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Contemporary Auditing 10th Edition by Michael Knapp
Edition 10ISBN: 978-1285066608Contemporary Auditing 10th Edition by Michael Knapp
Edition 10ISBN: 978-1285066608 Exercise 2
Should the results of inconclusive audit tests be included in audit workpapers Defend your answer.
Explanation
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State weather the results of inconclusive audit tests are included in audit papers:
Audit standards are somewhat obtuse with regards to work papers in this situation. According to the Standards of Field Work (Section 339):
"07 The auditor need not retain in audit documentation superseded drafts of working papers or financial statements, notes that reflect incomplete or preliminary thinking, previous copies of documents corrected for typographical or other errors, and duplicates of documents."
However, in this case, results were inconsistent, therefore according to the same document (Section 339).
".16 When the auditor has identified information that contradicts or is inconsistent with the auditor's final conclusions regarding a significant finding or issue, the auditor should documented how the auditor addressed the contradiction or inconsistency in forming the conclusion."
In conducting an audit, it seems reasonable that, "When in doubt, disclose it and keep the documentation." That is the disclosure is necessary and results are included in the audit working papers even though those are inconclusive.
Audit standards are somewhat obtuse with regards to work papers in this situation. According to the Standards of Field Work (Section 339):
"07 The auditor need not retain in audit documentation superseded drafts of working papers or financial statements, notes that reflect incomplete or preliminary thinking, previous copies of documents corrected for typographical or other errors, and duplicates of documents."
However, in this case, results were inconsistent, therefore according to the same document (Section 339).
".16 When the auditor has identified information that contradicts or is inconsistent with the auditor's final conclusions regarding a significant finding or issue, the auditor should documented how the auditor addressed the contradiction or inconsistency in forming the conclusion."
In conducting an audit, it seems reasonable that, "When in doubt, disclose it and keep the documentation." That is the disclosure is necessary and results are included in the audit working papers even though those are inconclusive.
Contemporary Auditing 10th Edition by Michael Knapp
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