Documentation (Ref: Para. 32)Documentation (Ref: Para. 32)

Documentation (Ref: Para. 32)

1. The manner in which the requirements of paragraph 32 are documented is for the auditor to determine using professional judgement. For example, in audits of small entities the documentation may be incorporated in the auditor’s documentation of the overall strategy and audit plan.[24] Similarly, for example, the results of the risk assessment may be documented separately, or may be documented as part of the auditor’s documentation of further procedures.[25] The form and extent of the documentation is influenced by the nature, size and complexity of the entity and its internal control, availability of information from the entity and the audit methodology and technology used in the course of the audit.
2. For entities that have uncomplicated businesses and processes relevant to financial reporting, the documentation may be simple in form and relatively brief. It is not necessary to document the entirety of the auditor’s understanding of the entity and matters related to it. Key elements of understanding documented by the auditor include those on which the auditor based the assessment of the risks of material misstatement.
3. The extent of documentation may also reflect the experience and capabilities of the members of the audit engagement team. Provided the requirements of ASA 230 are always met, an audit undertaken by an engagement team comprising less experienced individuals may require more detailed documentation to assist them to obtain an appropriate understanding of the entity than one that includes experienced individuals.
4. For recurring audits, certain documentation may be carried forward, updated as necessary to reflect changes in the entity’s business or processes.