ASA 230 and ASAE 3100 require the auditor to prepare, on a timely basis, audit documentation that is sufficient and appropriate to provide:

1. a basis for the auditor’s report; and
2. evidence that the audit was performed in accordance with Auditing Standards, ASAEs and applicable legal and regulatory requirements.

Preparing sufficient appropriate audit documentation on a timely basis helps to enhance the quality of the audit and facilitates the effective review and evaluation of the audit evidence obtained and conclusions reached before the auditor’s report is finalised. Documentation prepared at the time the work is performed is likely to be more accurate than documentation prepared subsequently.

In assessing the extent of documentation, the auditor considers what audit documentation is necessary to enable an experienced auditor, having no previous connection with the audit, to understand:

1. the nature, timing, and extent of the audit procedures performed to comply with Auditing Standards, applicable ASAEs and applicable legal and regulatory requirements;
2. the results of the audit procedures and the audit evidence obtained; and
3. significant matters arising during the audit and the conclusions reached thereon.

The form, content and extent of audit documentation depend on factors such as the:

• nature of the audit procedures to be performed;
• identified risks of material misstatement;
• extent of judgement required in performing the work and evaluating the results;
• significance of the audit evidence obtained;
• nature and extent of exceptions identified;
• need to document a conclusion or the basis for a conclusion not readily determinable from the documentation of the work performed or audit evidence obtained; and
• audit methodology and tools used.

It is, however, generally neither necessary nor practicable to document every matter the auditor considers during the audit.

Nature of Documentation

Audit documentation may be recorded on paper, electronically or on other media. It includes, for example, audit programs, analyses, records of audit testing and results of that testing, issues memoranda, summaries of significant matters, letters of confirmation and representation, checklists, and correspondence (including email) concerning significant matters. Abstracts or copies of the SMSF’s records, for example significant and specific contracts and agreements, may be included as part of audit documentation, if considered appropriate. Checklists and audit work programs without supporting audit evidence are not considered to be appropriate audit evidence.

Oral explanations to the auditor, on their own, do not represent adequate support for the work the auditor performed or conclusions the auditor reached, but may be used to explain or clarify information contained in the audit documentation. It is essential for the auditor to collate and retain an audit file containing the audit documentation. Even though SMSF audits are not conducted under the Corporations Act 2001, the retention period for audit working papers is generally accepted to be at least seven years^[75] after the date the auditor’s report is signed.

ASA 230 requires the auditor, in documenting the nature, timing and extent of audit procedures, to record by whom and when the audit work was performed and, if applicable, who reviewed the audit work and the extent of the review.

The auditor completes the assembly of the final audit file on a timely basis after the date of the auditor’s report. This facilitates justification and verification that appropriate audit procedures were performed in the audit. Quality reviews, internal and external, are able to be performed more quickly and efficiently if a file is constructed in an orderly and logical manner.

Under ASA 230, the auditor is required to adopt appropriate procedures for maintaining the confidentiality, safe custody, integrity, accessibility and retrievability of audit documentation.

Significant Matters

The auditor may consider it helpful to prepare and retain as part of the audit documentation a summary (sometimes known as a completion memorandum) that describes the significant matters identified during the audit and how they were addressed, or that includes crossreferences to other relevant supporting audit documentation that provides such information. Such a summary may facilitate effective and efficient reviews and inspections of the audit documentation. The preparation of such a summary may assist the auditor’s consideration of the significant matters. In addition, ASIC’s competency standards^[76] require the auditor to prepare a summary of findings relating to both compliance matters and matters relating to the financial report for each SMSF audit.

Judging the significance of a matter requires an objective analysis of the facts and circumstances of the situation. Significant matters include:

• matters that give rise to significant risks (as defined in ASA 315);
• results of audit procedures indicating that the financial information could be materially misstated; or a need to revise the auditor’s previous assessment of the risks of material misstatement and the auditor’s responses to those risks;
• circumstances that cause the auditor significant difficulty in applying necessary audit procedures; and
• findings that could result in a modification to the auditor’s report.

If the auditor identifies information that contradicts, or is inconsistent with, the auditor’s final conclusion regarding a significant matter, the auditor documents how the contradiction or inconsistency has been addressed in forming the auditor’s final opinion.