Enhance your Employment Contracts with Sales Audit Procedures

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hello and welcome to the channel in today's video i'm going to be talking about documentation in auditing so how does documentation work in auditing let's get right into the video so i'm going to be taking you through some practical ways that we document in auditing but before we do that let's quickly look at the definition of um what we mean by documentation in auditing so in auditing documentation it simply supports the work performed by the engagement team so when the engagement team are carrying out an audit the documentation is what is going to support the work they are performing so this is a very simple definition of all mean by documentation so what are some examples of how documentation working auditing so um during an audit the clients will often provide documents okay so when the engagement team are performing an audit they will often expect to receive some document or share those from the client right and they are going to use this document within the audit so what are some examples of documents or shadows that the client might provide so the client can provide the bank statement contracts like revenue contracts loan agreement reports of experts and correspondence continuity or amortization schedule so these are some documents that you can expect to receive dorian and audit so what are you going to do with this document so remember these documents can be in the form of pdf they can be in the form of excel they can be in the form of word document they can be in the form of um email correspondence okay they can be in any format the client can send you this document in any format so um all this document all documents used by the engagement team which was provided by the client okay must be marked as pbc can you see it right here pbc so whenever the whenever you're working on an audit and the client provides you with a document which you're going to use during the audits it must be marked pbc and what does this mean so the 10 pbc can either mean provided by the client or prepared by the client so once you mark the document pbc anybody reviewing that document or anybody looking at that document knows that okay this was not prepared by the audits team or the engagement team this document was prepared by the client so that's why you have to market pbc okay so now let's look at um an example of how you do this so imagine you're working on the particular engagement and you got this bank reconciliation from the client the client provided this bank reconciliation to um give give you this bank reconciliation so what are you going to do with it you're going to mark it pvc just like we said here and once i see this i know that okay this was prepared by the client not you so this is an example of documentation so what are you doing by writing pbc you're actually documenting okay so what is another form of documentation you can perform during the audit so all pbc documents okay included in the working paper section wp we can call that working paper need to have annotation or references on them okay so let's this is another kind of documentation so using any um document that was provided by the client it needs to have annotation reference so let's look at an example of the reference so after putting pbc what else can you put on the document provider you have to put like a reference so you can see here i have working paper a dot one okay so that shows that this is the reference i'm giving to this um document so i can tell somebody who's going to review that okay go and take a look at working paper 8.1 so the person can simply go to these documents okay because all document provided by the client or all working paper needs to have a reference number you can just leave the document blank okay because how you're going to tell someone if you want them to go and review a particular working paper you have to tell them with the reference number okay so this is another form of documentation in your working paper so let's go on so it says for best best practices for a strong audit documentation okay so what are some um best practices so what are some things you need to do to have a strong documentation in your working paper so you have to use defined tick marks okay so we use tick marks a lot in auditing and you also have to make references to indicate your work on your working paper so what are some tick marks you might use so let's look at one of the tick mark i use here so you can see the stick mark right here in my working paper here i put something like this green um tick mark here so this means footed okay we call it footing in auditing that means i have um actually did a form of um some like you know addition to show that okay this value is actually correct so this is just four things okay so somebody that picks up this working paper knows that okay i've actually checked the arithmetical accuracy of these numbers okay so you can just put tick mark whenever you perform work on your working paper and you can also see in my working paper i put a note here note one so anybody reviewing my working people will go and look at the notes okay what does this what does this note says okay and when you go to note one you can see my comment i said the balance does not agree to the gl the difference is less than materiality no follow-up performed so can you see the way i'm documenting in my working paper so this is how you document when you're performing an audit okay so that anybody revealing your working paper can follow through can follow along okay you can see there's a difference and i'm making a note on the reason for this difference okay and i'm saying the difference is less than materiality so we don't need to perform any other procedures okay so this is how you document in your audit working paper and what is another best um best practice it says i'm presenting specific details on the document okay so on your working paper you have to present specific details like the date of discussion who the discussion was held with okay so this has some um details you want to put on your working paper so let's look at how i did my so i got this bank statement from my client okay remember you have to put on pbc on it and on on the document i put um my notes right here can you see my note i said the bank statement was provided directly by the bank okay so for this one i might not put pbc because this was provided to me directly from the client's bank and i put the name of the bank representative i put the email of the representative and i put the date i got the bank statement okay so can you see he said you must present specific details okay and that's what i've done in my working paper yeah i've put the specific details because when you get these bank statements you cannot just leave it blank you have to document something on this working paper and that is what i've done i've made my documentation on the working paper and let's look at the last um best practices say any work not documented is assumed not done okay so in auditing if you don't document it it is assumed you have not done that work okay because anybody reviewing it it's not going to know whether you actually did the work or not so the reviewer is only going to know if you did the work if they see your documentation okay so you can see my notes here i said the reviewer is not able to tell what you're thinking so if you don't document it the reviewer cannot tell if you actually perform the work or not so make sure you always document like this in your working paper you put the appropriate um tick mark and then you put the reference and then for a document that is prepared by the client you want to ensure you are putting your pbc on it so this is um you know a simple way with documenting audited thank you very much for watching the video today please like and subscribe to the channel if you have any question please put in the comment section i'm gonna see you in my next video and bye