The Runner Shop Case free essay sample

Audit documentation is the written record of the basis for the auditors conclusions that provides the support for the auditors representations. In addition, audit documentation includes records of the planning and performance of the work, the procedures performed, evidence obtained, and conclusions reached by the auditor. Audit documentation also may be referred to as work papers or working papers. In the runners shop case, audit documentation is significant for the audit work performed by Green and Brown, LLP, it has specific purpose to support the audit work. As we know, audit documentation has significant role in auditing because it enables auditors to provide reasonable assurance for clients. From reading the cases, Green and Brown, LLP has specific firm guidelines for audit documentation. Those guidelines have significant benefits in auditing the firm. According to the firm guideline, â€Å"tile, source of schedule, work performed, indexing, and tick mark should be included in the audit documentation. We will write a custom essay sample on The Runner Shop Case or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The benefits of guideline include: 1. The titles allow auditor quickly identifies the specific client and schedule purpose. 2. Indicating of source of schedule enable auditors make accurate audit testing on the client prepared documents and facilitates planning for the next audit period. 3. Work Performed clearly identifying who performed the work facilitates determination of follow-up questions that arise as well as planning for the next audit period. Signing initials enforce auditors to take the reasonability of preparing for the documents. 4. The organized indexing helps auditors to make a better cross-referencing. 5. Tick mark make sure that the specific work performed is correctly noted. Although Green and Brown, LLP provide guidelines for audit documentation, there are several deficiencies on the enclosed schedules. 2. No indication that FI 111 was prepared by company. 3. FI 111 does not include a reference for fixed asset addition. For the schedule FI 111 suggested entire loan of the two banks should be classified as current liability since TRS violated loan agreement. 5. The loan payment term for the First commercial bank is not verified. 6. Only Mary Lewis has review the FI 112 schedule and no one else. 7. The last interest payment dates on schedule F1 112 were not verified. 8. For schedule FI 113, the difference between estimated interest expense and actual interest expense should be compared to tolerable misstatement to etermine whether additional work was required The PCAOB â€Å"Audit Documentation† standard requires that the documentation be sufficient for an experienced auditor who had no association with the engagement be able to achieve two objectives: 1. Understand the nature, timing, extent and results of the procedures performed, evidence obtained and conclusions reached. 2. Determine who performed the work and the date such work was completed as well as the person who reviewed the work and the date such review occurred.