Examples of corporate audit working papers can provide an understanding of the process of collecting evidence, recording findings, and preparing assessments during the audit process.
Audit working paper (KKA) refers to the documents used by the auditor during the audit process. This paper is used to record, analyze, and summarize what the auditor finds in the audit process. These documents can be supporting evidence for the auditor in making a conclusion.
For companies, KKA can be an objective proof of the examination, help management understand operational problems, form the basis for preparing improvement recommendations, facilitate the subsequent audit process, and accelerate management decision making.
What is corporate audit working paper?
Audit working papers are documents that the auditor uses during the audit process. These documents have been prepared in a structured, detailed, and clear manner in accordance with the needs of the audit.
Any evidence of testing, analytical procedures used, communications during the audit process, notes, and conclusions contained in the KKA.
KKA becomes an important element in the audit process. This document is an official document that documents all stages of the audit, as evidence that supports the findings and recommendations, helps auditors understand the audited entity, and ensures audits are carried out according to standards.
Types Of Audit Papers
The type of audit working paper used by the auditor, may depend on the purpose of the audit. Among them are the following.
1. Main
The main KKA documents the balances of the accounts examined during the audit process. This document not only reports the balances of these accounts, but also summarizes the findings of each account.
2. Supporters
Kka supporters document the documents and supporting evidence used auditor. to validate a specific transaction or balance. For example, document bank statements, invoices, receipts, bank account papers, and transaction journals.
3. Reconciliation
Furthermore, the reconciliation KKA documents the matching results of the company's financial statements and internal records, such as the company's cash book and bank statement. Such matching helps ensure the suitability of the audited report to the company's data.
4. Analysis
An analytical audit working paper documents the analysis and conclusions that the auditor makes of accounts or matters requiring special attention.
5. Audit Program
Kka audit program documents the audit procedures in detail. For example, the evidence to be collected, the way it is collected, the areas that need to be examined, and the purpose of each procedure.
General Structure Of Corporate Audit Working Papers
Corporate audit working papers sometimes have varied formats. May vary depending on the audit performed. But in general, here are the elements that are always present in the KKA.
- Title page - contains company information, such as company name, auditor team name, audit type and period, and working paper number or code.
- Audit objective - contains the things to be assessed and their areas of focus.
- Scope of audit - contains limitations on the examination, including the scope of the document, the time or period used, and the division or process being examined.
- Audit standards or criteria - contains references used by auditors, such as company SOPs, government regulations, accounting standards, and labor regulations.
- Methods and audit procedure - contains the approaches used, such as interviews, observations, document sampling, data reconciliation, and control testing.
- Audit findings - kka core section containing a description of the problem, supporting evidence, impact or risk, and root causes of the related problem.
- Conclusion - contains a summary of internal control conditions, compliance levels, and achievement of audit objectives.
- Repair recommendations - contains auditor's suggestions for the company, both improvements, adjustments, and enhancements.
- Follow-up - contains a repair action plan along with the person in charge, deadlines, and completion status.
- Attachments - contains supporting documents such as, screenshot audit evidence, results of data analysis, additional working papers, and graphs or tables.
How To Make A Company Audit Working Paper
The preparation of audit working paper documents must be done in a structured and clear manner, so that it can document the audit process based on its flow. Here are the steps in making KKA.
1. Define goals and scope
The first step in creating a KKA is to determine what will be tested and the areas that will be the focus of the audit. In this case, the audit period and the standards used are also determined.
2. Arrange An Audit Program
Next is to develop an audit program or plan. This planning will help the auditor to get a clear picture of the audit steps. This planning includes determining the team, time, budget, procedures to be used, detailed instructions, to test methods.
3. Collect Audit Evidence
At this stage, the auditor begins work on the audit procedure, records all the findings, and collects evidence. In addition, the auditor also documents the results of the auditor's tests, analyzes and calculations, to field observation records.
See also: Audit Evidence: Meaning, Types, Properties, Characteristics, & Examples
4. Perform Testing
After that, the auditor conducts testing of internal and substantive controls. This will ensure whether the company complies with existing SOPs and the numbers or transactions are carried out correctly. The test results are presented in a table or summary.
5. Compiling Findings
The next stage is to compile the findings during the audit process. Starting from the problem, causes, impact of risk, supporting evidence. These matters will be the basis for the auditor to prepare audit recommendations.
6. Arrange Recommendations
In providing recommendations, auditors must offer realistic improvements. Both regarding the improvement of procedures, strengthening controls, system updates, and staff training.
7. Make a summary and Conclusion
The final part of making a KKA is to make a summary and conclusion. The Auditor summarizes the audit results in a concise format. The written summary includes the area tested, the main findings, risks, recommendations, to assess the effectiveness of controls.
Examples of Audit working papers for enterprises
To get a deeper understanding related to the audit working paper example, see the following retail business KKA example.
- Audit object: purchase and inventory
- Purpose: ensure purchases are made according to procedures and accurate recorded stock.
- Procedure: matching PO samples with invoices and proof of receipt of goods, checking warehouse stock against inventory cards, and assessing the effectiveness of purchase verification controls.
- Audit evidenceabstract: PO document and invoice 2 out of 15 samples do not match, proof of receipt of goods 1 out of 15 has no inspection mark, and inventory card 3 out of 10 items have difference with physical stock.
- Testing: invoice with different price is caused by lack of price verification and the goods have difference with physical stock because the recording has not been done when the goods are out.
- Analysis: weak purchasing control at the price verification stage, manual inventory recording system is prone to differences, and the risk value of intermediate inventory misstatement.
- Recommendations: verify the price by the supervisor before the goods are paid, use barcodes to record the goods in and out, and do weekly Stock opname to reduce the difference.
For information, the example is a concise example of a company audit working paper. In practice, KKA has detailed and complex reports accompanied by long explanations, tables, to graphs.
Closing
That is an example of corporate audit working papers used by auditors in the audit process, the types of KKA, to the general structure. Audit working papers are very important for auditors, because they can document improvements to the company.
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