Reviewing Field Work Documentation

Are you unsure of what to include in your workpapers? If you include too much, you may be creating additional work for yourself and your reviewers. If you include too little, you give the impression to your superiors that you aren’t doing your job, and you also open your firm up to more risk. This course can help! This course’s many case examples show field work supervisors, in-charges, and staff what factors to consider and the steps to follow when creating and/or reviewing working papers. It will alert you to typical deficiencies and explain how to minimize potential liability by making certain that the firm’s reports are fully and accurately supported by documentation. Staff and reviewers of audit workpapers will benefit from this course.

Highlights include the “nuts and bolts” of reviewing; checklists for audit documentation; how to review analytical procedures; and common work paper shortcomings.

Objective: 

Identify the tasks necessary to ensure compliance with current professional documentation standards when performing supervisory level reviews of audit field work

Overview

Introduction

The objective of this course is to teach senior auditors how to review working papers to

• Ensure that adequate evidence has been collected and analyzed during the course of the audit to support the opinion on the client's financial statements;
• Ensure that audit work was performed in accordance with generally accepted auditing standards;
• Evaluate more effectively the judgment, skills, organization, and work efforts of staff members; and
• Improve the ability to extract relevant information from the mass of data reviewed during an audit and to present it concisely and comprehensively.

This course discusses the goals of senior-level working paper review, provides guidance on how to review them and illustrates through examples and a case common types of problems the senior-level review should detect.

Organization

This course contains is organized as follows:

• Chapter 1, "Working Paper Basics," discusses the basic GAAS requirements for audit documentation and how working paper review affects the audit.
• Chapter 2, "Conducting the Review," provides guidelines for the in-charge review.
• Chapter 3, "Typical Working Paper Shortcomings," discusses and illustrates common deficiencies in working papers.
• Chapter 4, "I. M. Weill Memorial Hospital Case Study," provides an extended set of working papers for your review and critique.

Chapter 1 - Working Paper Basics

Learning Objectives

After completing this chapter you will be able to understand

• The basic documentation requirements in GAAS.
• The common working paper filing methods.
• The different levels of review to which working papers are subject.

Introduction

This chapter discusses the requirements for working papers in audit engagements. First, you will study the authoritative literature on working papers. Next, you will consider the review process, including the concept of review, the different types of working papers, the mechanics of review, and the specific accounts to be reviewed. The chapter closes with the need to document the review process.

SAS No. 103, Audit Documentation, establishes the basic documentation requirements in GAAS. Because it sets the basic working paper ground rules, it has been reproduced it in this workbook as Appendix 1A.

Audit Standards Affecting Workpaper Content

SAS No. 103

SAS No. 103, Audit Documentation, requires the auditor to prepare and maintain workpapers on every audit. It says that the form and content of workpapers should be designed to meet the circumstances of the particular audit engagement, but workpapers should be sufficient to

• Provide a clear understanding of the
  • Nature, timing, and extent of auditing procedures applied,
  • Results of the auditing procedures,
  • Evidence obtained and its source,
  • Conclusions reached;
• Indicate who performed and reviewed the work and when the work was performed and reviewed;
• Show that the accounting records agree or reconcile with the financial statements or other information being reported on.

Although the level of detail to be provided is a matter of the auditor's professional judgment, the documentation should be sufficiently detailed that an experienced auditor with no previous connection to the audit can understand the scope and results of the work, the conclusions reached, and that the financial statements agree or reconcile to the underlying accounting records.

Other SASs

The following other SASs also establish specific workpaper requirement. The following is an overview of their provisions:

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