Page 208 - Internal Auditing Standards

Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts

16.1 Overview

Audit file documentation (whether maintained on paper or electronically) plays a critical role in:
• Assisting the engagement team in planning and performing the audit;
• Providing evidence to demonstrate that the planned audit procedures were in fact performed;

• Assisting engagement reviewers (including engagement quality control reviewers) in carrying out their
responsibilities in accordance with professional standards;
• Recording the judgments involved in forming the audit opinion; and

• Recording matters of continuing significance for future audits of the entity.

CONSIDER POINT

There is no need to provide documentation about ISA requirements that are not relevant in the
circumstances. This would apply where the entire ISA is not relevant (such as ISA 610, when the entity has
no internal audit function), or where the ISA requirement is conditional and the condition does not exist.

Good audit documentation is appropriately organized, and provides a record of the work done, the audit
evidence obtained, the significant professional judgments applied, and the conclusions reached.

Exhibit 16.1-1

The Need for • Supports the basis for the auditor’s conclusions concerning every relevant
Audit File financial statement assertion.

Documentation
• Provides evidence that the engagement complies with professional standards.
• Provides evidence that the underlying accounting records agree or reconcile
with the fi nancial statements.

Audit documentation for smaller entities will generally be less extensive than for larger entities. This particularly
applies where:

• The engagement partner performs all the audit work. Documentation would not include matters related
to team discussions, allocation of responsibilities, or supervision; and

• Some matters are so straightforward that they can be more conveniently addressed in a single
document with cross-references to supporting working papers. This could include one or more of the
areas such as the understanding of the entity and its internal control, the overall audit strategy and audit

plan, materiality, assessed risks, significant matters noted, and the conclusions reached.

Many ISAs contain specific documentation requirements that serve to clarify the requirements of ISA 230.
The following table provides a reference to the paragraphs in ISAs that outline specifi c documentation
requirements. This does not imply that there are no documentation requirements in the ISAs that are not
included in the list below.

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