Auditor's working paper

Practically each audit working paper should contain the following information:

1. Name of the client;
2. Period covered by the audit;
3. The subject matter;
4. File reference
5. The initials (signature) of the member of staff who prepared the working paper, and the date on which it was prepared;
6. In the case of audit papers prepared by client staff, the date the working papers were received, and the initials of the audit team member who carried out the audit work; and
7. The initials of the member of staff who reviewed the working papers and the date on which the review was carried out.

Auditors use a variety of steps to achieve objective. These steps tend to vary depending on the organisation, processes or activities being audited. As a result, there can be many types of working papers to suit the needs, but generally they can be classified into the following types:

Interview summaries

These are written notes of relevant information that the auditor gathers from interviewing the client's staff.

Worksheet

This is simply a table with a check mark in to indicate whether a transaction/ item has passed through a test. An example of a worksheet to test whether payments made were approved and correctly recorded in the proper account is given below. In the work sheet a tick () means the transaction has passed the test and (×) means it has failed the test.

Audit work sheet template

Payment No.	Payment Transaction	Payment Having Approval	Payment Recorded Correctly
1	Wages and Overtime Payments	✔	✔
2	Electricity and Water Bills	✔	✔
3	Supply of Office Equipment	✘	✔
4	Compensation on Land Damage	✔	✘

Re-performances

These are copies of financial statements that the auditor has used to re-calculate different items that made up the financial statements. Auditors usually show their work on the copy of the financial statements and then save that as a working paper. In the case of recurring audits, some working paper files may be classified as "permanent" audit files which are updated with new information of continuing importance, as distinct from current audit files which contain information relating primarily to the audit of a single period.

The advantages of having working papers to an auditor can be summarized as under:

1. Facilitates adequate planning: Working papers help the auditor in planning for subsequent year by assisting in deciding the nature, timing and extent of the audit procedures. They save time by avoiding repetition of work and act as training materials to the junior audit staff.
2. Facilitates supervision and review of the audit work: Working papers serve as a means by which audit team communicate their findings to their senior auditors. Seniors can therefore supervise and maintain control of the audit work already done and yet to be done.
3. Provide the basis of audit report: Auditors refer to the findings that were recorded in the working papers for preparing the audit report and expressing an opinion on the financial statements of the entity.
4. Provide defence against negligence charges: An auditor may be charged with negligence in a Court of Law for not detecting a material fraud or error in an entity. This may happen long time after the audit is completed and report submitted. The working papers can support the auditors to defend themselves by proving that they had taken reasonable care while carrying out their audit and drafting their report.
5. Allows discussion of audit findings with management: Working papers are an effective means by which the auditor can discuss major audit findings with management or audit committee of the client before issuing report