Auditing Standard Standard: Au Section

Auditing Standard

Standard: AU Section 339 Auditing Documentation

Summary of the new standard (main issues addressed and/or new concepts).

In Section 339, it discusses the basic standards that all auditors must embrace: before, during and after an audit has been conducted. It is providing guidance in a number of areas to include: documentation, conducting audits, reporting irregularities and maintaining confidentiality. As far as documentation is concerned, the standards define what forms need to be used and how the auditor is to keep track of the work that has been conducted. It then, discusses how findings should be interpreted as: a significant breach and what is considered to be nothing more than an anomaly. ("AU Section 369")

Conducting audits is when the rule is defining how: various interviews should take place and what items need to be looked at during the test. This is when the auditor will: sample various documents and scan for possible trends in the balance sheet. Once this occurs they will then, record and analyze this information, to identify structural weaknesses. ("AU Section 369")

Reporting irregularities is when the rule is stating how: anomalies and differences in the financial information should be documented. In this case, the auditor must conduct an alternative audit, recording the results in their working papers. This will disclose how the anomaly was discovered and the results of the alternate procedure. ("AU Section 369")

Maintaining confidentiality is when the auditor must ensure that their client's personal information is not compromised. As they must take reasonable steps, to ensure that they are always protected. In this case, the auditor will: limit the overall scope when revisions that could take place and the amounts access (to only certain team members / authorized parties). These different elements are important, because they are showing the basic procedures and documentation that should be utilized during an audit. ("AU Section 369")

Part 2: Comments on how implementation of this standard will improve audits or audit procedures

The implementation of this standard will help to improve the overall quality of audits by: establishing procures for documenting how they are being conducted. This is important, because having this system will ensure increased amounts of: accountability and transparency. as, auditors will keep detailed records disclosing their: findings and initial remarks. Over the course of time, this increases the accuracy of the financial reports that are being released. as, this can be used to: identify weaknesses in a company's internal and external controls. At which point, auditors can help organizations to create effective mechanisms, to addresses these weaknesses. Once this takes place, this means that financial information being provided to the public is accurate, by ensuring that any kind of loopholes are not exploited. When you have increased amounts of documentation / record keeping, this helps to prevent possible abuses through: increased transparency and monitoring. ("AU Section 369")