PROJECT

Audit Working Papers

Group Detail
Ilyas Ahmad Farooqi
Umar Akram Javaria Naveed L1f10mcom0155 L1f10mcom0142 L1f10mcom0154

We as a group had work on that project and learn all the contents of working papers, and we are sure that in future we are able to work on audit working paper professionally.

Definition of Working Papers

Working papers are records kept by auditor regarding the procedures applied, the tests performed, the information obtained, and the pertinent conclusion reached in audit. The role of working papers: 1. As the principal support for the auditors opinion. 2. As a means for coordinating and supervising the audit. 3. As evidence that the audit was conducted in accordance with GAAS.
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Auditor Documentation
Normally include: 1. The overall responses to the risks of misstatement. 2. The nature, timing, and extent of audit. 3. The linkage of procedures with the assessed risk at the assertion level. 4. The result of the audit procedures. 5. The nature and effect of aggregated misstatement. 6. The auditor conclusion about the fairness of the financial statements. 7. The qualitative factors in evaluating material misstatement.
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Documents in Working Papers

1. Documentation of corroborating information and audit memoranda.
o The corroborating information includes: Extracts of minutes of board of director meeting Confirmation responses. Written representations from management and outside experts Copies of important contracts.
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Documents in Working Papers

o Audit memoranda refer to written data prepared by the auditor in narrative form. Memoranda may include comments on the performance of auditing procedures and conclusion reached.

2. Schedules and analyses, either prepared by management/client or prepared by auditor.

o Lead schedule (the schedule which is used to summarized several schedules) o Supporting schedule (the schedules which support the lead schedule).
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Documents in Working Papers

3. Adjusting and reclassifying entries. Adjusting entries are corrections of client errors or omission or misapplications of GAAP. Reclassifying entries pertain to the proper financial statement presentation of correct account balances. 4. Working trial balance. Working trial balance is a media used to summarizing and coordinating all of working papers and linked them to the financial statement prepared by client.
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Working Papers Description

Heading. working paper contain the name of the client, a descriptive title identifying the content of the working paper, and the balance sheet date or the period covered by the audit. Index number. Working paper is given an index or reference number, such as A-1, B-1 and so forth, for identification and filing purposes.
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Working Papers Description

Cross-referencing. Data on working paper that is taken from another working paper or that is carried forward to another working paper should be cross-referenced with the index number of those working papers.
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Working Papers Description Tick marks. Tick marks are symbols, such as check marks, that are used on working papers to indicate the procedures have been applied or that additional information about the item is available elsewhere on the working paper.
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Working Papers Description Signatures and dates. Upon completing their respective tasks, both the preparer and reviewer of a working paper should initial and date it. This establishes responsibility for the work performed and the review.
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Working Papers File

Working papers are filed under two categories: 1. Permanent file, it contains working papers that are expected to be useful to the auditor on many future engagements with the client. 2. Current file, it contains corroborating information pertaining to the execution of the current years audit program.
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Working Papers File

Documents included in permanent file are:
Copies of the articles of incorporation and bylaws. Chart of accounts and procedure manuals. Organization charts. Plant layout, manufacturing processes, and principal products. Terms of capital stock and bond issues. Copies of long-term contracts, such as leases, pension plans, and profit-sharing and bonus agreements. Schedules for amortization of long-term debt and depreciation of plant assets. Summary of accounting principles used by the client.
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Ownership of Working Papers

Working paper belong to the auditor. CPA shall not disclose any confidential information obtained during the course of a professional engagement, without the consent of the client, except for certain circumstances as stated in the rule. But in our case we use these working papers for learning purpose not with any wrong intention.
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PARTIAL WORKING TRIAL BALANCE

Shafi (Pvt) Ltd. Working Trial Balance Balance Sheet December 31, 20X1
WP Acct. REF No. Description Final Balance 12/31/X0 392,000 52,200 1,601,400 2,542,500 24,900 4,613,000

W/P Ref.: AA-1

Prepared by : Budi Reviewed by: Irwan

Ledger Adjustment Balance AJE Debit 12/31/X1 REF (Credit) 427,000 62,200 1,715,000 2,810,200 19,500 5,033,900 190,000 3,310,900 8,534,800 (1) (1) (2) 50,000

Date: 2/15/X2 Date: 2/20/X2

Final Balance

Adjusted Reclasification Balance RJE Debit 12/31/X1 REF (Credit)

A B C D E F G

101 102 103 104 105 201

M N O P R S T

401 402 403 404 501 601 602

Current Assets Cash Marketable Securities Receivable (Net) Inventories Prepared Expenses Total Current Long-term Investments Property, Plant & Equipment (Net) Total Liabilities & Stockholders' Equity Current Liabilities Notes Payable Accounts Payable Accrued Payables Income Taxes Payable Total Current Bonds Payable Common Stock Retained Earnings Total

477,000 62,200 (50,000) 1,665,000 (A) 133,000 2,943,200 19,500 133,000 5,166,900 190,000 3,310,900 8,667,800

10,000

10,000

477,000 62,200 1,675,000 2,943,200 19,500 5,176,900 190,000 3,310,900 8,677,800

3,146,500 7,759,500

133,000

10,000

750,000 2,150,400 210,600 150,000 3,261,000 1,000,000 2,400,000 1,098,500 7,759,500

825,000 2,340,300 189,000 170,000 3,524,300 1,200,000 2,400,000 1,410,500 8,534,800

825,000 (2) (133,000) 2,473,300 (A) 189,000 170,000 (133,000) 3,657,300 1,200,000 2,400,000 1,410,500 (133,000) 8,667,800

825,000 (10,000) 2,483,300 189,000 170,000 (10,000) 3,667,300 1,200,000 2,400,000 1,410,500 (10,000) 8,677,800 15

Thank You

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