Audit Documentation

# ? Audit Documentation (NSA-230)

## ? Presented By:
**Kiran Bista**  
**R.S. & Associates – Chartered Accountants**

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## ? What is Audit Documentation?

Audit documentation (also called **working papers**) is a **record of**:

- Audit procedures performed
- Relevant audit evidence obtained
- Conclusions reached

### ? Audit File
- Contains all audit documentation.
- Can be **physical** or **electronic**.
- Specific to a particular **audit engagement**.

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## ? Purpose of Audit Documentation

- Evidence of auditor’s **conclusions** and **compliance** with NSA and legal standards.
- Supports **planning**, **execution**, and **review**.
- Helps **external reviewers** (e.g., ICAN or regulatory bodies).
- Ensures transparency and quality assurance.

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## ? Key Characteristics of Documentation

- **Timely:** Prepared during the audit.
- **Sufficient:** Understandable to an outsider (experienced auditor).
- **Comprehensive:** Must cover nature, timing, extent (NTE) of procedures.
- **Retained:** For **7 years** post-audit report issuance.

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## ? Form, Content, and Extent

Must be detailed enough for a new auditor to understand:

- What was done
- Why it was done
- Results and conclusions

### ? Influencing Factors:
- Size and complexity of the entity
- Nature and risk of procedures
- Tools and methodology used

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## ? Stages of Audit Documentation

### ? 1. **Planning Stage**
- Appointment & Engagement Letter
- Entry meeting minutes
- Understanding entity and legal framework
- Audit plan & program
- Preliminary analytical procedures

### ?? 2. **Execution Stage**
#### Balance Sheet:
- Cash: Bank confirmations
- Inventory: Records + Physical count
- Receivables: Aging and recovery
- Fixed assets: Ownership and depreciation
- Loans: Confirmations

#### Profit & Loss:
- Revenue: Sales invoices, recognition
- Expenses: Payroll, allocations, COGS
- Analytical review of fluctuations

#### Notes to Accounts:
- Accounting policies
- Related party transactions
- Legal proceedings

### ? 3. **Review & Completion Stage**
- Management letter & responses
- NSA compliance checklist
- Representation letter
- Exit meeting minutes
- Final audit report and financials

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## ? Types of Audit Files

### ?? Permanent Audit File
Contains long-term reference materials:
- Legal documents (MOA, AOA, tax, leases)
- Organizational chart & management details
- Internal control systems
- Previous audit reports

### ? Current Audit File
Specific to current year audit:
- Planning documents
- Current financials
- Evidence & test results
- Communications & final report

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## ? Audit File Ownership and Retention

Aspect	Requirement
Retention Period	7 years
Assembly Deadline	60 days post-report
Ownership	Auditor's property
Disclosure Allowed	Legal/Regulator requests, successor audit
Confidentiality	Must not be shared without legal basis

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## ? Hot File vs Cold File Review

Feature	Hot File Review	Cold File Review
Timing	During audit fieldwork	After audit completion
Interaction	Direct with audit team	Independent quality review
Purpose	Real-time corrections	Future improvements
Best For	High-risk audits	Standard compliance & ICAN inspections

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> **"If it’s not documented, it didn’t happen!"**  
> — Every step, judgment, and finding must be recorded.

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## ? Thank You  
**R.S. & Associates, Chartered Accountants**

? info@rsassociates.com.np  
? [www.rsassociates.com.np](https://www.rsassociates.com.np)