An audit working paper is a document prepared by the auditor to document all the information, evidence, and analysis obtained during the audit process. This document is abbreviated KKA, and in English it is called an audit working paper.
KKA is not just a work record. This document is the supporting evidence underlying the auditor's opinion on the fairness of the financial statements, and also proof that the audit was carried out in accordance with professional standards. Without adequate working papers, an audit opinion is practically indefensible if questioned.
This article discusses the meaning of audit working papers, their elements and contents, their purpose and function, the characteristics of good working papers, their types, and the rules for retaining them.
Meaning of Audit Working Papers (KKA)
Audit working papers are records prepared and gathered by the auditor during the audit engagement, containing the information and evidence underlying its conclusion. KKA is the link between the work the auditor performs in the field and the audit opinion that is ultimately issued.
What does KKA stand for?
KKA stands for Kertas Kerja Audit (Audit Working Paper). In the public-sector audit and government internal examination environment, the term often used is KKP or kertas kerja pemeriksaan. Both refer to the same documentation, only differing in naming convention.
Working paper is the same term
Working paper is the English equivalent of kertas kerja, and in an audit context it is written in full as audit working paper. This term is widely used at public accounting firms that follow international standards, while Indonesian-language documents and regulations generally call it kertas kerja audit or KKA. There is no difference in meaning between the two.
Elements and Contents of Audit Working Papers
The information elements contained in audit working papers include engagement identity, documentation of work performed, and the conclusions drawn by the auditor. The following are the elements generally required on every KKA sheet.
| Element | Content | Its Function |
|---|---|---|
| Identity | Name of the entity audited, audit period, name of the account or process examined | Ensures working papers are not mixed up between engagements |
| Index and cross-reference | KKA numbering code and references to other related working papers | Makes it easier to trace from a finding to its supporting evidence |
| Testing objective | The assertion or risk to be tested through that procedure | Connects field work to the audit plan |
| Procedure performed | Description of the testing steps, data source, and sample extent | Shows that the work can be repeated and verified |
| Evidence and results | Copies of documents, calculation results, interview notes, test marks (tickmark) | Forms the factual basis for the conclusion |
| Conclusion | The auditor's conclusion on that testing objective | Bridges the evidence to the final opinion |
| Preparer and reviewer | Name and date of the preparer and re-review | Confirms accountability and the level of supervision |
See also: Example of a Company Audit Working Paper
Purpose, Function, and Benefits of Audit Working Papers
The benefits of audit working papers boil down to the following four main functions.
1. Support the Auditor's Opinion
KKA is the strong evidence underlying the auditor's opinion on the fairness of the financial statements. Through the working papers, the auditor shows that the audit was carried out thoroughly and competently, and that all relevant evidence was considered before the opinion was given.
2. Documenting the Audit Process
KKA contains detailed records of the entire tahapan audit that was followed, from planning through completion. This documentation is important to show regulators, quality reviewers, and users of the financial statements how the auditor worked and reached its conclusions.
3. Improving Audit Quality
Well-organized KKA helps the auditor maintain the quality of their work in several ways:
- Ensure all relevant evidence has been appropriately considered and analyzed.
- Helps the auditor identify and address potential audit problems earlier.
- Improves consistency and objectivity of the audit across engagements.
4. Improving Auditor Accountability
Audit working papers are evidence of the auditor's accountability for their work. KKA can be used to explain the basis of the auditor's opinion to other parties, while also showing that the auditor has met the applicable professional standards.
Characteristics of Good Audit Working Papers
The quality of KKA determines the quality of the audit as a whole. Here are five characteristics of good, proper audit working papers.
1. Completeness
KKA must contain all relevant information and evidence obtained during the audit process, so it is clearly shown that the auditor considered all evidence before giving their opinion. The information included covers the audit program, audit evidence, audit analysis, audit report, and other supporting working papers.
2. Accurate
KKA must be free of errors and reflect the actual conditions. Inaccuracy in working papers carries three consequences: it raises doubt about the auditor's credibility, it can potentially result in an inappropriate opinion, and it opens the door to information manipulation by irresponsible parties.
3. Organized
KKA must be organized with a consistent and logical numbering and naming system. Well-organized working papers make it easier for the auditor to find needed information, help track audit progress, and improve the efficiency of the whole engagement.
4. Clear
KKA must be written clearly and concisely in language that is easy to understand, avoiding excessive technical jargon. The practical benchmark is simple: another auditor not involved in the engagement should be able to understand what was done just by reading the working papers.
5. Consistent
KKA must be consistent with the audit program, audit report, and other information obtained during the engagement. There must be no contradiction between the content of the working papers and the reported conclusion, because such inconsistency directly weakens the auditor's opinion.
Types and Forms of Audit Working Papers
Audit working papers come in various forms, each with its own use in supporting the engagement. Here are five commonly used types of KKA.
1. Audit Program
Contains the audit plan to be carried out, including the audit objective, audit procedure, and the tests to be performed. The audit program is prepared before execution and serves as the auditor's guide throughout the engagement.
2. Bukti Audit
Contains the information and evidence obtained by the auditor during the audit process, which can be in the form of:
- Copies of documents: invoices, receipts, contracts, and financial statements.
- Auditor's note: results of observation, interviews, and testing.
- Data analysis: financial ratio analysis and trend analysis.
3. Audit Analysis
Contains the auditor's analysis of the information and evidence obtained, including explanation of audit findings, assessment of the risk of material misstatement, and the development of the audit conclusion.
4. Audit Report
Contains the auditor's opinion on the fairness of the financial statements along with other important information obtained during the engagement. The audit report is the final output of the audit process and is addressed to the entity's management, the board of directors, and users of the financial statements.
5. Other Supporting Working Papers
- Audit memo: notes and internal communication among audit team members.
- Correspondence working paper: correspondence with the entity's management and with external experts.
- Reconciliation working paper: reconciliation between data obtained by the auditor and data in the financial statements.
Ownership and Retention of Audit Working Papers
Audit working papers belong to the auditor or the public accounting firm carrying out the engagement, not to the entity being audited. Even so, that ownership comes with an obligation to maintain the confidentiality of all client information contained in them.
Auditing Standard (SA) 230 requires that audit documentation be retained for a specific period after the auditor's report is issued — generally not less than five years. This retention is needed for quality review, regulator inspection, and reference in subsequent engagements.
FAQ About Audit Working Papers
What are audit working papers?
Audit working papers (KKA) or audit working paper are documents auditors create to record the information and evidence obtained during the audit process. They serve as supporting evidence for the auditor's opinion on the fairness of the audited entity's financial statements.
What does KKA stand for?
KKA stands for Kertas Kerja Audit (Audit Working Paper). In the public-sector audit environment, the same documentation is often called KKP or kertas kerja pemeriksaan (examination working paper).
Working paper what is it?
Working paper is the English term for kertas kerja, and in an audit context it is called an audit working paper. Its meaning is exactly the same as kertas kerja audit or KKA.
What information elements are in an audit working paper?
The elements generally required: engagement identity, index and cross-reference, testing objective, description of the procedure performed, evidence and test results, the auditor's conclusion, and the name of the preparer and reviewer along with the dates.
What is the function of audit working papers in the audit process?
There are four main functions: supporting the auditor's opinion, documenting every audit stage from planning to completion, improving audit quality, and increasing the auditor's accountability for their work.
What are the characteristics of good audit working papers?
Five characteristics: complete (containing all relevant information and evidence), accurate (free of errors and reflecting the true state), organized (consistent arrangement and naming), clear (concise and easy to understand), and consistent with the audit program and audit report.
What are the types of audit working papers?
Five commonly used types: audit programs, audit evidence, audit analysis, audit reports, and other supporting working papers such as audit memos, correspondence working papers, and reconciliation working papers.
How long must audit working papers be kept?
Auditing Standard (SA) 230 requires that audit documentation be retained for a specific period after the auditor's report is issued, generally not less than five years, for quality review and regulator inspection purposes.
Who owns the audit working papers?
Audit working papers belong to the auditor or the public accounting firm carrying out the engagement, not to the entity being audited. This ownership comes with an obligation to maintain the confidentiality of client information.
Keep Audit Working Papers Better Organized with Audithink
Managing working papers manually across engagements, branches, and periods makes tracing from a finding to its supporting evidence time-consuming, and increases the risk of documents getting scattered. Audithink, internal audit management software for companies and state-owned enterprises in Indonesia, helping internal audit teams prepare indexed working papers, link evidence to every testing procedure, and maintain a review trail in one integrated platform.
Schedule an Audithink Demo to see how our working paper feature works.
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