Question Compiler

Auditing and Ethics

Chapter 6 - Audit Documentation

RTP May 2024

1. Rajni, a CA student, has understood that SA 230 requires auditor to prepare audit documentation on a
timely basis. While reading about SQC 1, she notices that time limit for completion of final audit file
is ordinarily not more than 60 days after the date of auditor’s report. She finds it to be puzzling.
Unable to comprehend, she seeks your guidance. Guide her.
Sol. SA 230 requires that the auditor shall prepare audit documentation on a timely basis. Preparing sufficient
and appropriate audit documentation on a timely basis helps to enhance the quality of the audit and facilitates
the effective review and evaluation of the audit evidence obtained and conclusions reached before the
auditor’s report is finalized.
SQC 1, however, requires auditor to complete assembly of final audit file in ordinarily not more than 60 days
after the date of the auditor’s report. The completion of the assembly of the final audit file after the date
of the auditor’s report is only an administrative process that does not involve the performance of new audit
procedures or the drawing of new conclusions.
Therefore, auditor shall prepare documentation on a timely basis. However, for completion of assembly of
final audit file which is an administrative process, time period of 60 days after the date of auditor’s report
has been required in SQC 1.

2. Discussing meaning of completion memorandum, elaborate upon its importance.

Sol. Completion memorandum is a summary that describes the significant matters identified during the audit and
how they were addressed.
Such a summary may facilitate effective and efficient review and inspection of the audit documentation,
particularly for large and complex audits. Further, the preparation of such a summary may assist auditor’s
consideration of the significant matters. It may also help the auditor to consider whether there is any
individual relevant SA objective that the auditor cannot achieve that would prevent the auditor from achieving
the overall objectives of the auditor.

RTP SEPT 2024

3. An important factor in determining the form, content and extent of audit documentation of significant
matters is the extent of professional judgment exercised in performing the work and evaluating the
results. Explain stating clearly the examples of significant matters.
Sol. As per SA 230, Audit documentation" judging the significance of a matter requires an objective analysis of
the facts and circumstances.
Examples of significant matters include:
• Matters that give rise to significant risks.
• Results of audit procedures indicating (a) that the financial statements could be materially misstated, or
(b) a need to revise the auditor's previous assessment of the risks of material misstatement and the
auditor's responses to those risks.
• Circumstances that cause the auditor significant difficulty in applying necessary audit procedures.
• Findings that could result in a modification to the audit opinion or the inclusion of an Emphasis of Matter
Paragraph in the auditor's report.
 An important factor in determining the form, content and extent of audit documentation of significant
matters is the extent of professional judgement exercised in performing the work and evaluating the results.
Documentation of the professional judgements made, where significant, explains the auditor's conclusions
and reinforces the quality of the judgement.
Such matters are of particular interest to those responsible for reviewing audit documentation, including
those carrying out subsequent audits, when reviewing matters of continuing significance (for example, when
performing a retrospective review of accounting estimates).

RTP JAN 2025

4. CA Ripun completed the audit of a listed company, and the audit report was issued on July 17th, 2024.
However, he had not properly organized the audit working papers, including records of discussions with
management, audit procedures performed, and conclusions reached. More than six months after issuing
the report, he received a letter from the regulator in connection with audit of the company requesting
him to share copy of audit file. In a hurry, CA Ripun quickly assembled the audit file, adding some
papers he thought were necessary, but he used the current date on these newly added documents. He
then sent the audit file to the regulator. Discuss the issues involved related to “audit documentation”
and assembling of the final audit file in this case.
Sol. The auditor shall assemble the audit documentation in an audit file and complete the administrative process
of assembling the final audit file on a timely basis after the date of the auditor’s report.
• SQC 1, “Quality Control for Firms that perform Audits and Review of Historical Financial Information,
and other Assurance and related services”, requires firms to establish policies and procedures for the
timely completion of the assembly of audit files.
• An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not
more than 60 days after the date of the auditor’s report. The completion of the assembly of the final
audit file after the date of the auditor’s report is an administrative process that does not involve the
performance of new audit procedures or the drawing of new conclusions.
• Changes may, however, be made to the audit documentation during the final assembly process, if they are
administrative in nature.
Further, preparing sufficient and appropriate audit documentation on a timely basis helps to enhance the
quality of the audit and facilitates the effective review and evaluation of the audit evidence obtained and
conclusions reached before the auditor’s report is finalized. Documentation prepared after the audit work
has been performed is likely to be less accurate than documentation prepared at the time such work is
performed.
In the given case, even after passage of more than six months, CA Ripun has not assembled an audit file.
Besides, he has put in some papers with the current date which is not permissible at all. It shows that part of
the audit documentation has been prepared afterwards putting a question mark on the quality of audit.

RTP MAY 2025

1. CA Piku has prepared audit documentation of an entity describing nature, timing and extent of audit
procedures performed during the course of audit. In documenting nature, time and extent of audit
procedures performed, which matters shall be recorded? He is also of the view that such documentation
alone as described above meets requirements of Standards on Auditing. Comment upon validity of his
views.
Sol. In documenting the nature, timing and extent of audit procedures performed, the auditor shall record:
(a) The identifying characteristics of the specific items or matters tested.
 (b) Who performed the audit work and the date such work was completed; and
(c) Who reviewed the audit work performed and the date and extent of such review.
The auditor shall prepare audit documentation that is sufficient to enable an experienced auditor, having no
previous connection with the audit, to understand:
(a) The nature, timing and extent of the audit procedures performed.
(b) The results of the audit procedures performed, and the audit evidence obtained; and
(c) Significant matters arising during the audit and the conclusions reached thereon and significant
professional judgements made in reaching those conclusions.
Thus, all above matters shall be recorded to meet requirements of SA 230. Documenting nature, time and
extent of audit procedures performed alone does not meet the requirements of SA 230. Therefore, CA Piku’s
views are not valid.

RTP SEPT 2025

1. CA Shilpi, the engagement partner at MN Associates, is assigned the audit of following two companies:
• Zed Ltd., a small family-run business with straightforward operations, minimal internal controls, and
low transaction volume.
• Ted Ltd., a large multinational corporation with complex operations, multiple subsidiaries, high
transaction volumes.
During the audit planning stage, CA Shilpi highlights that the form, content, and extent of audit
documentation must be customized for each client based on specific factors. Discuss those factors on
which form, content, and extent of audit documentation depends.
Sol. The form, content and extent of audit documentation depend on factors such as:
(i) The size and complexity of the entity.
(ii) The nature of the audit procedures to be performed.
(iii) The identified risks of material misstatement.
(iv) The significance of the audit evidence obtained.
(v) The nature and extent of exceptions identified.
(vi) The need to document a conclusion or the basis for a conclusion not readily determinable from the
documentation of the work performed or audit evidence obtained.
(vii) The audit methodology and tools used.

RTP JAN 2026

1. FSY and Co., Chartered Accountants, completed the statutory audit of HIMMAT Ltd. for the year
ended 31st March 2025. The audit partner instructed the audit team to finalize and assemble the audit
documentation immediately after signing the auditor’s report on 15th September 2025. However, audit
team took this instruction lightly and forgot to assemble the audit documentation. After six months,
audit team started assembling the file and completed its documentation. When audit partner became
aware of this, he called a meeting of staff and discussed policies and procedures for timely completion
of audit files, changes to audit documentation and period of retention of engagement documentation.
Explain various points discussed by audit partner with reference to relevant standard on auditing.
Sol. As per SA 230, "Audit Documentation", the auditor shall assemble the audit documentation in an audit file
and complete the administrative process of assembling the final audit file on a timely basis after the date
of the auditor's report.
SQC 1, "Quality Control for Firms that perform Audits and Review of Historical Financial Information, and
other Assurance and related services", requires firms to establish policies and procedures for the timely
completion of the assembly of audit files.
 An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not more
than 60 days after the date of the auditor's report. The completion of the assembly of the final audit file
after the date of the auditor's report is an administrative process that does not involve the performance of
new audit procedures or the drawing of new conclusions.
Changes may, however, be made to the audit documentation during the final assembly process, if they are
administrative in nature.
Examples of such changes include:
• Deleting or discarding superseded documentation.
• Sorting, collating and cross-referencing working papers.
• Signing off on completion checklists relating to the file assembly process.
• Documenting audit evidence that the auditor has obtained, discussed and agreed with the relevant
members of the engagement team before the date of the auditor’s report.
After the assembly of the final audit file has been completed, the auditor shall not delete or discard audit
documentation of any nature before the end of its retention period.
SQC 1 requires firms to establish policies and procedures for the retention of engagement documentation.
The retention period for audit engagements ordinarily is no shorter than seven years from the date of the
auditor’s report, or, if later, the date of the group auditor’s report.

RTP MAY 2026

1. ABC & Co., Chartered Accountants is conducting the statutory audit of a listed company having multiple
locations and a large engagement team. The audit involves extensive planning, supervision, review of
work performed by assistants and is also subject to quality control review by the firm as well as possible
inspection by regulatory authorities.
During the audit, the engagement partner emphasises the need for proper and comprehensive audit
documentation.
With reference to above, explain the purpose served by audit documentation for the auditor and the
engagement team.
Sol. The following are the purpose of Audit documentation:
1. Assisting the engagement team to plan and perform the audit.
2. Assisting members of the engagement team to direct and supervise the audit work, and to discharge
their review responsibilities.
3. Enabling the engagement team to be accountable for its work.
4. Retaining a record of matters of continuing significance to future audits.
5. Enabling the conduct of quality control reviews and inspections in accordance with SQC 1.
6. Enabling the conduct of external inspections in accordance with applicable legal, regulatory or other
requirements.
Thus, in the given case, audit documentation supports effective audit planning, supervision, accountability, and
compliance with quality control and regulatory inspection requirements.

MTP (1) MAY 2024

1. What is meant by audit documentation? What are objectives of an independent auditor in accordance
with SA 230?
Sol. Audit documentation refers to the record of audit procedures performed, relevant audit evidence obtained,
and conclusions the auditor reached.
The objective of the auditor in accordance with SA 230 is to prepare documentation that provides: -
(i) A sufficient and appropriate record of the basis for the auditor’s report and
(ii) Evidence that the audit was planned and performed in accordance with SAs and applicable legal and
regulatory requirements.
 MTP (2) MAY 2024
1. One of the factors affecting the form, content and extent of audit documentation relates to size and
complexity of the entity. State six other factors in this respect.
Sol. One of the factors affecting the form, content and extent of audit documentation relates to size and
complexity of audit. Other factors are:
1. The identified risks of material misstatement.
2. The significance of the audit evidence obtained.
3. The nature and extent of exceptions identified.
4. The need to document a conclusion or the basis for a conclusion not readily determinable from the
documentation of the work performed or audit evidence obtained.
5. The audit methodology and tools used.

MTP (2) SPET 2024

1. CA N, statutory auditor of Rock Limited, is in the process of final assembly of audit file. Under what
circumstances, a statutory auditor can make changes to audit documentation during final assembly
process of audit file? Give a few examples of such changes.
Sol. Changes may be made to the audit documentation during the final assembly process, if they are
administrative in nature.
Examples of such changes include: -
• Deleting or discarding superseded documentation.
• Sorting, collating and cross-referencing working papers.
• Signing off on completion checklists relating to the file assembly process.
• Documenting audit evidence that the auditor has obtained, discussed and agreed with the relevant
members of the engagement team before the date of the auditor’s report.

MTP (1) JAN 2025

1. M/s KSJS and Associates are the statutory auditors of Moon Ltd. for the financial year 2023-24.
During an audit briefing, CA Sanket, the engagement partner, explained that the auditor must assemble
the audit documentation in an audit file and complete the administrative process of finalising the audit
file on a timely basis after the date of the auditor’s report. He also highlighted the requirements of
SQC 1 regarding establishment of policies and procedures for the retention of engagement documentation
in a firm. Explain the requirements related to the timely assembly and retention of audit files in
accordance with relevant Engagement and Quality Control Standards.
Sol. The auditor shall assemble the audit documentation in an audit file and complete the administrative process
of assembling the final audit file on a timely basis after the date of the auditor’s report.
• SQC 1 “Quality Control for Firms that perform Audits and Review of Historical Financial Information,
and other Assurance and related services”, requires firms to establish policies and procedures for the
timely completion of the assembly of audit files.
• An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not
more than 60 days after the date of the auditor’s report. The completion of the assembly of the final
audit file after the date of the auditor’s report is an administrative process that does not involve the
performance of new audit procedures or the drawing of new conclusions.
• Changes may, however, be made to the audit documentation during the final assembly process, if they are
administrative in nature. Examples of such changes include:
➢ Deleting or discarding superseded documentation.
 ➢ Sorting, collating and cross-referencing working papers.
➢ Signing off on completion checklists relating to the file assembly process.
➢ Documenting audit evidence that the auditor has obtained, discussed and agreed with the relevant
members of the engagement team before the date of the auditor’s report.
• After the assembly of the final audit file has been completed, the auditor shall not delete or discard
audit documentation of any nature before the end of its retention period.
• SQC 1 requires firms to establish policies and procedures for the retention of engagement
documentation. The retention period for audit engagements ordinarily is no shorter than seven years
from the date of the auditor’s report, or, if later, the date of the group auditor’s report.

MTP (2) JAN 2025

1. CA Tanuj, the auditor of Kiran Ltd., completed the audit work and issued the auditor's report on 18th
August 2024 for the financial year ended on 31st March 2024. During the final assembly of the audit
file, he discarded some supporting schedules as same were outdated and corrected crossreferencing
errors of working papers. No new audit conclusions were drawn, and the final audit file was assembled
on 10th October 2024.
On the basis of Standards on Auditing regarding audit documentation, comment on the action taken by
CA Tanuj.
Sol. As per SA 230, “Audit Documentation”, the auditor shall assemble the audit documentation in an audit file and
complete the administrative process of assembling the final audit file on a timely basis after the date of the
auditor’s report.
• An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not
more than 60 days after the date of the auditor’s report. The completion of the assembly of the final
audit file after the date of the auditor’s report is an administrative process that does not involve the
performance of new audit procedures or the drawing of new conclusions.
• Changes may, however, be made to the audit documentation during the final assembly process, if they are
administrative in nature.
• After the assembly of the final audit file has been completed, the auditor shall not delete or discard audit
documentation of any nature before the end of its retention period.
In the given situation, the auditor CA Tanuj has issued the auditor's report on 18th August 2024 for the
financial year ended on 31st March 2024. However, he discarded some supporting schedules and corrected
cross-referencing errors of working papers during the final assembly of the audit file by 10th October
2024 which is under prescribed time-limit of 60 days from the issuance of auditors report. Further, no
new audit conclusions were drawn. Thus, CA Tanuj can make said changes to the audit documentation during
the final assembly process.

MTP (1) MAY 2025

1. During an audit of MNT Ltd., CA Shubh, the auditor discovers an issue with stock valuation. To ensure
the accuracy and reliability of his observations, CA Shubh needs to document the audit procedures,
evidence collected, and his observations thoroughly.
In this situation, how does audit documentation help CA Shubh support his findings in audit in accordance
with Standards on Auditing?
Sol. During the audit of MNT Ltd., CA Shubh identifies an issue with stock valuation. To ensure the accuracy and
reliability of his observations, it is crucial for him to document the audit procedures performed, the
evidence obtained, and his findings in a structured manner.
 Audit documentation plays a vital role in supporting CA Shubh’s findings in accordance with the Standards on
Auditing. Its key purposes include:
1. Assisting the engagement team to plan and perform the audit.
2. Assisting members of the engagement team to direct and supervise the audit work, and to discharge
their review responsibilities.
3. Enabling the engagement team to be accountable for its work.
4. Retaining a record of matters of continuing significance to future audits.
5. Enabling the conduct of quality control reviews and inspections in accordance with SQC 1.
6. Enabling the conduct of external inspections in accordance with applicable legal, regulatory or other
requirements.
MTP (1) JAN 2026
1. Explain the factors that determine the form, content, and extent of audit documentation as per the
Standards on Auditing.
(4 Marks)
Sol. As per SA 230 – ‘Audit Documentation’, the form, content and extent of audit documentation depend on
factors such as:
1. The size and complexity of the entity.
2. The nature of the audit procedures to be performed.
3. The identified risks of material misstatement.
4. The significance of the audit evidence obtained.
5. The nature and extent of exceptions identified.
6. The need to document a conclusion or the basis for a conclusion not readily determinable from the
documentation of the work performed or audit evidence obtained.
7. The audit methodology and tools used.

MTP MAY 2026

1. Bee Ltd. is a listed manufacturing company. The statutory auditor, CA P, conducted the audit of the
financial statements for the year ended 31st March 2025. During the course of audit, CA P and his
audit team performed various audit procedures relating to revenue recognition, inventory valuation and
verification of fixed assets. However, while reviewing the audit files, it was observed that the working
papers prepared by the audit team were incomplete and lacked clear documentation explaining the basis
for certain conclusions reached by the auditor.
A junior member of the audit team questioned CA P regarding the purpose and objective of maintaining
proper audit documentation and how such documentation supports the auditor’s report and compliance
with auditing standards.
In context of the above, explain the objective of the auditor in preparing audit documentation and
describe the nature of audit documentation as per the relevant Standards on Auditing. (4 Marks)
Sol. Objective of the Auditor: The objective of the auditor is to prepare documentation that provides:
(a) A sufficient and appropriate record of the basis for the auditor's report; and
(b) Evidence that the audit was planned and performed in accordance with SAs and applicable legal and
regulatory requirements.
Nature of Audit Documentation
Audit documentation provides:
(a) Evidence of the auditor's basis for a conclusion about the achievement of the overall objectives of the
auditor; and
 (b) Evidence that the audit was planned and performed in accordance with SAs and applicable legal and
regulatory requirements.
Therefore, in the given case, CA P is required to ensure that the audit working papers properly document the
procedures performed, evidence obtained and conclusions reached. Proper audit documentation enables the
auditor to support the auditor’s report and demonstrate that the audit was conducted in accordance with the
Standards on Auditing and applicable legal and regulatory requirements.

MTP MAY 2026

1. CA B, an auditor, after the completion of busy audit season, was occupied in assembling of final audit
files of one of his client. First of all, he started preparing various documents of that client and then
kept those documents in various folders. He was preparing documents as well as audit file in paper form
because he believed that it is mandatory. He could complete documentation as well as assembling of
final audit file of that client after three months from the date of audit report. Generally, he retains
audit file of the clients for 4 years from the date of audit report. Check the validity of the action of
CA B. (4 Marks)
Sol. Assembly of the Final Audit File: Audit documentation may be recorded on paper or on electronic or other
media. Audit file may be defined as one or more folders or other storage media, in physical or electronic form,
containing the records that comprise the audit documentation for a specific engagement. Hence the views of
CA B that audit documentation should be maintained mandatorily in paper form is not correct.
The auditor shall prepare audit documentation on timely basis. Preparing sufficient and appropriate audit
documentation on a timely basis helps to enhance the quality of the audit and facilitates the effective review
and evaluation of the audit evidence obtained and conclusions reached before the auditor’s report is finalized.
Documentation prepared after the audit work has been performed is likely to be less accurate than
documentation prepared at the time such work is performed. Completing the audit Documentation by CA B
not on timely basis is not proper.
An appropriate time limit within which to complete the assembly of the final audit f ile is ordinarily not more
than 60 days after the date of the auditor’s report. In the given situation, CA. B, after completion of audit
season, is completing the audit file as well as assembling of final audit files of his client after three months
of the date of audit report which is not valid as per SQC 1.
SQC 1 “Quality Control for Firms that perform Audits and Reviews of Historical Financial Information, and
other Assurance and Related Services Engagements”, requires firms to establish policies and procedures for
the retention of engagement documentation. The retention period for audit engagements ordinarily is no
shorter than seven years from the date of the auditor’s report, or, if later, the date of the group auditor’s
report. He retains audit file of the client for 4 years from the date of audit report is also non-compliance
of SQC 1.

PYQ MAY 2024

1. CA B, an auditor, after the completion of busy audit season, was occupied in assembling of final audit
files of one of his client. First of all, he started preparing various documents of that client and then
kept those documents in various folders. He was preparing documents as well as audit file in paper form
because he believed that it is mandatory. He could complete documentation as well as assembling of
final audit file of that client after three months from the date of audit report. Generally, he retains
audit file of the clients for 4 years from the date of audit report. Check the validity of the action of
CA B.
Sol. Assembly of the Final Audit File:
 Audit documentation may be recorded on paper or on electronic or other media. Audit file may be defined as
one or more folders or other storage media, in physical or electronic form, containing the records that
comprise the audit documentation for a specific engagement. Hence the views of CA B that audit
documentation should be maintained mandatorily in paper form is not correct.
The auditor shall prepare audit documentation on timely basis. Preparing sufficient and appropriate audit
documentation on a timely basis helps to enhance the quality of the audit and facilitates the effective review
and evaluation of the audit evidence obtained and conclusions reached before the auditor’s report is finalized.
Documentation prepared after the audit work has been performed is likely to be less accurate than
documentation prepared at the time such work is performed. Completing the audit Documentation by CA B not
on timely basis is not proper.
An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not more
than 60 days after the date of the auditor’s report. In the given situation, CA. B, after completion of audit
season, is completing the audit file as well as assembling of final audit files of his client after three months
of the date of audit report which is not valid as per SQC 1.
SQC 1 “Quality Control for Firms that perform Audits and Review of Historical Financial Information, and
other Assurance and Related Services”, requires firms to establish policies and procedures for the retention
of engagement documentation. The retention period for audit engagements ordinarily is no shorter than seven
years from the date of the auditor’s report, or, if later, the date of the group auditor’s report. He retains
audit file of the client for 4 years from the date of audit report is also non-compliance of SQC 1.

PYQ SEPT 2024

1. M/s. PK & Company, Chartered Accountants, are the statutory auditors of JC Limited. CA Tarun,
partner of M/s. PK & Company, was entrusted to supervise and verify the inventory items as on
31.03.2024. During the process of verification, a large chunk of draft inventory sheets were
accumulated and then a final inventory sheet was prepared. The audit assistant has kept all these drafts
and the final inventory sheet in the audit file. Is the approach of the audit assistant correct? Which
papers/ documents may not be included in the audit documentation?
Sol. In the given case, the audit assistant has kept a large chunk of draft inventory sheets and the final
inventory sheet in the audit file which is not correct as the auditor is not required to document draft
inventory sheets. Auditor should ensure that only final inventory sheets will form part of the audit
documentation. Thus, approach of the audit assistant of filing draft and final inventory sheet is not correct.
As per SA 230, “Audit documentation”, audit documentation may be recorded on paper or on electronic or
other media.
The auditor need not include in audit documentation:
• superseded drafts of working papers and financial statements,
• notes that reflect incomplete or preliminary thinking,
• previous copies of documents corrected for typographical or other errors, and
• duplicates of documents.

PYQ MAY 2025

1. M/s BPA and Associates, Chartered Accountants, was appointed as the auditors of Nissan Ltd., a
company with PAN-India presence, for the financial year 2023-24. The audit report was issued on
August 20, 2024. Following the issuance of audit report, CA P instructed junior team member Mr. Y to
assemble the final audit file and prepare the Completion Memorandum.
(i) Explain the meaning and significance of a Completion Memorandum.
(ii) Team Member Y completed the assembly of the final audit file in March 2025 and handed it over
to CA P. Was team member Y correct in his approach ?
Sol.
i) The auditor may consider it helpful to prepare and retain as part of the audit documentation a summary
(sometimes known as a completion memorandum) that describes-
• the significant matters identified during the audit and
• how they were addressed.
Such a summary may facilitate effective and efficient review and inspection of the audit documentation,
particularly for large and complex audits. Further, the preparation of such a summary may assist auditor’s
consideration of the significant matters. It may also help the auditor to consider whether there is any
individual relevant SA objective that the auditor cannot achieve that would prevent the auditor from
achieving the overall objectives of the auditor.
ii) The auditor shall assemble the audit documentation in an audit file and complete the administrative
process of assembling the final audit file on a timely basis after the date of the auditor’s report.
An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not
more than 60 days after the date of the auditor’s report. The completion of the assembly of the final
audit file after the date of the auditor’s report is an administrative process that does not involve the
performance of new audit procedures or the drawing of new conclusions.
Hence, Y was not correct in his approach.

PYQ SEPT 2025

1. Takur and Co; Chartered Accountants were conducting an audit of an LLP. They have verified the
Receivables and concluded that all the Receivables are genuine and recoverable. However, before the
final completion of the audit, the auditors came to know of severe financial crisis of one of the
Receivables, M/s. Raj Enterprises, whose outstanding account balance was material to the overall
Receivables figure as on the date of financial statements. CA Takur had discussions with the appropriate
level of management to address the issue, and the management finally agreed to make provision for the
same, as suggested by the auditor.
You are required to -
(i) Ensure how the auditor can fulfil the "Documentation" part of this matter. (3 Marks)
(ii) Mention any four different examples of "Audit Documentation". (2 Marks)
Sol. (i) The auditor shall document discussions of significant matters with management, those charged with
governance, and others, including the nature of the significant matters discussed and when and with
whom the discussions took place.
If the auditor identified information that is inconsistent with the auditor’s final conclusion regarding a
significant matter, the auditor shall document how the auditor addressed the inconsistency.
Considering the above, the auditor shall document the minutes of the discussions with the management,
regarding the financial crisis of M/s Raj enterprises, the matters discussed, the persons representing
the management and the auditor, the amount recommended for provision by the auditor and the amount
of provision finally accepted and provided by the management and any other relevant data in support of
the same.
(ii) Examples of Audit Documentation:
• Audit programmes.
• Analyses.
• Issues memoranda.
• Summaries of significant matters.
• Letters of confirmation and representation.
• Checklists.
• Correspondence (including e-mail) concerning significant matters.
 PYQ JAN 2026
1. Mr. Uttam, an articled clerk at RQP & Associates, is auditing AB Pharma Ltd. and has collected various
papers and documents during the course of the audit. However, he is unsure about which of these papers
and documents should be maintained as part of audit documentation and which should not be included.
Later, AB Pharma Ltd. has also requested certain audit documentation from RQP & Associates. Advise
him –
Which items need not to be included in the audit documentation? (3 Marks)
Whether RQP & Associates is obliged to provide their audit documentation to the client? (2 Marks)

Sol. Items which need not be included in audit documentation: As per SA 230, “Audit Documentation”, the
auditor need not include in audit documentation -
1. superseded drafts of working papers and financial statements
2. Notes that reflect incomplete or preliminary thinking.
3. Previous copies of documents corrected for typographical or other errors
4. Duplicates of documents.
Whether RQP & Associates is obliged to provide audit documentation to the client: As per Standard on Quality
Control (SQC) 1, unless otherwise specified by law or regulation, audit documentation is the property of the
auditor. The auditor is not obliged to provide audit documentation to the client. However, he may, at his
discretion, make portions of, or extracts from, audit documentation available to clients, provided such
disclosure does not undermine the validity of the work performed or, in the case of assurance engagements,
the independence of the auditor or of his personnel.
Thus, RQP & Associates is not obliged to provide audit documentation to AB Pharma Ltd., since such
documentation is the property of the auditor; however, at its discretion, limited extracts may be shared
provided such disclosure does not impair audit validity or auditor independence.

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