Audit documentation
A) should identify the items tested when the audit procedures involve sampling of transactions or balances.
B) does not aid in the preparation of the tax return since accounting and tax rules differ.
C) is another term for the audit program.
D) should not be given to anyone outside the audit firm, even if a subpoena has been issued.

Question

Quizplus · Accepted Answer

Audit documentation should identify the items tested when the audit procedures involve sampling of transactions or balances. It is important to have documentation to support the results of the audit and to provide evidence of the work performed.

B is incorrect because audit documentation can still be relevant to the preparation of the tax return, as it may provide information on the financial statements that are used to compute the tax liability.

C is incorrect because the audit program is a separate document that outlines the specific procedures to be followed during the audit.

D is incorrect because there may be situations where audit documentation needs to be provided to third parties, such as regulators or other auditors. However, the auditor should maintain confidentiality of the information and obtain appropriate permissions before disclosing the information.

Audit Documentation