Final answer:
Bob should initial the audit working papers together with the date they were prepared, not the date of the audit report or completion of the audit. Initialing documents at the time of preparation ensures accountability and supports the audit trail.
Step-by-step explanation:
When Bob Smith, an intern, prepares audit working papers for XYZ Enterprises, it's important to adhere to professional best practices and the specific guidelines provided by his audit firm or the supervising auditor. Audit working papers serve as a record of the audit procedures performed, the evidence obtained, and the conclusions reached, and therefore need to include proper documentation.
Initialing audit working papers is a crucial part of ensuring the reliability and integrity of the audit process. These initials, along with the date, serve as evidence that the work has been performed, reviewed, and that responsibility is taken for the content.
The accurate option in this case is the third: Bob should initial the work paper together with the date the work paper was prepared. This demonstrates that Bob prepared the document and indicates when the work was done, which is necessary for the audit trail and helps in the review process.
Initials are a part of the documentation that provides clarity on who performed the work and when, aiding in accountability and the ability to follow the audit trail for future reference or in case issues arise that require investigation of the audit's thoroughness.