SSA230 Summary (Nov 2015)
This SSA concerns the auditor’s responsibility to prepare audit documentation for an audit of financial statements.
The objective of documentation is to have a sufficient record of the basis of auditor’s report. Documentation serves as evidence that audit was planned in accordance with SSAs, applicable legal and regulatory requirements.
Audit documentation shall be prepared on a timely basis.
The documentation should be sufficient to enable an experienced auditor to understand. It shall include nature, timing and extent of audit procedures (including identifying characteristics of specific items tested, who performed the work and when, who reviewed the work and when), results of audit procedures, audit evidence obtained and significant matters arising during the audit.
Auditor should document discussions of significant matters with management and the nature of matters discussed, and the venue, personnel involved and timing of discussion.
Auditor shall assemble the audit documentation in an audit file and assemble the final audit file after date of audit report. Any modifications subsequently must be explained and by when/whom they were made.
Audit documentation should include things like audit program, analyses, issues memoranda, summaries of significant matters, letters of confirmation and representation, checklists, correspondences concerning significant matters.
Superseded/draft documents or audit reports need not be included in the audit file. It is not necessary to have a checklist for compliance with matters if compliance is already demonstrated by documents within the audit file.
Ultimately, the form/content/extent of audit documentation of significant matters is a matter of professional judgment.
There is no requirement per se to have every specific working paper to have evidence of review, but there needs to be documenting of what audit work was reviewed, who reviewed such work and when it was reviewed.
SSQC1 stipulates that the appropriate time limit to complete assembly of final audit file is not more than 60 days after date of auditor’s report. Companies need to establish P&P for retention of engagement documentation. Retention period is no shorter than 5 years from date of auditor’s report.