Generally, the current working papers file of the auditor should encompass____________?
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Answer: C. A copy of financial statements
Explanation
Current financial statements provide the primary foundational reference for the active year audit engagement. A copy of the financial statements belongs in the current working paper file for annual review. Permanent files store long-term corporate documents, whereas financial statements relate to the current period. Current working paper files contain documentation specifically relevant to the active audit period. Permanent working paper files retain documents of ongoing significance across multiple accounting years. Auditors organize working papers into structured files to facilitate review and regulatory inspection.
Audit supervisors examine the current working paper file to verify proper testing of financial statements. Archiving current files occurs immediately following the successful completion of the annual audit report. Financial statement copies enable easy cross-referencing against detailed substantive testing schedules. Flowcharts of internal controls represent permanent structural information stored in permanent files. Organisation charts document corporate structures and belong in the permanent working paper file. Copies of bonds and debentures establish long-term financial obligations suitable for permanent files.
- Subject
- Accounting and Finance
- Category
- Auditing
- Topic
- —
- Difficulty
- medium
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