Question

1. Internal auditors are required to document their work in working papers that provide complete, accurate, and concise documentation of the engagement process. Discuss the potential adverse consequences of poorly prepared internal auditing working papers.  

Answer 1

Adverse Consequences of poorly prepared internal auditing working papers-

1. Poor planning and audit performance- Audit Documentation supports strong base for planning and performing for audit. Without such documentation, it adversely affects audit planning and performance.

2. Peer Review- The auditors are subject to review. In case the auditors are found to be not maintaining proper documents by the Peer Review Board, they may face penal consequences and suspension of license.

3. Penal liabilities- The audit documents safeguards the auditor in case of frauds. Poor documentation may lead to face of criminal or civil consequences for the auditor.