Advantages of Audit Working Papers
The important advantages of the working papers may be stated as below:
Support for auditor's opinion:
SAP-3 states, "Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries and confirmation to afford a reasonable basis for an opinion regarding the financial statements under examination." From this statement, it can be easily concluded that audit working papers provide the auditor sufficient background for giving his opinion about the financial state of affairs of the enterprise.
Helpful in the preparation and certification of audit report:
Working papers serve as the notes for the auditor for preparing his audit report of the enterprise. Schedules analysis etc., prepared by the auditor in the course of his audit work, serve as the basis and also certificate for this audit report.
Help in the performance of the audit work:
Working papers help the auditor in coordinating the work of the audit staff as well as directing them in the conduct of the audit. These papers help in the evaluation of the progress of the audit work also.
Work can be easily divided among the audit staff:
These papers help in the division and distribution of work among the audit staff. These working papers divide the work in the senior and junior staff and the senior staff may easily monitor the work of the junior staff. These papers are very much useful where the audit work is being conducted at various branches, or at various offices of the enterprise.
Can be used as a permanent record:
Working papers serve as a permanent record as the audit procedures adopted and examination of various books of accounts done are recorded in writing. This written record becomes a permanent record and can be used for many purposes by the auditor in the present as well as in future also.
Create a bridge between original transactions and financial statements:
Working papers can be prepared by the auditor himself or by his staff also. The analysis of transactions provide an important link between the original transactions and the financial statements. The reason of this is that the work done by the auditor or his staff is in the nature of tracing the origin of the business transactions of the enterprise. This is based upon the books of the original entries. Further, rectification and adjustment entries are also based upon these papers, as the errors located are to be rectified through the journal entries.
Act as a basis for review and revision of internal control system:
Questionnaires relating to Internal Control System adopted by the enterprise are part and parcel of working papers. Where the auditor finds weaknesses in the internal control system of the enterprise, he suggests his client for a review and revision of it. Thus, these papers help in the depth review of the internal control system.
Help in evaluation and training of audit staff:
Working papers serve as a means of examination of the audit staff. These papers help the auditor to know whether the work done by the audit staff is upto the prescribed standard. These papers reflect the auditor's capability and capacity to audit, since at every step he has to take proper decisions regarding the audit work to be done by his staff.
Good evidence for the work done:
Working papers serve as evidence of the nature and extent of work being done by the auditor and his staff. The audit tests done, procedures followed by him and conclusions arrived by him are all recorded and form part of these working papers. These serve as a good evidence for the auditor. In case he is charged for negligence, he can use these papers as a defence for himself.
Can be a suitable basis for further work:
The auditor and his staff takes notes and makes out analysis of the work done by him or his audit staff. These notes are of great importance for further work and may be used by the auditor in several other areas of the enterprise.
