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Thread: 03 Standard on Internal Audit - SIA 3 Documentation

  1. #1
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    Default 03 Standard on Internal Audit - SIA 3 Documentation

    The following is the text of the Standard on Internal Audit (SIA) 3 "Documentation", issued by the Council of the Institute of Chartered Accountants of India. This Standard should be read in conjunction with the Preface to the Standards on Internal Audit, issued by the Institute in November, 2004.
    In terms of the decision of the Council of the Institute of Chartered Accountants of India taken at its 2601 meeting held in June, 2006, the following Standard on Internal Audit shall be recommendatory in nature in the initial period. The Standard shall become mandatory from such date as notified by the Council.

  2. #2
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    Default Introduction of standard on internal audit 3 - SIA 3

    1. The purpose of this Standard on Internal Audit (SIA) is to establish Standards and provide guidance on the documentation requirements in an internal audit.

    2. Paragraph 10 of the Standard on Internal Audit (SIA) 2, Basic Principles Governing Internal Audit, states as follows:

    "10. The internal auditor should document matters, which are important in providing evidence that the audit was carried out in accordance with the Standards on Internal Audit and support his findings or the report submitted by him. In addition, the working papers also help in planning and performing the internal audit, review and supervise the work and most importantly, provide evidence of the work performed to support his findings or report(s)."

  3. #3
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    Default meaning of Internal audit documentation

    (a) "Internal audit documentation" means the record of audit procedures performed, including audit planning as discussed in the Standard on Internal Audit (SIA) 1, Planning an Internal Audit, relevant audit evidence obtained, and conclusions the auditor reached (terms such as "working papers" or "workpapers" are also sometimes used). Thus, documentation refers to the working papers prepared or obtained by the internal auditor and retained by him in connection with the performance of his internal audit.

  4. #4
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    Default meaning of Experienced internal auditor

    (b) "Experienced internal auditor" or " a reviewer" means an individual (whether internal or external to the entity) who has:

    (i) reasonable knowledge and experience of internal audit processes;

    (ii) reasonable knowledge of SIAs, other relevant pronouncements of the Institute and applicable legal and regulatory requirements;

    (iii) reasonable understanding of the business environment in which the entity operates; and

    (iv) reasonable understanding of internal audit issues relevant to the entity's industry.

  5. #5
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    Default Internal audit documentation of SIA 3

    Internal audit documentation:

    Aid in planning and performing the internal audit.
    Aid in supervision and review of the internal audit work.
    Provide evidence of the internal audit work performed to support the internal auditor's findings and opinion.
    Aid in third party reviews, where so done.
    Provide evidence of the fact that the internal audit was performed in accordance with the scope of work as mentioned in the engagement letter, SIAs and other relevant pronouncements issued by the Institute of Chartered Accountants of India.

  6. #6
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    Default Identification of the Preparer and Reviewer in interna audit

    Identification of the Preparer and Reviewer

    11. It is also essential that the internal audit documentation identify the following:

    (i) who performed that task and the date such work was completed;

    (ii) who reviewed the task performed and the date and extent of such review;

    (iii) reasons for creating the particular internal audit documentation;

    (iv) source of the information contained in the internal audit documentation; and

    (v) any cross referencing to any other internal audit documentation.

  7. #7
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    Default The preparers and reviewers of the internal audit documentation should also sign them as per standard on internal audit

    The preparers and reviewers of the internal audit documentation should also sign them.

    12. The internal audit file should be assembled within sixty days after the signing of the internal audit report. Assembly of the internal audit documentation file is only an administrative process and does not involve performance of any new audit procedures or formulation of new conclusions. Changes may be made to the audit documentation file only if such changes are administrative in nature. For example:

    deleting or discarding superseded documentation;
    sorting, collating and cross referencing internal audit documentation;
    signing off on completion checklists relating to file assembly process; and
    documenting audit evidence that the internal auditor has obtained, discussed and agreed with the relevant members of the internal audit team before the date of the internal auditor's report.
    13. When exceptional circumstances arise after the date of the submission of the internal audit report that require the internal auditor to perform new or additional audit procedures or that lead the internal auditor to reach new conclusions, the internal auditor should document:

    (i) the details of circumstances encountered along with the documentary evidence, if any, thereof;

    (ii) the new or additional audit procedures performed, audit evidence obtained, and conclusions reached; and

    (iii) when and by whom the resulting changes to the audit documentation were made, and (where applicable) reviewed.

  8. #8
    AAS
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    Default Document Retention and Access in internal audit

    Document Retention and Access

    14. The internal auditor should formulate policies as to the custody and retention of the internal audit documentation within the framework of the overall policy of the entity in relation to the retention of documents. The internal auditor retains the ownership of the internal audit documentation. While formulating the documentation retention policy any legal or regulatory requirements in this regard also need to be taken into consideration. Management and other designated personnel may seek access to the internal audit documentation of the internal audit department subject to the approval of the internal auditor and client or such other third party may seek access if there is any legal or regulatory requirement or as may be permitted by the client.

    15. After the assembly of the audit file, the internal auditor should not delete or discard internal audit documentation before the end of the retention period.

  9. #9
    AAS
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    Default Effective Date of Internal Audit

    Effective Date

    16. This Standard on Internal Audit will apply to all internal audits commencing on or
    after .................. Earlier application of the SIA is encouraged.

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