The audit documentation should be clear and concise yet should have all the necessary details to explain the processes followed, the matters reviewed, the assumptions taken and the way results were prepared (PCAOB).
The audit document should not be written in a verbose manner and rather point wise findings help the reader understand the matter easily. The document should clearly lay out the findings and the materiality that has been taken into account.
All the backup data and sources should be mentioned so that the reviewer or other users do not have to spend time on finding references for every statement (AOG, 2011).
Apart from the auditor who prepares the audit documents, the reviewer or the review committee, along with any supervisory personnel, quality inspectors, internal and external inspection teams, the regulators, and also the successor auditor (PCAOB).
Although some of the above mentioned parties may not view the full documentation and may be concerned with specific parts, it should always be assumed that everyone would view the entire document (AOG, 2011).
Taking this into consideration, the document should be clearly understandable to all such parties and fully explain all the matters viewed during the audit.
The audit documentation serves as a guide for the audit process that was conducted. It provides details regarding the audit processes and the main findings. The documentation is reviewed by supervisors, quality inspectors and also regulators.
Thus the documentation provides everyone the view and basis of the auditor who had conducted the audit, without the need for that person to be present for all the explanation.
The audit documentation also serves the purpose of a base or a prototype for subsequent period’s audit and any successor auditor (PCAOB).
References
PCAOB. Audit Documentation. Public Company Accounting Oversight Board. Retrieved from http://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_3.aspx.
OAG. (2011). Nature, purpose, and extent of audit documentation. Office of the Auditor General of Canada. Retrieved from http://www.oag-bvg.gc.ca/internet/methodology/performance-audit/manual/1111.shtm.
