Definition
Working papers can be paper or electronic. A good one states the objective, identifies the account and period, names the source of the data, describes the work done in enough detail to be repeated, records exceptions and ends with a conclusion. Preparer and reviewer initials and dates show who did and who checked the work. Tick marks and cross-references tie the page to others.
Why it matters in an audit or review
AU-C 230 requires documentation to let an experienced auditor with no connection to the engagement understand the procedures performed, the evidence obtained and the significant matters. A working paper that lacks a stated purpose or a conclusion cannot show that. Reviewers and peer reviewers start with these pages.
Example
A bank reconciliation working paper for the operating account at December 31 carries the client name, period and purpose in the header. It lists the bank balance of $412,300 (illustrative), reconciling items, the book balance, the confirmation reference, a tick mark legend and the conclusion that no exceptions were found. The reviewer initials and date appear after the preparer's.
Common mistakes
- Documenting the work but not the conclusion.
- Describing the procedure in terms only the preparer understands.
- Using a cross-reference that no longer matches the file index.
FAQ
Do working papers belong to the auditor?
Generally yes, as the auditor's own work product, but state law and licensing rules on client records and access can be stricter, so check the rules that apply to the firm.
Sources
- AICPA, AU-C Section 230, Audit Documentation
- AICPA Code of Professional Conduct, ET 1.400.200, Records Requests
- State board of accountancy rules on records and working papers
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error