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Questions and answers

Briefing teams for the year-end audit season can generate interesting questions.

Q: At a recent audit course the speaker suggested that many firms over-document the work done and the results in relation to tests of detail, and that rather than producing a detailed spreadsheet, a simple record of what was done and which items were tested could be made. How much documentation is needed?

A: Concerns about under-documentation can lead to tests of detail being over-documented. I have seen completeness of income tests where along with the goods outwards number, the auditor documented the invoice number, transaction date, goods delivered, quantities, VAT, net amount, name of the person who took the order, etc. Some of it may be superfluous, but circumstances will decide how much is needed.