Page 217 - Internal Auditing Standards

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

16.6 Electronic Documents

Many accounting firms have replaced (or are in the process of replacing) paper-based engagement fi les with

electronic files. In some cases, even though the work was performed and reviewed electronically, paper

files are maintained as the permanent record of work performed. Documents/forms are initiated in digital
form, client records are scanned electronically, and all data is stored electronically. It is printed on paper only
after all the work is completed and reviewed.

There are two types of electronic documents:

• Work-in-process; and
• Static information.

Work-in-Process
Work-in-process consists of dynamic information that is being developed and updated as the audit
progresses. Examples include blank audit forms and letter templates, industry knowledge and key
performance indicators, questionnaires, logic trees, the firm’s policies, diagnostics and the previous period’s

financial data, information, assumptions, etc. that may be used in performing this period’s analytical

procedures. This information is often contained within software applications and electronic audit tools.

Static Information
Static information consists of fi nal file documents, such as the financial statements and completed working

papers, that will not change and may well be required for reference in future years. Final or static documents
must be retained in a format where the information can be retrieved easily in later years.

Legacy Software
Leaving the information in a format used by a software application can be problematic if the software

application is updated with a new file format. The old file may not be capable of being opened unless a copy
of the old software application is also maintained. To overcome this problem, many firms are now saving their

fi nal file documents in a medium called portable document format (PDF). PDF has been accepted and used
by government agencies and accounting firms around the world. The firm’s policies should state that fi nal

documents are not to be edited.
Advantages of Automation

Maintaining audit files in an electronic form enables some administrative functions to be automated, and

provides additional flexibility for engagement team members. For example:
• Specific working papers can be accessed directly from the index;

• Files and documents can be easily shared or reviewed with others in distant locations;

• New audit folders and documents can be created, renamed, moved, copied, or deleted from the index;

• The detailed index can be collapsed to reveal its overall structure, or expanded as needed, making it
easier to see the big picture and locate key documents;

• Customized names can be given to important documents. This can help other team members to
interpret the contents of a document from its name;

• Review functions can be automated such as checking all or part of the audit file for exceptions,
outstanding review notes, and preparer/reviewer sign-off s;

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