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!