Importance of Working Papers In Audit

Audit working papers are an integral part of all audit processes. In the course of an audit, it is extremely important to ensure that the audit is performed efficiently without any hassle. An audit working paper is a document that facilitates a smooth and effective audit process. The document facilitates effective planning of the audit and further helps establish procedures that ensure systematic execution of the audit process.

In this regard, it is also important that the auditor takes into consideration the audit assertions to give an opinion based on their professional judgment with substantial evidence. Documents like the audit working paper provide a record of evidence and audit findings that helps in the drafting of a final audit report with clear recommendations. Today, elaborating the significance of working papers in an audit, we have explained why they are an integral part of an audit process. So, let us take a closer look at the term audit working paper and then move on to understanding its importance. 

What is an Audit, Working Paper?

Audit Working Papers are official documents that auditors use during the course of the audit process. They are required to prepare and organize the working papers in a manner that helps them conduct the audit process appropriately. Typically in a cyber-security industry, the audit working paper includes papers and documents with details about systems, networks, and infrastructure that is under audit.

The document describes details of the audit and information such as the method of examination, sampling population, sampling size, personnel interviewed, locations visited, findings, conclusions, and recommendations to fix the gap.  The audit working paper works as a material of record and evidence regarding the company’s IT Infrastructure, current security posture, and other relevant details. However, it is also important to note that the auditor must avoid accumulating and making extensive copies of working papers having little or no relevance and stick to making relevant records.   

What is the Objective behind having Audit Working Papers?

  • The working papers serve as an important audit tool that gives clear direction in the audit work process. 
  • The document also serves as a permanent record of the audit work performed during the course of time.
  • They are useful to the auditor for conducting the audit work taking into account the previous audit findings. 
  • Working Papers work as a reliable guide for planning future audit assignments.
  • The audit working papers assure that the audit performed was accurate and complete.
  • Working papers are necessary to corroborate the work and findings performed during the audit. 
  • The document support and evidence of the findings of the audit which is essential for establishing a future plan of action.

Importance of Audit Working Papers

Planning the Audit 

Audit Working Papers are documents that work as a resource for efficiently planning and conducting an audit. It works as a guide and provides clear direction and timelines for the audit process. The document ensures that the audits are duly executed with a well-planned strategy in the most effective manner.

Determines Appropriate Audit Conduct

The document helps measure the audit work performed by the audit assistants. With this audit working paper, the auditor can know whether or not the instructions for the audit were followed. Further, preparing the document works as a guide to the assistant auditor to summarize the work done by them.

Audit Quality Control 

Audit Working Papers are also essential for audit quality control purposes. The document reflects the substantial work carried out in the audit process and further works as proof of the tasks performed. In this regard, the audit working paper also demonstrates the depth to which the audit was conducted in the audit process by the auditor. The document clearly demonstrates the completeness of the audit.

Drawing Conclusions

Working papers are essential for concluding the audit findings obtained during the course of time. Such findings further help in providing useful recommendations based on the drawn claims or findings.  It is also useful for providing assurances pertaining to the quality standards that were followed in the audit process. Not just that the document also helps suggest possible areas of improvement that can be worked on for the future.

Preparing Audit Report

The auditor prepares and finalizes the audit report post conducting an audit process. The reports drafted would be based on the findings and other relevant details or information contained in the working papers. The working paper helps the auditor prepare the report without any hassle or waste of time. 

Document Evidence

 Working audits are valuable documentary evidence in the Court of law in case of a charge levied on the auditor for negligence. These documents work as evidence of the task performed by the auditor during the course of the audit. In the case of certain questionable claims put forth by the auditor, the document substantiates such claims. In this regard, the Audit Working Papers draw a clear connection and logic to the claims made by the auditor.

Permanent Record

Retention of records and evidence is crucial to any audit process and an integral part of an audit report. This is in particular essential because it helps the auditors conduct the audit effectively the next year considering this document. The previous year’s working papers are really helpful for planning and conducting the current year’s audit. Further, it also facilitates easy transition in case of a new auditor auditing in the current year. This helps in the understanding of the dynamics of the company. That said, the working papers are permanent, documented records of the work performed by the auditor that can be referred to for future audit purposes. 

Conclusion 

Audit Working Papers are a very important part of an audit process. These documents facilitate a quick run-through after the audit process for drawing relevant conclusions and recommendations. Also, given the fact that audit is a time-consuming process, taking several days or months, it may be difficult for auditors to keep a track of it till the end of the audit program. But, with these documents in hand, it can help the auditors run through the procedure quickly and relatively easily.

Moreover, since it provides evidence to all the findings the document should be drafted sufficiently detailed and complete so that even if a new auditor comes on board can understand the kind of audit and work performed, the findings, recommendations, and conclusions reached for planning the future course of action.

Narendra Sahoo
Narendra Sahoo

Narendra Sahoo (PCI QSA, PCI QPA, CISSP, CISA, and CRISC) is the Founder and Director of VISTA InfoSec, a global Information Security Consulting firm, based in the US, Singapore & India. Mr. Sahoo holds more than 25 years of experience in the IT Industry, with expertise in Information Risk Consulting, Assessment, & Compliance services. VISTA InfoSec specializes in Information Security audit, consulting and certification services which include GDPR, HIPAA, CCPA, NESA, MAS-TRM, PCI DSS Compliance & Audit, PCI PIN, SOC2 Compliance & Audit, PDPA, PDPB to name a few. The company has for years (since 2004) worked with organizations across the globe to address the Regulatory and Information Security challenges in their industry. VISTA InfoSec has been instrumental in helping top multinational companies achieve compliance and secure their IT infrastructure.