Recording the execution stage of a statutory audit : an analysis

Abstract

Purpose: The objectives of this study were to assess the significance of working papers, while evaluating the approach towards the documentation of the execution stage. This study also sought to assess the developments of audit documentation within Maltese auditors. Design: In pursuit of these objectives, semi-structured interviews were carried out with external auditors working in Big 4 firms, mid-tier firms and those working as sole practitioners. Findings; Findings indicated that local auditors` practices generally conform to each other. While sole practitioners take on smaller clients than Big 4 firms and mid-tiers, the nature and extent of the audit fieldwork procedures, are aligned. Unlike larger firms, sole practitioners were found to be in divergence with regards to Interim Testing since their client-base does not require such exercise. With regards to the content of working papers, all auditors seem to be in agreement. However, while all auditors were found to make use of standardisation, the concept of paperless audits is mostly utilised by larger firms, since smaller auditors are still quite uncertain. Conclusions: The study concludes that regardless of whom is carrying out the audit, the quality attributes of the audit fieldwork and its documentation practices are unchanged. ‘An audit is an audit’ and its scope and results, do not seem to be effected by the size of the auditor. Implications: This dissertation should encourage local external auditors to maintain their level of significance towards working papers, as well as to strive to improve the practice of documenting the audit by means of paperless audits.