8.

30 Background: Through preparing the auditors report, auditors must provide sufficient evidence to support their final opinion This evidence is documented in the form of paper, film, or digital media and is referred to audit working papers Permanent File - data expected to be useful on future engagements with the entity such as copies of long-term agreements, internal control structures and accounts that are important to the audit each year Current File - contains evidence gathered in performance of the audit such as the working trial balance, audit memoranda and proposed adjustments/reclassification to journal entries This falls under ASA 230 Audit documentation - The auditor must prepare, on a timely basis, audit documentation that provides: (i) a sufficient and appropriate basis for the auditors report; and (ii) evidence that the audit was performed in accordance with Auditing Standards and applicable legal and regulatory requirements ASA 230.8 - The function of these working papers should record the nature, timing and extent of the audit procedures performed; the results of the procedures and the audit evidence obtained; and significant matters arising during the audit and conclusions reached ASA 230.A2 - the form, content and extent of working papers are influenced by: Size and complexity of the entity Nature of the audit procedures to be performed The identifies risks of material misstatement The significance of the audit evidence identified The nature and extent of exceptions identified The audit methodology and tools used Assessment: 1. Two dispatched dockets did not result in the production of an invoice - accept as not material. No further evidence was surfaced such as data on current and previous period sales This analysis would validate whether or not the value of the missing dockets are in fact immaterial or if they comprise a large % of total sales for the period Fails to disprove the risk of material misstatement 2. Number of prices that did not match price list. Clerk said they were discounts negotiated with customers - accept explanation. No evidence was surfaced such as previous sales between said clients, documentation proving the relationship over a period of time or proof that Flinders Ltd has a history of negotiating discounts for repeat customers This lack of evidence fails to explain the nature and extent of exceptions 3. The quantity for orders delivered did not match the quantity on the invoice. Staff said they were due to excess stock required to replace damaged stock that had not been sent - accept. No evidence was gathered such as filed warranty documentation proving the existence and quantify of damaged goods

 This lack of evidence fails to explain the nature and extent of exceptions Conclusion: General theme is lack of sufficient evidence gathered by the auditor. Whilst the explanation provided by Flinders staff appear to be reasonable and fair at face value, the auditor has failed to gather and record sufficient evidence in her working papers to justify the acceptance of each of the 3 points above. According to AASB 230, Emily Bohn has not properly prepared working papers to demonstrate that the audit was performed in accordance with auditing standards. Furthermore, it would seem that the auditing firm has also breached ASA 220.14 as Emily Bohn does not appear to have the competence and capabilities to perform the audit engagement in accordance with Australian Auditing Standards.