Audit Files

An auditor generally prepares a files to keep the documents where more explanation and clarification is needed and facts where detail investigation or study is needed. Such types of file is known as audit file. Audit file can be divided into two groups,

a) Current files

b) Permanent files

a) Current files:

A current file contains information primarily related to the set of accounts under audit during the current year. Current files include the following things.

1. Audit program.
2. Trial balance.
3. Balance sheet.
4. Analysis of transactions and balances.
5. Method of internal control.
6. Working of bank reconciliation statement.
7. Conclusion reached by the auditor.

b) Permanent files:
Permanent file means such documents which are used for long period of time and its provision should be shown in annual report. Permanent file includes the following papers and documents.

1. Memorandum and article.
2. A copy of relevant statutory or legal requirement.
3. A list of important books of accounts prepare by clients.
4. Details of holding company and subsidiary company.
5. Statement of stock valuation, work in progress and computation of depreciation.
6. Letter of announcement.
7. Decision of various meeting.