Question

You have recently been appointed as an audit assistant for MKZ Auditing LLC, a popular auditing firm based in Al Ain. Your line manager spoke to you two weeks ago to inform you that you have been assigned to another senior auditing staff to undertake a visit and audit a client called SMC Hotels LLC.

Your line manager has tasked you to liaise with the senior auditing staff to prepare a presentation to be delivered to the senior management on how you propose to investigate and plan the audit of SMC Hotels LLC.

Required
Why is it important to review and record the accounting systems of SMC Hotels LLC on appropriate working papers? ( In your Own Words)

Answer 1

It is important to review, record and maintain proper working papers because

1) Working papers act as an evidence that the audit was conducted effectively and all the statutory and regulatory requirements were complied by the auditor while performing the audit.

2) Also, it helps the auditors to maintain the records for future audits as the working papers includes the significant matters and important discussions with the top level management. Also, the working papers shows us the nature, timing and extent of audit procedures applied by the auditors.

3) Also, the working papers includes the information regarding the misstatement noticed while performing the audit and what substantive procedures were undertaken for that. Also, it includes the actions taken by the auditors and top level management to correct the misstatement.

4) Working papers helps to ensure accountability in the audit team as it specifies who performed which task and when, who reviewed the audit work and when.

5) Working papers are also necessary for audit quality control purposes.