STANDARD ON INTERNAL AUDIT (SIA) 330
INTERNAL AUDIT DOCUMENTATION
Contents
Paragraph(s)
Introduction ............................................................................................. 1
Objectives ......................... .................................................................... 2
Requirements .......................................................................................... 3
Explanatory Comments ............................................................................ 4
Effective Date ......................................................................................... 5
This Standard on Internal Audit (SIA) 320, "Internal Audit Evidence,"
issued by the Council of the Institute of Chartered Accountants of India
should be read in conjunction with the "Preface to the Standards on
Internal Audit," "Framework Governing Internal Audits" and "Basic
Principles of Internal Audit" issued by the Institute.
Note: This Standard on Internal Audit (SIA) supersedes Standard on Internal Audit (SIA) 3,
Documentation , issued in August, 2007.
1. Introduction
1.1 "Internal Audit Documentation " refers to the written record (electronic
or otherwise) of the internal audit procedures performed, the relevant
audit evidence obtained and conclusions reached by the Internal
Auditor on the basis of such procedures and evidence (Terms such as
"work papers " or "working papers " are also used to refer
documentation).
1.2 The Internal Auditor is expected to record and collate all the evidence
obtained in the form of complete and sufficient audit documentation.
This Standard explains certain key requirements in the process of
collection, preparation, retention and subsequent review of internal
audit documentation.
1.3 Scope: This Standard applies to all internal audit assignments. The
nature and content of documentation is covered in a separate
implementation guide on the subject.
2. Objectives
2.1 The objectives of preparing complete and sufficient audit
documentation is to:
(a) validate the audit findings and support the basis on which audit
observations are made and conclusions reached from those
findings;
(b) aid in the supervision and review of the internal audit work; and
(c) establish that work performed is in conformance with the
applicable pronouncements of the Institute of Chartered
Accountants of India.
2.2 The overall objective of preparing audit documentation is to allow the
internal auditor to form an opinion on the outcome of the assignment.
The internal audit documentation must stand on its own and not
require any follow-up clarifications or additional information to arrive at
the same conclusions.
Standard on Internal Audit (SIA) 330
3. Requirements
3.1 The internal auditor shall record the nature, timing and extent of
completion of all internal audit activities and testing procedures in the
form of reproducible documents. (refer Para. 4.1).
3.2 Documentation shall be complete and sufficient to support the
analysis conducted on the audit evidence, the identification of
findings, the formulation of audit observations and the drafting of the
internal audit reports based on the findings. Documentation shall
clearly state the purpose of the procedure, the source of evidence, the
outcome of the audit work and also identify the performer and
reviewer. (refer Para. 4.2).
3.3 The internal audit function shall maintain a written process explaining
the manner in which documentation will be prepared, reviewed, stored
and finally discarded, to ensure quality and conformance to Standards
on Internal Audit. (refer Para. 4.3).
3.4 The internal audit work paper files shall be completed prior to the
issuance of the final internal audit report. Any pending administrative
matters shall also be completed within sixty days of the release of the
final report. (refer Para. 4.4).
3.5 The ownership and custody of the internal audit work papers shall
remain with the Internal Auditor. Where part of the audit work is
outsourced to an external audit service provider or an expert, and
reliance is placed on the work papers to issue the internal audit report,
the ownership of the work papers shall be assumed by the Internal
Auditor from the third party. However, where reliance is placed only on
the report of the third party who insists on retaining ownership to their
work papers, adequate provisions shall be in place to have access to
the work papers, if and when required (e.g., for quality review
purposes).
4. Explanatory Comments
4.1 Nature of Documentation (refer Para. 3.1): Documentation includes
written records (electronic or otherwise) of various audit activities and
procedures conducted, including evidence gathered, information
collected, notes taken and meetings held. It includes, for example,
internal memoranda, letters of confirmation and representation,
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Internal Audit Documentation
checklists, external reports and correspondence (including e-mail)
concerning sig nificant matters. Abstracts or copies of the entity's
records, significant and specific contracts and agreements, may be
included as part of internal audit documentation, if and when
appropriate.
These documents need not necessarily be printed on paper and soft/
electronic/ digital version may be used and filed. However, where
alternate method of recording and storage is used, it must be
reproducible in print form if required, similar in nature to the original
documents.
4.2 Content and sufficiency of Documentation (refer Para. 3.2): The
content and extent of documentation is a matter of professional
judgment since it is neither practical nor necessary to document every
matter or observation. However, all significant matters which require
exercise of judgment, together with the Internal Auditor's conclusion
thereon, shall be included in the internal audit documentation.
Professional judgement is applied well if documentation helps achieve
the objectives listed under Section 2, above.
Nevertheless, documents shall be:
(a) sufficient and complete to avoid the need for follow-up inquiry;
(b) useful and relevant to the objectives of the audit procedure;
(c) undergo at least one level of review or approval; and
(d) dependable and reliable to allow a peer reviewer to reach the
same conclusion.
4.3 Documentation Process (refer Para. 3.3): Internal audit
documentation shall be collated and arranged logically in files as audit
work papers and retained to support the performance of the internal
audits as per a written process. It shall include various quality checks,
e.g., check of completeness (list of contents of all work papers), check
of relevance (cross reference to findings and reports), check of
conformance to Standards of Internal Audit (reference to relevant
SIAs).
All audit work papers shall be retained in accordance with the legal
and company's retention policy and only shared with those who are
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Standard on Internal Audit (SIA) 330
authorised to access them. Advice of legal counsel and/or approval of
senior management or engaging authority (for outsourced
engagements) shall be obtained (if required) prior to releasing any
audit documentation to external parties.
4.4 Timely Completion of Documentation (refer Para. 3.4): Audit
working papers shall be compiled into internal audit files soon after the
completion of all audit procedures, while pending matters may be
closed during the draft stage of audit reporting. However, the final
internal audit report shall not be released unless all significant audit
evidence have been collected and documented.
The administrative process of arranging the final audit files shall be
completed within sixty days of the release of the final report.
4.5 Confirmation of Compliance: To confirm compliance of audit
procedures with this SIA, a list of the documents required is required,
as follows:
(a) Written documentation policy and process on audit work
papers, as part of the Internal Audit Manual;
(b) Work paper files for each audit assignment, reviewed and
approved with cross reference to the Internal Audit Program,
where appropriate.
5. Effective Date
5.1 This Standard is applicable for internal audits beginning on or after a
date to be notified by the Council of the Institute.
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