What is Audit Working Paper?

Audit working papers are the documents that the auditors prepare or use when they are doing their job. Those documents are vital for all the auditors in audit firms in Johor Bahru as they consist of the summary of the process flow of the business, its customer’s nature, audit program, information or documents acquired from the customer and documents for audit testing.

Some people would call audit working papers as audit documents as they play a vital role in the audit procedures. These documents serve as evidence which supports the auditors in making a conclusion on the customer’s financial statements.

For instance, an external auditor (Also see Difference between internal and external auditors) has engaged by an organisation to audit its financial statements. Before the auditor signs the audit engagement letter, he or she needs to acquire some information regarding the customer, look into the customer due diligence, as well as analyse whether they should accept or reject the engagement. In such a situation, if the auditor is ready to sign the engagement letter, it means that he has done the assessment and he can accept it.

The documents which the auditors utilise to record customer nature of the business, investigate customer due diligence, and carry out the assessment, are some of the examples of audit working papers.

Besides, audit working papers also include the Microsoft Word or Excel documents that the auditors would use to record the customer’s vital internal control over reporting of financial accounting (Also see Difference between Financial Accounting and Management Accounting).

Generally, the audit assistants or audit staff are responsible for acquiring or preparing audit working papers. Then, an authority, such as the audit partners or the audit managers, or another more experienced auditor will review these documents.

Also, an auditor needs to file in the audit working papers into the right audit files, which are the permanent audit file or the current audit file.

Factors That Affect the Content of the Audit Working Papers:

There are many factors which can cause a change in the audit working papers. This includes:

• The size and complexity: The company’s size and complexity can be very different from each other. If there is a difference in the complexity of the nature of a business entity, the form will be different. For instance, the auditors will select more samples for a large organisation, and they will acquire various information since the nature of the business is complex.
• The nature of audit approaches: For instance, some testing is very complex, while some testing is quite straightforward.
• The determined risks of material misstatement. If the risks of material misstatements that an auditor has found are significant, he or she must conduct the audit work to a large extent.
• How significant the audit evidence the auditor has acquired is.
• The extent as well as the nature of exceptions.

Every audit working papers must consist of a proper objective, subject, the customer’s name, period of audit, date of the working paper, employee who prepare, employee who review, as well as the sources of evidence. Both the preparer and the reviewer must sign the working paper.