Guide to Using International Standards on Auditing in - IFAC

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<strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts
Typical audit documentation would include the items below.
Exhibit 16.4-2
Risk Response Phase
1. An audit plan that addresses:
• All material financial statement areas;
• The assessed risks of material misstatement at the financial
statement and assertion levels;
• The nature, timing, and extent of the further audit procedures
performed that respond <strong>to</strong> the assessed risks; and
• Significant risks identified.
2. Nature and extent of consultations with others.
3. Significance and nature of the evidence obtained <strong>to</strong> the assertion being tested.
4. A clear explanation of the results obtained from the test, and how any
exceptions or deviations were followed up. This includes:
• The basis for the test;
• The choice of population;
• The level of assessed risk; and
• The sampling intervals and choice of the starting point.
5. Actions taken as a result of auditing procedures that indicate:
• Need <strong>to</strong> modify planned auditing procedures;
• Material misstatements may exist;
• Omissions in the financial statements; or
• The existence of significant deficiencies in internal control over
financial reporting.
6. Changes, if any, required <strong>to</strong> the overall audit strategy.
7. Use of significant judgments applied on significant matters in
performing work and evaluating results.
8. Discussions with management on significant matters.
9. Memoranda, analysis, details of assumptions used, and how the validity
of the underlying information used was established.
10. Cross-references <strong>to</strong> supporting documentation and evidence that the financial
statements agree or reconcile with the underlying accounting records.
Comments
Audit documentation
should stand by
itself and not need
be supplemented by
oral explanations. See
experienced audi<strong>to</strong>r
discussion below.
Take care in choosing the
right population for the
assertion being tested.
Copies of client
records inspected are
not necessary on file,
but some identifying
characteristics(s), such as
a number or date, etc., is
required so that a person
could re-perform the test
if necessary.