ABREMA: glossary: audit working papers

Audit working papers

Audit working papers are the record of the planning and execution of the audit engagement. Auditors retain a set of working papers for each audit engagement for each year. The audit working papers for the current year are referred to as the current working papers. Working papers that are relevant to more than one audit engagement are often kept separately in a file referred to as permanent working papers. The audit working papers (current and permanent) for a client audit engagement describes the evidence upon which the auditor bases his/her opinion on the financial report. The working papers need to be sufficiently detailed to enable another appropriately experienced and competent auditor that is not familiar with the client to obtain an overall understanding of the engagement. (See The CPA Journal article entitled Audit Documentation: It’s a Whole New World).

Current working papers include:

the tactical audit plan including the audit approach for each material account balance assertion, and the basis for their determination,
the related audit programs,
the audit evidence gathered by the auditor necessary to form the opinion on the financial statements,
conclusions reached about individual account balance assertions,
notes made of the quality review of the working papers,
a schedule of audit differences, and
the details of critical decisions made by the auditor that have an impact on the final audit opinion.

Permanent working papers may include:

A description of the major activities, products, and locations of the client entity.
Organization charts.
A description of the client's accounting information system, which may be in the form of narratives, questionnaires, flow charts, matrices, or some combination thereof.
Copies of the client's manuals relating to the accounting information system and other procedural manuals.

Activity Based Risk Evaluation Model of Auditing

Audit working papers