Audit Working Papers

Presenters:
• Alina Zahra
• Ali Zar Zaidi
• Mohammad Anas
• Maaz Hamid
What Is Working Paper?
Working Papers are the material that auditors prepare or
obtain and retain in connection with the performance of
the audit. It may be in the form of data stored on paper,
film, electronic media, or other media. They can also be
used in court.
e.g. in case of negligent audit
Types Of Working Papers
There are 3 types of working papers given below:
• Permanent Audit File
Data of historic and continuing process.
Example: Client incorporation documents
• Current Audit File
Scope of works performed, evidences and findings obtained.
• Correspondence File
Significant Correspondence with seniors.
For Example: Copies of Engagement Letters, Audit
representations
Forms Of Working Papers:
• Data Recorded on Paper.
• Films
• Electronic Media
• Other media
WHY PREPARING WORKING PAPERS ?
• Basis for planning the audit
• Record the evidence accumulated and the results of the audit
tests.
• Data for determining the proper type of audit report
• Basis for review by supervisors and partners
• Evidence audit works being performed in accordance with
approved auditing standards
Purpose of Audit Working Papers
• Audit working papers are used to support the
audit work done in order to provide the assurance that
the audit was performed in accordance with the relevant
auditing standards. They show the audit was: Properly
planned; Carried out properly or not.
Avoiding unnecessary papers
Before deciding to prepare a particular audit working paper, the auditor
should be satisfied that it is:
• Necessary either because it will serve an essential or useful purpose
in support of the auditor’s report, or because it will provide information
needed for tax or other client-related statutory/regulatory purposes
• Not practicable for the client staff to prepare the working paper, or
for the auditor to make copies of papers that the client staff (including
internal auditors) have prepared as part of their normal regular duties.
 each audit working paper must be headed with the following information:
me of the client
Working Paper Sample Content:
riod covered by the audit
bject matter
e reference
tials (signature) of the member of staff who prepared the working paper, and the date on
was prepared
case of audit papers prepared by client staff, the date the working papers were received,
nitials of the audit team member who carried out the audit work
tials of the member of staff who reviewed the working papers and the date on which the
as carried out
udit paper should meet the characteristics of a good working paper, as detailed later in
le.
 Example of Audit Working Papers:
•Audit documents on client nature of business
•Audit documents of team meeting
•Evidence of the planning process including audit programs and any changes thereto
•Evidence of the auditor’s consideration of the work of internal audit and conclusions reached
•Analyses of transactions and balances
•Analyses of significant ratios and trends
•Identified and assessed risks of material misstatements
•A record of the nature, timing, extent and results of audit procedures
•Evidence that the work performed was supervised and reviewed
•An indication as to who performed the audit procedures and when they were performed
•Details of audit procedures applied regarding components whose financial statements are audited
•Result of audit testing on depreciation expenses
•Result of audit testing on salaries expenses by another auditor
Elements of a working paper
• Name of Client
• Period Covered by the Audit
• Subject Matter
• Indexing/ File Referencing
• Initials: Signatures of staff who prepared
• Date when prepared
• Signature of staff who reviewed
• Date when reviewed
Characteristics of a Good Working Paper
• The working paper should clearly and objectively state the results of the test,
without bias, and based on the facts documented.
• The conclusions reached should be consistent with the results of the test and
should be able to withstand independent scrutiny.
• The working paper should be clearly referenced so that it can be filed
appropriately and found easily when required at a later date.
• It should be signed by the person who prepares it so that queries can be
directed to the appropriate person.
• It should be signed and dated by any person who reviews it, in order to meet
the quality control requirements of the review.
Importance of working papers
Working papers are important because they:
• are necessary for audit quality control purposes
• Provide assurance that the work delegated by the audit partner has been
properly completed
• Provide evidence that an effective audit has been carried out
• Increase the economy, efficiency, and effectiveness of the audit
• Contain sufficiently detailed and up-to-date facts which justify the
reasonableness of the auditor’s conclusions
• Retain a record of matters of continuing significance to future audits.
Conclusion:
Working papers provide evidence that an effective,
efficient, and economic audit has been carried out. They
should therefore be prepared with care and skill. They
should be sufficiently detailed and complete so that an
auditor with no previous experience of that audit can
understand the working papers in terms of the work
completed, the conclusions reached, and the reasoning
behind these conclusions.
Audit Evidence - Case Study
Case: Teachers Pension
Disclosure note in the accounts confirms that Teachers Pension
contributions of $6.5m were paid in 2017-18.
Audit deliverables document asks for ‘supporting documentation
for Teachers Pension disclosure’
What evidence would you provide???
References:

•https://www.accaglobal.com/pk/en/student/exam-support-
resources/fundamentals-exams-study-resources/f8/technical-articles/effective-
audit-service.html
•Working Papers by Gita Gopinath
•Make Your Own Working Paper Clock by Stephen J. Smith
•Fundamentals of Auditing by Basu
•https://www.myaccountingcourse.com/accounting-dictionary/working-papers
•https://www.wikiaccounting.com/audit-working-papers/
Thank You!