The working papers compiled by an auditor during a financial statement audit are___________?
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Answer: C. Owned by the auditor
Explanation
Audit working papers are prepared by the auditor and remain the exclusive property of the audit firm. Ownership stays with the auditor to protect client confidentiality and maintain professional independence. Working papers document the audit procedures performed and conclusions reached during the engagement. Working papers include audit programs, analyses, memoranda, and confirmation letters compiled during fieldwork. Client records belong to the company, whereas audit working papers belong strictly to the CPA firm. Strict retention and confidentiality rules govern how audit working papers are stored and managed.
Auditors retain working papers for statutory periods to defend their professional opinions if challenged. Clients do not have legal ownership rights over the confidential working papers created by their auditors. Proper documentation standards ensure audit quality and regulatory compliance across accounting firms. Evidence for audit conclusions describes the function of working papers rather than their legal ownership. Stating that working papers are owned by the client contradicts established legal and professional rules. Retaining papers in the office until a change occurs misrepresents permanent ownership rights of auditors.
- Subject
- Accounting and Finance
- Category
- Auditing
- Topic
- —
- Difficulty
- medium
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