Question

What are the examples of " deficiencies in the audit documentation" ?

Answer 1

All audits require documentation, but it doesn’t mean firms are documenting audits sufficiently. Of course this leaves clients vulnerable and auditors at risk of disciplinary action.
As a result, firms need guidance about common audit deficiencies related to documentation. Lot of white papers outlines the common audit documentation deficiencies.
Few Common Audit Documentation Deficiencies
1. Failure to appropriately address fraud considerations. This includes lack of adequate documentation procedures applied regarding risks of material misstatement due to fraud.
2. Lack of documentation around risk assessment procedures. Failure to properly document planning procedures relating to risk assessment.
3. Failure to adequately document audit sampling methodology.
4. Failure to communicate or document required communications with those charged with governance.
4. Failure to document the overall audit strategy, the audit plan, or any significant changes made during the audit engagement.
Analytical procedures.
5. Lack of documentation of the basis for the auditor’s conclusions about the reasonableness of accounting estimates that give rise to significant risks. This includes
indicators of possible management bias.