Wiley Practitioner's Guide to GAAS 2020. Joanne M. Flood
for the purpose of our audit means that matters may have existed that would have been assessed differently by you.
The audit documentation was prepared for the purpose of providing principal support for our report on Widget Company December 31, 20X1, financial statements and to aid in the conduct and supervision of our audit. The audit documentation is the principal record of the auditing procedures performed, the evidence obtained, and the conclusions reached in the engagement. The auditing procedures that we performed were limited to those we considered necessary under generally accepted auditing standards to enable us to formulate and express an opinion on the financial statements taken as a whole. Accordingly, we make no representation as to the sufficiency or appropriateness, for your purposes, of either the information contained in our audit documentation or our audit procedures. In addition, any notations, comments, and individual conclusions appearing on any of the audit documentation do not stand alone, and should not be read as an opinion on any individual amounts, accounts, balances, or transactions.
Our audit of Widget Company December 31, 20X1, financial statements was performed for the purpose stated above and has not been planned or conducted in contemplation of your [state purpose: for example, “regulatory examination”] or for the purpose of assessing Widget Company compliance with laws and regulations. Therefore, items of possible interest to you may not have been specifically addressed. Accordingly, our audit and the audit documentation prepared in connection therewith should not supplant other inquiries and procedures that should be undertaken by the [name of regulatory agency] for the purpose of monitoring and regulating statements of Widget Company. In addition, we have not audited any financial statements of Widget Company since [date of audited balance sheet referred to in the first paragraph above], nor have we performed any audit procedures since [date], the date of our auditor’s report, and significant events or circumstances may have occurred since that date.
The audit documentation constitutes and reflects work performed or evidence obtained by [name of auditor] in its capacity as independent auditor for Widget Company. The documents contain trade secrets and confidential commercial and financial information of our firms and Widget Company that are privileged and confidential, and we expressly reserve all rights with respect to disclosures to third parties. Accordingly, we request confidential treatment under the Freedom of Information Act or similar laws and regulations when requests are made for the audit documentation or information contained therein or any documents created by the [name of regulatory agency] containing information derived therefrom. We further request that written notice be given to our firm before distribution of the information in the audit documentation (or photocopies thereof) to others, including other government agencies, except when such distribution is required by law or regulation.
[If it is expected that photocopies will be requested, add:]
Any photocopies of our audit documentation we agree to provide you will be identified as “Confidential Treatment Requested by [name of auditor, address, telephone number].”
Firm signature
Illustration 3. Written Communication to the Client When Regulator May Request Access to Audit Documentation When Not Required by Law or Regulation (from AU-C 9230.13)
The audit documentation for this engagement is the property of [name of auditor] and constitutes confidential information. However, we may be requested to make certain audit documentation available to [name of regulator] for [describe the regulator’s basis for its request]. If requested, access to such audit documentation will be provided under the supervision of [name of auditor] personnel. Furthermore, upon request, we may provide photocopies of selected audit documentation to [name of regulator]. The [name of regulator] may intend or decide to distribute the copies of information contained therein to others, including other government agencies.
You have authorized [name of auditor] to allow [name of regulator] access to the audit documentation in the manner discussed above. Please confirm your agreement to the above by signing below and returning to [name of auditor, address].
Firm signature
Agreed and acknowledged:
[Name and title]
[Date]
Illustration 4. Audit Documentation Requirements in Other AU-C Sections (from AU-C 230.A30)
The following lists the main paragraphs in other AU-C sections that contain specific documentation requirements. See the related chapters in this book for additional information.
| a. | Paragraphs .10, .13, and .16 of Section 210, Terms of Engagement |
| b. | Paragraphs .25–.26 of Section 220, Quality Control for an Engagement Conducted in Accordance with Generally Accepted Auditing Standards |
| c. | Paragraphs .43–.46 of Section 240, Consideration of Fraud in a Financial Statement Audit |
| d. | Paragraph .28 of Section 250, Consideration of Laws and Regulations in an Audit of Financial Statements |
| e. | Paragraph .20 of Section 260, The Auditor’s Communication with Those Charged with Governance |
| f. | Paragraph .12 of Section 265, Communicating Internal Control Related Matters Identified in an Audit |
| g. | Paragraph .14 of Section 300, Planning an Audit |
| h. | Paragraph .33 of Section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement |
| i. | Paragraph .14 of Section 320, Materiality in Planning and Performing an Audit |
| j. | Paragraphs .30–.33 of Section 330, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained |
| k. | Paragraph .12 of Section 450, Evaluation of Misstatements Identified during the Audit |
| l. | Paragraph .20 of Section 501, Audit Evidence—Specific Considerations for Selected Items |
| m. | Paragraph .08 of Section 520, Analytical Procedures |
| n. | Paragraph .22 of Section 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures |
| o. | Paragraph .28 of Section 550, Related Parties |
| p. | Paragraph .22 of Section 570, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern |
| q. |
Paragraphs .49 |