For all audit engagements, documentation must evidence compliance with the requirements of applicable SASs. Because SASs are written to be applicable audit engagements of all sizes, compliance for a small audit will likely be different than for a large audit. Audit documentation of compliance, therefore, is also likely to be different.

Here is a list of annual “key” documentation that will support most small audit strategies:

• Client acceptance and retention evaluations
• General ledger analysis worksheet
• Small audit internal control questionnaire, flowcharts or memos by financial statement classification
• Systems walk-through memo or other documentation
• Analytical procedures worksheets for engagement planning and review
• Risk of material misstatements evaluation by financial statements classification
• Linking working paper to guide the selection of tests of controls and tests of balances procedures based on risk
• Tolerable misstatements calculation by financial statements classification
• Sampling and non-sampling decisions worksheet
• Audit planning document summarizing audit strategies
• Small audit programs tailored for audit risk

Future blogs will discuss the impact of a CPA firm’s quality control, preparation of this documentation, formulation of audit strategies and related opportunities for efficiencies. Visit us often!