AU-C Section 230: Audit Documentation

"Scope of This Section

.01 This section addresses the auditor's responsibility to prepare audit documentation for an audit of financial statements. The exhibit, "Audit Documentation Requirements in Other AU-C Sections," lists other AU-C sections that contain specific documentation requirements and guidance. The specific documentation requirements of other AU-C sections do not limit the application of this section. Law, regulation, or other standards may establish additional documentation requirements.

Effective Date

.04 This section is effective for audits of financial statements for periods ending on or after December 15, 2012.

Objective

.05 The objective of the auditor is to prepare documentation that provides

a. a sufficient and appropriate record of the basis for the auditor's report; and

b. evidence that the audit was planned and performed in accordance with GAAS and applicable legal and regulatory requirements."

"Nature and Purposes of Audit Documentation

.02 Audit documentation that meets the requirements of this section and the specific documentation requirements of other relevant AU-C sections provides

a. evidence of the auditor's basis for a conclusion about the achievement of the overall objectives of the auditor; and

b. evidence that the audit was planned and performed in accordance with generally accepted auditing standards (GAAS) and applicable legal and regulatory requirements.

.03 Audit documentation serves a number of additional purposes, including the following:

• Assisting the engagement team to plan and perform the audit

• Assisting members of the engagement team responsible for supervision to direct and supervise the audit work and to discharge their review responsibilities in accordance with section 220, Quality Control for an Engagement Conducted in accordance With Generally Accepted Auditing Standards

• Enabling the engagement team to demonstrate that it is accountable for its work by documenting the procedures performed, the audit evidence examined, and the conclusions reached

• Retaining a record of matters of continuing significance to future audits of the same entity"

".07 The auditor should prepare audit documentation on a timely basis. (Ref: par. .A3)."

".08 The auditor should prepare audit documentation that is sufficient to enable an experienced auditor, having no previous connection with the audit, to understand (Ref: par. .A4–.A7 and .A19–.A20)

• the nature, timing, and extent of the audit procedures performed to comply with GAAS and applicable legal and regulatory requirements; (Ref: par. .A8–.A9)

• the results of the audit procedures performed, and the audit evidence obtained; and

• significant findings or issues arising during the audit, the conclusions reached thereon, and significant professional judgments made in reaching those conclusions. (Ref: par. .A10–.A13)"

".09 In documenting the nature, timing, and extent of audit procedures performed, the auditor should record

• the identifying characteristics of the specific items or matters tested; (Ref: par. .A14)

• who performed the audit work and the date such work was completed; and

• who reviewed the audit work performed and the date and extent of such review. (Ref: par. .A15)

.10 For audit procedures related to the inspection of significant contracts or agreements, the auditor should include abstracts or copies of those contracts or agreements in the audit documentation.

.11 The auditor should document discussions of significant findings or issues with management, those charged with governance, and others, including the nature of the significant findings or issues discussed, and when and with whom the discussions took place. (Ref: par. .A16)

.12 If the auditor identified information that is inconsistent with the auditor's final conclusion regarding a significant finding or issue, the auditor should document how the auditor addressed the inconsistency. (Ref: par. .A17–.A18)"

".13 If, in rare circumstances, the auditor judges it necessary to depart from a relevant presumptively mandatory requirement, the auditor must document the justification for the departure and how the alternative audit procedures performed in the circumstances were sufficient to achieve the intent of that requirement. (Ref: par. .A21–.A22)"

".14 If, in rare circumstances, the auditor performs new or additional audit procedures or draws new conclusions after the date of the auditor's report, the auditor should document (Ref: par. .A23)

a. the circumstances encountered;

b. the new or additional audit procedures performed, audit evidence obtained, and conclusions reached, and their effect on the auditor's report; and

c. when and by whom the resulting changes to audit documentation were made and reviewed."

".15 The auditor should document the report release date in the audit documentation. .16 The auditor should assemble the audit documentation in an audit file and complete the administrative process of assembling the final audit file on a timely basis, no later than 60 days following the report release date. (Ref: par. .A24–.A26)

.17 After the documentation completion date, the auditor should not delete or discard audit documentation of any nature before the end of the specified retention period. Such retention period, however, should not be shorter than five years from the report release date. (Ref: par. .A27–.A29)

.18 In circumstances other than those addressed in paragraph .14 in which the auditor finds it necessary to modify existing audit documentation or add new audit documentation after the documentation completion date, the auditor should, regardless of the nature of the modifications or additions, document (Ref: par. .A28)

a. the specific reasons for making the changes; and

b. when and by whom they were made and reviewed.

.19 The auditor should adopt reasonable procedures to maintain the confidentiality of client information. "