer and reviewer
� Completion of review points raised by partner
� Complete set of financial statements with scheduleslinked to the trial balance – disclosure as per revisedSchedule VI.
� Audit report and CARO report� Audit report and CARO report
� Checklists – Accounting standards compliances,Schedule VI checklist and CARO checklist completedand signed off by partner
� Summary review memorandum
� Letter to management
� Letter of representation
� Scope of engagement
� Impact of significant events during the year
� Significant auditing and accounting issues
� Reasons of major variances in different items ofBalance sheet and profit and loss accountBalance sheet and profit and loss account
� Internal control weaknesses observed
� Contingent liabilities and commitments
� Post balance sheet events
� Conclusion of audit
� Highlighting important issues noted during the course of audit to the management –� Accounting and audit issues
� Internal control issues
� Recommendations on improvement of existing controls� Recommendations on improvement of existing controls
� Any other important non compliance
� Important value adding services can be rendered by way of letter to management
� Management representation� Additional audit evidence
� Acknowledgement of management of its responsibilities of the financial statements
� Standard format for representation� Standard format for representation
� Signed copies of financial statements to be on file + signed audit report
� Signed Letter of representation on file
� File properly numbered, cross referenced and signed off by partners – hard copy filing to completeoff by partners – hard copy filing to complete
� Soft copies of final financial statements. Audit report and other audit documentation to be stored on final folder on MS Data
� Tax audit� Final tax audit report with annexures� Tax audit checklist� Tax audit work papers
� Tax return� Tax return� Final computation signed off by preparer and partner +
tax partner� ITR copy� ITR acknowdgement – signed
� Separate file to be prepared for the above
� Soft copies to be stored on MS data relevant folder