Question

Bob Smith is an intern working on the audit of XYZ Enterprises. What is true regarding the audit working papers Bob prepares?

1) Bob should initial the work paper together with the date the work paper was prepared.
2) Bob should not initial the work paper until the audit is completed.
3) Bob should not initial the work paper until it has been reviewed.
4) Bob should initial the work paper together with the date of the audit report.

Answer 1

Bob Smith should initial the audit working papers with the date they were prepared to provide a clear audit trail and ensure accountability, not wait until the audit completion or after review.

Step-by-step explanation:

Bob Smith, as an intern working on the audit of XYZ Enterprises, should adhere to best practices regarding the preparation and initialing of audit working papers. The correct approach for Bob is to initial the work paper together with the date the work paper was prepared. This ensures that there is a clear audit trail and accountability for the work performed. It also facilitates the review process, showing when each part of the audit was completed. Audit standards require documentation to be reviewed and signed off by the auditor responsible, but initialing is done as soon as that piece of work is complete. Therefore, option 1 is correct, and Bob should initial and date the working papers when he prepares them, not wait until the end of the audit or until after review.