RESERVED TO SERMINAR FOR MISSION 2013.pptx

Mission Training

1. Compilation of Audit Working Papers Presented by Robert K. Fiadzo 4TH – 6 TH AUGUST 2013 1 SEMINAR FOR OFFICERS ON MISSION 2013

2. Introduction Nature of Audit Documentation Purpose of Audit Documentation Types of Audit Working Papers Contents of Permanent and Current Files Importance of Audit Working Papers Contents of Audit Working Papers Index to the File 2 Outline of Presentation

3. An auditor’s assignment ends when he/she is able to establish that all audit evidence gathered is: Sufficient Competent Relevant Reliable Useful This is to support all results and final report. 3 Introduction

4. Administrative Planning Activities These activities assess ethical and resource requirements and also determines the terms of the engagement. Strategic Planning Activities These activities facilitate the auditor’s understanding of the auditee It identifies and evaluate risk on a financial statement level Introduction cont’d 4

5. Finally it serves as a basis for developing the Overall Audit Strategy which needs to be approved by a superior officer and discussed at the Entrance Conference. Detailed Planning and Fieldwork This stage helps to understand the Entity, identify and assess risks for the audit component. Introduction cont’d 5

6. It also determines the appropriate response to assessed risks and identify nature and extent of audit tests. Finally it facilitates the performance and documentation of audit programs. Audit Summary This stage performs overall audit programs, aggregate and conclude on audit results and compliance with the code of ethics. Introduction cont’d 6

7. Concluding and Reporting This is the stage at which the management letter is compiled, communicated to the client and the final compilation of the audit opinion. Introduction cont’d 7

8. Audit documentation includes working papers compiled by auditors containing audit programs analyses, issues memoranda, internal control evaluation, summaries of significant matters, letters of confirmation and representation, checklists, and correspondence. It may include abstracts or copies of the entity’s records e.g legislation, organogram, significant and specific contracts and agreements Nature of audit Documentation 8

9. This is to provide a record of how the objectives of an assignment were achieved and performed in accordance with ISSAIS and applicable legal and regulatory requirements. ISSAI 1230.2 Purpose of Audit Documentation 9

10. Audit working papers are documents that record all audit evidence obtained during financial statement audit, internal management, IT audits and investigations. They show that the audit was properly planned, adequately supervised and reviewed. They also show that the evidence gathered was sufficient and appropriate enough to support the audit opinion. 10 What are Audit Working Papers

11. Permanent audit file contains data of recurring importance. Current audit file takes care of items of a current nature. 11 Types of Audit Working Papers

12. Sections 1-3 – Accounting Policies, Instructions and other regulations which are necessary in order to make a correct assessment of the agency and its special situation. Sections 4 -8 - Basic information on the organisation, operations, etc. of the agency. Sections 9-16 - Descriptions of processes and routines with identified control functions. Sections 17-23 - Important agreements/contracts, statements made by, for example the Government and the entity, and articles from the mass media, studies in the area etc. 12 Contents of Permanent Files

13. Copy of accounts being audited Engagement letters Action plans, follow-ups, correspondences Planning documents and audit programs Memorandums on reviews of controls(control strengths and weaknesses) Control systems documentation such as questionnaires,flowcharts,checklists and narratives Records of interviews Results and analysis of audit testing and how exceptions were handled 13 Contents of Current File

14. Assist auditors to plan and perform audit. Assist in discharging supervision and review responsibilities. Enable the audit team to be accountable for its work. Retain a record of matters of continuing significance to future audits. 14 Importance of Audit Working Papers ISSAI 1230.3

15. Enable the conduct of quality reviews. Enable the conduct of external quality assurance reviews in accordance with applicable legal, regulatory or other requirements. Aids professional development. Importance of Audit Working Papers Cont’d 15

16. Very importantly, the auditor’s conclusion on the audit evidence gathered on the working paper should also appear at the bottom of the working paper. All marks, symbols coloured highlights should be explained in a Legend or Key at the last end of the working paper if the auditor did not use Audit Service Standards. Contents of Audit Working Paper 16

17. Indexing should be done at the top right hand corner in sequential numbering. This should be done near to the end of the work carried out for a particular section to reduce the number of changes and help keep working paper clean. To provide a clear and easy connection between the working papers and the audit report, cross-referencing should be used to show how audit findings and recommendations are supported. Contents of Audit Working Paper 17

18. Cross-referencing leads the auditor and the reviewer to a supporting working paper, which in turn leads the auditor and the reviewer to lower levers of working papers. Contents of Audit Working Paper 18

19. PART CONTENTS PAGE A ADMINISTRATIVE PLANNING (AP) Competency Matrix AP -1- 4 Code of Ethics .doc AP - 2 Budgeted vs. Actual – Days/Hours .xls AP -3 Letter of Understanding .doc AP -4 Assignment Plan Agreement .doc AP -5 B STRATEGIC AUDIT PLANNING (SAP ) Internal Control Checklist (Manual .doc SAP -1 19 Index to the File

20. PART CONTENTS PAGES Budget checklist .doc SAP -2 Review of Internal Audit .doc SAP -3 ARIC Checklist .doc SAP -4 Prior Year Audit Matters .doc SAP -5 Overall Audit Strategy .doc SAP -6 Index to File cont’d 20

21. PART CONTENTS PAGES C FIELD WORK (AUDIT EXECUTION) (AE) Entrance Conference .doc AE -1 Systems Description for Audit Component AE -2 Systems Evaluation for components AE -3 Audit Steps and Programs AE -4 Audit Steps and Programs Performance . xls AE -5 Evidence tracking Sheet .xls AE -6 Audit Observations .doc AE -7 Index to File cont’d 21

22. PART CONTENTS PAGES Draft management Letter .doc AE -8 Exit Conference .doc AE -9 Review Checklist AE -10 Index to File cont’d 22

23. PART CONTENTS PAGES D REPORTING (AR) Management Letter AR -1 Audit Report AR -2 Matters for Attention during next year’s Audit AR -3 Index to File cont’d 23

24. THANK YOU FOR YOUR ATTENTION 24