AU Section 339[This section was effective for audits of financial statements for periods beginning on or after May 15, 2002. It was superseded by PCAOB Auditing Standard No. 3, Audit Documentation, effective for audits of financial statements, which may include an audit of internal control over financial reporting, with respect to fiscal years ending on or after November 15, 2004. For other engagements conducted pursuant to the standards of the PCAOB, including reviews of interim financial information, this standard takes effect beginning with the first quarter ending after the first financial statement audit covered by this standard. See PCAOB Release 2004-006.] Show
(Supersedes SAS Nos. 1, section 338, and 41)Source: SAS No. 96.See section 9339 for interpretations of this section.Effective for audits of financial statements for periods beginning on or after May 15, 2002. Earlier application is permitted.Introduction.01The auditor should prepare and maintain audit documentation, the form and content of which should be designed to meet the circumstances of the particular audit engagement. Audit documentation is the principal record of auditing procedures applied, evidence obtained, and conclusions reached by the auditor in the engagement. The quantity, type, and content of audit documentation are matters of the auditor’s professional judgment. .02Other Statements on Auditing Standards contain specific documentation requirements (see Appendix A [paragraph .15]). Additionally, specific documentation requirements may be included in other standards (for example, government auditing standards), laws, and regulations applicable to the engagement. .03Audit documentation serves mainly to:
Content of Audit Documentation.04Audit documentation should be sufficient to show that standards of fieldwork have been observed as follows:
.05Examples of audit documentation are audit programs, fn 3 analyses, memoranda, letters of confirmation and representation, abstracts or copies of entity documents, and schedules or commentaries prepared or obtained by the auditor. Audit documentation may be in paper form, electronic form, or other media. .06Audit documentation should be sufficient to (a) enable members of the engagement team with supervision and review responsibilities to understand the nature, timing, extent, and results of auditing procedures performed, and the evidence obtained; fn 4 (b) indicate the engagement team member(s) who performed and reviewed the work; and (c) show that the accounting records agree or reconcile with the financial statements or other information being reported on. .07In determining the nature and extent of the documentation for a particular audit area or auditing procedure, the auditor should consider the following factors:
.08Audit documentation should include abstracts or copies of significant contracts or agreements that were examined to evaluate the accounting for significant transactions. Additionally, audit documentation of tests of operating effectiveness of controls and substantive tests of details that involve inspection of documents or confirmation should include an identification of the items tested. fn 5 .09In addition, the auditor should document audit findings or issues that in his or her judgment are significant, actions taken to address them (including any additional evidence obtained), and the basis for the final conclusions reached. Significant audit findings or issues include the following:
Ownership and Confidentiality of Audit Documentation.10Audit documentation is the property of the auditor, and some states recognize this right of ownership in their statutes. The auditor should adopt reasonable procedures to retain audit documentation for a period of time sufficient to meet the needs of his or her practice and to satisfy any applicable legal or regulatory requirements for records retention. fn 7 .11The auditor has an ethical, and in some situations a legal, obligation to maintain the confidentiality of client information. fn 8 Because audit documentation often contains confidential client information, the auditor should adopt reasonable procedures to maintain the confidentiality of that information. .12The auditor also should adopt reasonable procedures to prevent unauthorized access to the audit documentation. .13Certain audit documentation may sometimes serve as a useful reference source for the client, but it should not be regarded as a part of, or a substitute for, the client’s accounting records. Effective Date.14This section is effective for audits of financial statements for periods beginning on or after May 15, 2002. Earlier application is permitted. Appendix AAudit Documentation Requirements in Other Statements on Auditing Standards.151. Documentation requirements are included in other Statements on Auditing Standards. This section does not change the requirement in:
Appendix BAmendments to Statements on Auditing Standards.16Amendment to Section 312, Audit Risk and Materiality in Conducting an Audit1. This amendment adds a requirement to section 312 to document the nature and effect of misstatements that the auditor aggregates as well as the auditor’s conclusion as to whether the aggregated misstatements cause the financial statements to be materially misstated. The amendment adds the following paragraph to section 312:
2. Section 312.40 and .41 will be renumbered as section 312.41 and .42, respectively, as a result of the paragraph added by this amendment. Amendment to Section 329, Analytical Procedures3. The following amendment adds a documentation requirement to section 329. The new section and paragraph, which will immediately follow paragraph .21, are the following:
4. Section 329.22 and .23 will be renumbered as section 329.23 and .24, respectively, as a result of the paragraph added by this amendment. Amendment to section 341, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern5. The following amendment adds a requirement to section 341 for the auditor to document (a) the conditions or events that led him or her to believe that there is substantial doubt about the entity’s ability to continue as a going concern; (b) the work performed in connection with the auditor’s evaluation of management’s plans; (c) the auditor’s conclusion as to whether substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time remains or is alleviated; and (d) the consideration and effect of that conclusion on the financial statements, disclosures, and the audit report. The new section and paragraph, which will immediately follow paragraph .16, are the following:
6. Section 341.17 will be renumbered as section 341.18 as a result of the paragraph added by this amendment. Which of the following documentation is required for an audit in accordance with generally accepted auditing standards *?The correct answer is b) A client engagement letter that summarizes the timing and details of the auditor's planned fieldwork.
Which of the following is NOT required documentation in an audit in accordance with generally accepted?Which of the following documentation is not required for an audit in accordance with GAAP? A flowchart depicting the auditor's understanding of the design of internal control.
What documentation is needed for an audit?When preparing for an audit, you need to counter-check and ensure that all the transaction documents, such as check books, purchases invoices, sales receipts, journal vouchers, bank statements, tax returns, petty cash records and inventory records are in order.
Which of the following categories is included in generally accepted auditing standards?C. Standards of field work. The AICPA's prior generally accepted auditing standards (GAAS) included three categories: General Standards, Standards of Field Work, and the Standards of Reporting.
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