Vanderbilt Law Review


T. J. Fiflis

First Page



When the auditor begins the audit program, he will record in "working papers" his work and findings. Each page will be dated and initialed by all persons who dealt with it. The papers should be indexed and bound and retained for some years. They should also be comprehensible as they are intended for use by others as well as for later use.

A trial balance is usually the first working paper. Other standard working papers are data from the corporate charter, by-laws,and minutes and analyses of accounts, prescribed by the audit program. One of the last working papers will be the management's"letter of representation" executed by the top officers, stating that no relevant post-balance-sheet-date events or other matters make the financial statements misleading, that disclosure of all known shortages has been made, that complete and correct corporate minutes have been supplied, and other matters of like import. The working papers not only form the basis for integration of the audit findings with the financial statements but also are the facts that a partner or other reviewer of the field work will check. The SEC has stated that the working papers must support in detail any unusual items as well as all others. They also should establish the adequacy of the audit procedures.

After completion of the field work and discussions with management of questions raised as to the form of the financial statements, the auditor will "report" on whether he conducted his examination in accordance with generally accepted auditing standards (GAAS) and whether the statements are presented in accordance with generally accepted accounting principles (GAAP) consistently observed in relation to the prior period.