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INTRODUCTION
Audit Report
A qualified opinion, if there were any scope limitations that were imposed upon
the auditor's work.
The typical audit report contains three paragraphs, which cover the following topics:
1. The responsibilities of the auditor and the management of the entity.
2. The scope of the audit.
3. The auditor's opinion of the entity's financial statements.
An audit report is issued to a user of an entity's financial statements. The user may rely upon
the report as evidence that a knowledgeable third party has investigated and rendered an
opinion on the financial statements. An audit report that contains a clean opinion is required
by many lenders before they will loan funds to a business. It is also necessary for a publicly-
held entity to attach the relevant audit report to its financial statements before filing them
with the Securities and Exchange Commission.
TYPES OF AUDIT
An audit report is an appraisal of a small businesss complete financial status. Completed by
an independent accounting professional, this document covers a companys assets and
liabilities, and presents the auditors educated assessment of the firms financial position and
future. Audit reports are required by law if a company is publicly traded or in an industry
regulated by the Securities and Exchange Commission (SEC). Companies seeking funding, as
well as those looking to improve internal controls, also find this information valuable. There
are four types of audit reports.
Unqualified Opinion
Often called a clean opinion, an unqualified opinion is an audit report that is issued when an
auditor determines that each of the financial records provided by the small business is free of
any misrepresentations. In addition, an unqualified opinion indicates that the financial records
have been maintained in accordance with the standards known as Generally Accepted
Accounting Principles (GAAP). This is the best type of report a business can receive.
Typically, an unqualified report consists of a title that includes the word independent. This
is done to illustrate that it was prepared by an unbiased third party. The title is followed by
the main body. Made up of three paragraphs, the main body highlights the responsibilities of
the auditor, the purpose of the audit and the auditors findings. The auditor signs and dates the
document, including his address.
Qualified Opinion
In situations when a companys financial records have not been maintained in accordance
with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion.
The writing of a qualified opinion is extremely similar to that of an unqualified opinion. A
qualified opinion, however, will include an additional paragraph that highlights the reason
why the audit report is not unqualified.
Adverse Opinion
The worst type of financial report that can be issued to a business is an adverse opinion. This
indicates that the firms financial records do not conform to GAAP. In addition, the financial
records provided by the business have been grossly misrepresented. Although this may occur
by error, it is often an indication of fraud. When this type of report is issued, a company must
correct its financial statement and have it re-audited, as investors, lenders and other
requesting parties will generally not accept it.
Disclaimer of Opinion
On some occasions, an auditor is unable to complete an accurate audit report. This may occur
for a variety of reasons, such as an absence of appropriate financial records. When this
happens, the auditor issues a disclaimer of opinion, stating that an opinion of the firms
financial status could not be determined.
1. Advantages of Audit
1.
Audited accounts are readily accepted by Government authorities like Tax authorities and
Central banks.
2.
By auditing the accounts Errors and frauds can be detected and rectified in time.
3.
Audited accounts carry greater authority than the accounts which have not been audited.
4.
For accessing finance from financial institutions like Banks, previous years audited
5.
Regular audit of account create fear among the employees in the accounts department
and exercise a great moral influence on clients staff thereby restraining them from commit
frauds and errors.
6.
7.
In the event of loss of property by fire or on happening of the event insured against,
Audited accounts help in the early settlement of claims from the insurance company.
8.
accounts reassure the shareholders that accounts have been properly maintained, funds are
utilized for the right purpose and the management have not taken any undue advantage of
their position.
9.
To determine the value of the business in the event of purchase or sales of the business,
audited account will be the treated as the base for the evaluation.
10. The audit of accounts by a qualified auditor also help the management to understand the
financial position of the business and also it will help the management to take decision on
various matters like report in internal control system of the organization or setting up of an
internal audit department etc.
11. If the accounts have been audited by an independent person, disputes between the
management and labor unions on payment of bonus and higher wages can be settled
amicably.
12. In the event of admission of a new partner, audited accounts will facilitate the formation
of terms and conditions for joining the new partner. Last 3 years audited accounts will give a
general idea about the growth and financial position of the business to the new partner.
2. Disadvantages of Audit
1.
The payment of audit fees brings extra cost burden to the organization.
2.
During an audit the auditor requires the attention several company staff and therefore
causes disruption.
3. Limitations of Audit
1.
2.
3.
Auditors express opinion and therefore does not give total assurance of the true fair
FINANCIAL AUDIT
A financial audit is conducted to provide an opinion whether "financial statements" (the
information being verified) are stated in accordance with specified criteria. Normally, the
criteria are international accounting standards, although auditors may conduct audits of
financial statements prepared using the cash basis or some other basis of accounting
appropriate for the organization. In providing an opinion whether financial statements are
fairly stated in accordance with accounting standards, the auditor gathers evidence to
determine whether the statements contain material errors or other misstatements.[1]
The audit opinion is intended to provide reasonable assurance, but not absolute assurance,
that the financial statements are presented fairly, in all material respects, and/or give a true
and fair view in accordance with the financial reporting framework. The purpose of an audit
is to provide an objective independent examination of the financial statements, which
increases the value and credibility of the financial statements produced by management, thus
increase user confidence in the financial statement, reduce investor risk and consequently
reduce the cost of capital of the preparer of the financial statements.
In accordance with the US GAAP, auditors must release an opinion of the overall financial
statements in the auditor's report. Auditors can release three types of statements other than an
unqualified/unmodified opinion. The unqualified auditor's opinion is the opinion that the
financial statements are presented fairly. A qualified opinion is that the financial statements
are presented fairly in all material respects in accordance with US GAAP, except for a
material misstatement that does not however pervasively affect the user's ability to rely on the
financial statements. A qualified opinion can also be issued for a scope limitation that is of
limited significance. Further the auditor can instead issue a disclaimer, because there is
insufficient and appropriate evidence to form an opinion or because of lack of independence.
In a disclaimer the auditor explains the reasons for withholding an opinion and explicitly
indicates that no opinion is expressed. Finally, an adverse audit opinion is issued when the
financial statements do not present fairly due to departure from US GAAP and the departure
materially affects the financial statements overall. In an adverse auditor's report the auditor
must explain the nature and size of the misstatement and must state the opinion that the
financial statements do not present fairly in accordance with US GAAP.
Financial audits are typically performed by firms of practicing accountants who are experts in
financial reporting. The financial audit is one of many assurance functions provided by
accounting firms. Many organizations separately employ or hire internal auditors, who do not
attest to financial reports but focus mainly on the internal controls of the organization.
External auditors may choose to place limited reliance on the work of internal auditors.
Auditing promotes transparency and accuracy in the financial disclosures made by an
organization, therefore would likely reduce such corporations concealmeant of unscrupulous
dealings
Terms of Engagement,
Auditor needs to obtain level of knowledge of clients business that will enable them to
identify events, transactions and practices that, in their judgment, may have a significant
effect on financial information. Audit plan is more detailed
than overall audit strategy that includes the nature, timing and extent of audit procedures to
be performed by engagement team members. Engagement partner and other key members of
engagement team shall be involved in planning the audit, including planning and
participating in the discussion among engagement team members so as to enhance
effectiveness and efficency of planning process.
Auditor shall plan nature, timing and extent of direction and supervision of engagement team
members and review of their work. Audit planning ideally commences at the conclusion of
previous years audit, and along with related programme, it should be reconsidered for
modification as the audit of their compliance and substantive procedures progress. For an
initial audit, auditor may need to expand the planning activities because the auditor does not
ordinarily have previous experience with the entity that is considered when planning
recurring engagement.
For preparing the Audit Plan the auditor has to do the following Preliminary Planning
Activities
Audit plan
From Wikipedia, the free encyclopedia
Audit planning is a vital area of the audit primarily conducted at the beginning of audit
process to ensure that appropriate attention is devoted to important areas, potential problems
are promptly identified, work is completed expeditiously and work is properly coordinated.
"Audit planning" means developing a general strategy and a detailed approach for the
expected nature, timing and extent of the audit. The auditor plans to perform the audit in an
efficient and timely manner.
Definition
An Audit plan is the specific guideline to be followed when conducting an audit.[2] it helps
the auditor obtain sufficient appropriate evidence for the circumstances, helps keep audit
costs at a reasonable level, and helps avoid misunderstandings with the client.
It addresses the specifics of what, where, who, when and how:
It helps the auditor obtain sufficient appropriate evidence for the circumstances
The accounting and financial reporting process, from the initiation of significant
transactions and other events to their inclusion in the financial statements.
The auditor should obtain an understanding of the control environment sufficient to assess
managements attitudes, awareness and actions regarding internal controls and their
importance in the entity. Auditors overall understanding of the entitys internal control
systems sufficient to develop the audit plan.
Assessing Audit Risk
Audit risk has defined as, the risk that the auditor gives an inappropriate audit opinion when
financially statements are material misstated. The auditor has to assess the risk for
determining the extend of audit to be done or extend of sampling to be done, for preparing the
audit plan.
After such above assessing such parameters auditor should summaries the audit plan by way
of audit programme which should set forth the procedure needed to implement the audit plan.
The audit plan may contain the audit objectives for each area and should have sufficient
details to serve as a set of instructions to the assistants involved in the audit.
The auditor may wish to discuss elements of his overall plan and certain audit procedures
with the client to improve efficiency of the audit and to coordinate audit procedures with
work of the clients personnel. The overall audit plan and the audit programme, however,
remains auditors responsibility.
AUDIT DOCUMENTATION (SA 230)
Audit Documentation- Emergence of concept
In audit, the auditor is expected to maintain the systematic track of records to provide a high
level of assurance on the reliability of financial statements. The auditor provides a positive
opinion, which essentially states that based on the work performed; the financial statements
comply with relevant accounting standards and principles. The level of testing procedures to
obtain the evidence necessary to support such an opinion needs to be high. It is essential for
the auditor to design audit plan in such a manner that the audit procedures brings into light all
material and relevant factors that go in as part of the audit and finally finds its place in the
Audit Report. Oral explanations are not sufficient to document auditors work or conclusions.
Auditors should document audit evidence that contradicts or is inconsistent with audit
conclusions. The audit working papers constitute the link between the auditors report and the
clients record. Thus the concept of Audit Documentation came into emergence.
Audit Documentation- Definition & Meaning
Audit documentation is the working papers prepared and obtained by the auditor and retained
by him in connection with performance of an audit.
Audit Documentation is the record of audit procedures performed, relevant audit evidence
obtained, and conclusions the auditor reached.
Audit documentation- A Practical Approach- Audit documentation has to provide the
principal support for the representations in the auditors report and to assist in the planning,
performance, and supervision of the audit engagement. The most fundamental aspect of
documentation is preparation or acquisition of working papers by the auditor in connection
with performance of his audit. The objective of working papers is to record the audit work
from one year to another. Thus the auditor should provide for the entire following essential
features.
Scope and Extent of Working Papers:
The auditor should sufficiently document the matters to give experienced auditors
who were not previously involved in the audit a clear understanding of the work
performed, the evidence obtained and the conclusions reached. Basically the
subsequent matters should be covered.
1. The nature, timing, and extent of the audit procedures performed to comply
with SA s and applicable legal and regulatory requirements,
2. The results of the audit procedures and the audit evidence obtained
The various aspects of the business environment may affect the process of audit. So
the auditor should look after such things. As per the guidelines issued by the SA -230
the form or content of the working papers are affected by various matters such as
1. The nature of the audit engagement
2. The form of auditors report
3. The nature and complexity of the clients business
4. The nature and condition of clients records and degree of reliance on internal
controls
5. The need in particular circumstances for direction, supervision and review of
work performed by assistants.
6. Extent of judgment required in performing the work and evaluating the results,
for
example,
accounting
estimates
require
greater
judgment
and
When preparing audit working papers, the auditor of an entity may also find it helpful
and efficient to record various aspects of the audit together on a single working paper,
with cross-references to supporting working papers where appropriate. Examples of
matters that may be documented together in an audit include the understanding of the
entity and its internal control,
1. The overall audit strategy and audit plan,
2. Materiality,
3. Assessed risks,
4. Significant matters noted during the audit, and conclusions reached.
5. Significance of the evidence obtained to the assertion being tested
a.Process of Audit DocumentationThe documentation process goes hand-in-hand with the Audit process. Thus in connection of
above points considered, the actual process of documentation can be divided into three
categories as follows:
a. Pre-audit Documentation
b. Audit ongoing documentation
c. Post-audit Documentation
a. Pre-audit Documentation- Main Features
Pre-audit documentation mainly comprise of the acquisition of the papers necessary for the
Audit purpose such as
Thus, peer review for chartered accountants would mean evaluation of a colleagues work
professionally. Peer review applies only to practicing Chartered Accountants as Audit and
practicing Chartered Accountants can perform assurance work only.
Peer review is conducted with an idea to suggest improvements in the reporting services
provided unlike auditing and investigation which are conducted with a focus to
comment on the truthfulness of the financial and accounting records.
This leads to strengthening of the audit process and methodology deployed, including
documentation of working papers as the basis for arriving at conclusions on critical matters.
Documentation is the main focus for Peer Review. The experienced auditor with the help of
documentation can very well conduct the audit Peer Review if the Documentation is good.
2. Aid in legal and professional requirements:
The Institute of Chartered Accountants of India has specified certain professional and
technical ethics, which every Chartered Accountant is required to follow. These ethics are
defined by codes of conduct and the standards issued by ICAI. Wherever the Institute feels
that any CA does not follow these ethics, prosecution is initiated against him and if he is
found guilty, the disciplinary actions are taken.
In prosecution cases the Documentation proves to be one of the important evidence.
e. Enabling internal and external inspection teams and peer reviewers to assess compliance
with professional, legal and regulatory standards and requirements and
f. Assisting successor auditors and article assistant
The audit documentation constitute important evidence of matters considered by the auditor
during the course of the audit, some of which may not find a place in his report submitted to
the shareholders or the directors, for the reason that on the basis of an explanation given to
him by the management, he, on being satisfied, decided to drop them. As such,
1. Audit notes can be an important defense for the auditor in the event of an
action for negligence in the discharge of his duties being subsequently brought
against him.
2. The working papers provide guidance to the audit staff with regard to the
manner of checking the schedule.
3. The auditor is able to fix responsibility on the staff member who signs each
schedule checked by him
4. It acts as evidence in the court of law when a charge of negligence is brought
against the auditor.
5. It acts as the process of planning for the auditor so that he can estimate the
time that may be required for checking the schedules.
6. Provide a source of information for non-audit purpose-Working papers can
serve as a repository of information that may assist in non-audit tasks. Audit
working papers often provide convenient summarizations of auditee data and
may be useful in ways unrelated to the original audit assignment. For example,
models of the management control framework may be helpful to auditees as
planning input for system design changes or as a training device for their staff.
Also, the work done by auditors may be useful as input to other studies such as
those performed by program evaluators.
As specified in the SA -230, the auditor should adopt reasonable procedures for custody and
confidentiality of his working papers and should retain them for a period of time sufficient to
meet the needs of his practice and satisfy any associated legal or professional requirements of
record retention.
Sometimes, the clients and the other auditors seek access to their audit working papers. At
that point, the auditor should be aware of his rights as specified in SA -230 as follows:
1. The paragraph 13 therein says, Working Papers are the property of the
Auditor. However the auditor may at his discretion, make portions of or
extracts from are working papers available to his client and other auditors.
2. It is provided in paragraph 14 that the Auditor should adopt reasonable
procedures for custody and confidentiality of his working papers
3. Part 1 of the second schedule to the Chartered Accountants Act, 1949,
provides that a Chartered Accountant in practice shall be deemed to be guilty
of professional misconduct, if he discloses information acquired in the course
of his professional engagement to any person other than his client, without
consent of his client or otherwise than as required by any law for the time
being in force.
4. Even the client does not have a right to access the working papers of the
auditor. However the auditor may at his discretion make portions of or extracts
from his working papers available to the client.
ii]
iii]
When to plan
As is common in planning for any other activity, it should be noted that Planning is not a
discrete phase of an audit, but rather a continual and iterative process that often begins shortly
after (or in connection with) the completion of the previous audit and continues until the
completion of the current audit engagement. However, in planning an audit, the auditor
considers the timing of certain planning activities and audit procedures that need to be
completed prior to the performance of further audit procedures. For example, the auditor
plans the discussion among engagement team members:
i]
ii]
iii]
iv]
v]
vi]
Prior to identifying and assessing the risks of material misstatement and performing further
audit procedures at the assertion level for classes of transactions, account balances, and
disclosures that are responsive to those risks.
Preliminary Engagement Activities
Audit planning is preceded by performance of the following activities before beginning of the
current audit engagement:
i]
Perform procedures regarding the continuance of the client relationship and the specific
audit engagement
ii]
iii]
The purpose of performing these preliminary engagement activities is to help ensure that the
auditor has considered any events or circumstances that may adversely affect the auditors
ability to plan and perform the audit engagement to reduce audit risk to an acceptably low
level. Performing these preliminary engagement activities helps to ensure that the auditor
plans an audit engagement for which:
i]
The auditor maintains the necessary independence and ability to perform the
engagement.
ii]
There are no issues with management integrity that may affect the auditors willingness
to continue the engagement.
iii]
Planning Activities
These involve:
i]
ii]
In developing the overall audit strategy, the auditor should consider the results of preliminary
engagement activities and, where practicable, experience gained on other engagements
performed for the entity.
The following are examples of matters the auditor may consider in establishing the overall
audit strategy for an engagement.
The expected audit coverage, including the number and locations of components to be
included.
The nature of the control relationships between a parent and its components that
determine how the group is to be consolidated.
The nature of the business segments to be audited, including the need for specialized
knowledge.
The reporting currency to be used, including any need for currency translation for the
financial information audited.
The availability of the work of internal auditors and the extent of the auditors
potential reliance on such work.
The entitys use of service organizations and how the auditor may obtain evidence
concerning the design or operation of controls performed by them.
The expected use of audit evidence obtained in prior audits, for example, audit
evidence related to risk assessment procedures and tests of controls.
The coordination of the expected coverage and timing of the audit work with any
reviews of interim financial information and the effect on the audit of the information
obtained during such reviews.
The discussion of matters that may affect the audit with firm personnel responsible for
performing other services to the entity.
The entitys timetable for reporting, such as at interim and final stages.
The organization of meetings with management and those charged with governance to
discuss the nature, extent and timing of the audit work.
The discussion with management and those charged with governance regarding the
expected type and timing of reports to be issued and other communications, both
written and oral, including the auditors report, management letters and
communications to those charged with governance.
Communication with auditors of components regarding the expected types and timing
of reports to be issued and other communications in connection with the audit of
components.
Whether there are any other expected communications with third parties, including
any statutory or contractual reporting responsibilities arising from the audit.
The impact of the assessed risk of material misstatement at the overall financial
statement level on direction, supervision and review.
The selection of the engagement team (including, where necessary, the engagement
quality control reviewer) and the assignment of audit work to the team members,
including the assignment of appropriately experienced team members to areas where
there may be higher risks of material misstatement.
The manner in which the auditor emphasizes to engagement team members the need
to maintain a questioning mind and to exercise professional skepticism in gathering
and evaluating audit evidence.
Volume of transactions, which may determine whether it is more efficient for the
auditor to rely on internal control.
The process of developing the overall audit strategy helps the auditor to ascertain the nature,
timing and extent of resources necessary to perform the engagement. The overall audit
strategy sets out clearly:
i]
The resources to deploy for specific audit areas, such as the use of appropriately
experienced team members for high risk areas or the involvement of experts on
complex matters;
ii]
The amount of resources to allocate to specific audit areas, such as the number of team
members assigned to observe the inventory count at material locations, the extent of
review of other auditors work in the case of group audits, or the audit budget in hours
to allocate to high risk areas;
iii]
When these resources are deployed, such as whether at an interim audit stage or at key
cut-off dates; and
iv]
How such resources are managed, directed and supervised, such as when team briefing
and debriefing meetings are expected to be held, how engagement partner and manager
reviews are expected to take place (for example, on-site or off-site), and whether to
complete engagement quality control reviews.
Once the overall audit strategy has been established, the auditor is able to start the
development of a more detailed audit plan to address the various matters identified in the
overall audit strategy.
The audit plan is more detailed than the overall audit strategy and includes the nature, timing
and extent of audit procedures to be performed by engagement team members in order to
obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level.
Documentation of the audit plan also serves as a record of the proper planning and
performance of the audit procedures that can be reviewed and approved prior to the
performance of further audit procedures.
A description of the nature, timing and extent of planned risk assessment procedures
sufficient to assess the risks of material misstatement,
ii]
A description of the nature, timing and extent of planned further audit procedures at the
assertion level for each material class of transactions, account balance, and disclosure.
The plan for further audit procedures reflects the auditors decision whether to test the
operating effectiveness of controls, and the nature, timing and extent of planned
substantive procedures; and
iii]
Such other audit procedures required to be carried out for the engagement in order to
comply with ISAs (for example, seeking direct communication with the entitys
lawyers).
contradicts the audit evidence obtained with respect to the testing of the operating
effectiveness of controls. In such circumstances, the auditor re-evaluates the planned audit
procedures, based on the revised consideration of assessed risks at the assertion level for all
or some of the classes of transactions, account balances or disclosures.
AUDITING
Planning for the Direction, Supervision and Review
ISA 300 requires the auditor to plan the nature, timing and extent of direction and supervision
of engagement team members and review of their work.
The nature, timing and extent of the direction and supervision of engagement team members
and review of their work vary depending on many factors, including:
i]
ii]
iii]
iv]
The auditor should plan the nature, timing and extent of direction and supervision of
engagement team members based on the assessed risk of material misstatement. As the
assessed risk of material misstatement increases, a given area of the audit, the auditor
ordinarily increases the extent and timeliness of direction and supervision of engagement
team members and performs a more detailed review of their work. Similarly, the auditor
should plan the nature, timing and extent of review of the engagement teams work based on
the capabilities and competence of the individual team members performing the audit work.
In audits of small entities, an audit may be carried out entirely by the audit engagement
partner (who may be a sole practitioner). In such situations, questions of direction and
supervision of engagement team members and review of their work do not arise as the audit
engagement partner, having personally conducted all aspects of the work, is aware of all
material issues.
The audit engagement partner (or sole practitioner) nevertheless needs to be satisfied that the
audit has been conducted in accordance with ISAs. Forming an objective view on the
appropriateness of the judgments made in the course of the audit can present practical
problems when the same individual also performed the entire audit. When particularly
complex or unusual issues are involved, and the audit is performed by a sole practitioner, it
may be desirable to plan to consult with other suitably-experienced auditors or the auditors
professional body.
The form and extent of documentation depend on such matters as the size and complexity of
the entity, materiality, the extent of other documentation, and the circumstances of the
specific audit engagement.
The auditor should perform the following activities prior to starting an initial audit:
i]
Perform procedures regarding the acceptance of the client relationship and the specific
audit engagement
ii]
Communicate with the previous auditor, where there has been a change of auditors, in
compliance with relevant ethical requirements.
The purpose and objective of planning the audit are the same whether the audit is an initial or
recurring engagement. However, for an initial audit, the auditor may need to expand the
planning activities because the auditor does not ordinarily have the previous experience with
the entity that is considered when planning recurring engagements. For initial audits,
additional matters the auditor may consider in developing the overall audit strategy and audit
plan include the following:
i]
ii]
Any major issues (including the application of accounting principles or of auditing and
reporting standards) discussed with management in connection with the initial selection
as auditors, the communication of these matters to those charged with governance and
how these matters affect the overall audit strategy and audit plan.
iii]
The planned audit procedures to obtain sufficient appropriate audit evidence regarding
opening balances [ISA 510, Initial EngagementsOpening Balances].
iv]
v]
Other procedures required by the firms system of quality control for initial audit
engagements (for example, the firms system of quality control may require the
involvement of another partner or senior individual to review the overall audit strategy
prior to commencing significant audit procedures or to review reports prior to their
issuance).
b) Completeness and Accuracy As a reviewer of documentation, if you have to ask the audit
staff basic questions about the audit, the documentation probably does not really serve the
purpose.
Work papers should be complete, accurate, and support observations, testing, conclusions,
and recommendations. They should also show the nature and scope of the work performed.
c) Pertinence Limit the Information in working papers to matters that are important and
necessary to support the objectives and scope established for the assignment.
d) Logical Arrangement File the Working papers in a logical order.
e) Legibility and Neatness Be neat in your work. Working papers should be legible and as
neat as practical. Sloppy work papers may lose their worth as evidence. Crowding and
writing between lines should be avoided by anticipating space needs and arranging the work
papers before writing.
f) Safety- Keep your work papers safe and retrievable
g) Initial and Date- Put your initials and date on every working paper
h) Summary of conclusions- Summarize the results of work performed and identify the
overall significance of any weaknesses or exceptions found.
Epilogue
It is clear from the above discussion that the Proper Documentation creates more
opportunities to offer new services. It helps in improving the writing and communication
skills of auditors and assistants. It acts as a reminder to clients of what has been done for
them thus helping the auditors.
In general it is opined that this concept of Audit Documentation provides organizational
flexibility to enable the professional expertise and entrepreneurial initiative to combine,
organize and operate in a flexible, innovative and efficient manner. It is needless to say that
such a measure is justified in the context of global economic trends that facilitates
investments and provision of services to flow across borders for the practicing members of
The Institute of Chartered Accountants of India.