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audit documentation
- indicate that accounting records=f/s
- enough detail so "experiences auditor" with no prior connection to audit can understand procedures done
- demonstrate compliance with standards of fieldwork
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documentation completion date
- SAS (nonissuers)=60 days following report release date
- PCAOB(issuers)=45 days following report release date
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permanent file
- year to year
- contracts, pensions, bylaws, articles of incorp., meeting minutes
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current file
- all documentation applicable to year under audit
- plan, f/s, records of tests, significant audit findings
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types of accounting evidence
- underlying accounting records=tested through retracing, recalculation, reconcilliation
- corroborating evidence=obtained through observation, inquiry and inspection. gives validity to accounting records
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sufficiency of audit evidence (valid and relevent)
- quantity of evidence
- more RMM=more evidence required
- higher quality of evidence=less required
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appropriateness of evidence (reliable and relevant)
most to least reliable=auditors knowledge and observation, external from independent sources, internal (better i/c gives more reliability), oral (more reliable if documented)
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substantive procedures
- substantiate the validity of mngt assertions
- tests of details
- substantive analytical procedures
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directional testing
- type of tests of details
- Vouching
- Tracing
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Vouching
- vouch from journal/accounting entries to source documents
- tests for existence by obtaining support
- considers the risk of overstatment (usually of assets/revenue)
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Tracing
- trace from source documents to journal/accounting entries
- tests for completeness by obtaining coverage
- makes sure all transactions are included in the documentation
- considers the risk of understatement (usually of liabilities/expenses)
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