No year can ever be the same as the previous year − we will always perform new enhanced procedures, we will always improve the template working papers, and we will always improve on what we did last year
There are not a lot of words that make me smile, but then there are some that make me shiver in my boots. Words like ‘there is a huge problem’ often make me smile as it means that the trainee needs some guidance or is misunderstanding information. However, the words that make me shiver in my boot include the phrases: ‘but it wasn’t done in the previous year’ and ‘it is not part of the template’.
There are a few things the trainees know very well in our firm … You do not ‘roll forward’ a prior period working paper, and this includes copy and pasting last year’s information into a current period working paper. This is not saying you are not allowed to reference the working paper for guidance or to find a little bit of information before you speak to the client for more in-depth information. But I do not want to find a sentence that even looks like the trainee used ctrl ‘V’ ctrl ‘C’.
But it was not done in the previous year
This phrase often which comes up once a working paper has been reviewed and the reviewer inquired why certain testing has not been performed. It can be that the senior had communicated to the trainee that they should include certain testing in their working paper, or that the company has updated certain procedures to include that specific test after the previous year’s audit.
When a trainee indicates that they have not performed certain tests because it was not performed in the previous year, it opens space for jokes like ‘Why did the auditor cross the road … because they did it last year.’
The training environment, working environment, testing environment is an ever-changing process and when trainees receive guidance whether it be from seniors or from updated template working papers to perform ‘new’ procedures they should embrace it as part of the ever-improving system which they form part of and not dismiss it because it was not performed in the previous year so it is not relevant for the current year.
It is not part of the template
A perfect template working paper is a leprechaun in the training environment. The analogy of a leprechaun has been used because if you are lucky the template will cover all aspects of the testing you need to perform, and you win the golden pot of predetermined procedures. However, this is also an exceedingly rare type of template working paper that you may find, if ever.
A template working paper is there to guide a trainee not to re-invent the wheel, and also to prevent additional time being spent on ‘preparing’ the working paper that could have been better utilised in the execution of work. The template is a guide to ensure that you consider all the assertions for that section and have performed the ‘minimum’ required procedures, but this is not the alpha omega of procedures that will ever be performed to obtain sufficient appropriate audit evidence.
Copy and pasting
A question I have been asked regularly is why I have a problem with trainees copy and pasting information from a prior period working papers into current period working papers if everything stayed the same because it will ‘save time’.
That little bit of time you are saving by copy and pasting the information is small in comparison to the number of issues it can create, some of which are:
- Let us start with the easy one − consistency. Each person has his or her own unique ‘voice’ in the manner which they document information. When a trainee copies information from a prior period working paper, it is quite evident that this information was not documented by the trainee performing the working on the working paper due to the differences in their ‘voices’. This makes a working paper seem inconsistent.
- When trainees copy and paste information they forget to change important information such as names and surnames, positions, dates and specific events which occurred in the current period (this is usually the easiest way in which a person can identify information that has been copied and pasted). This places doubt on the work performed because it creates the impression that the trainee is not well informed with their work or client.
- Nothing ever remains the same. From last year to this year, there will always be new information, changes to positions, personnel, economic conditions which need to be considered, and when you copy and paste the information you are jeopardising the integrity of the work which has been performed by not considering these events.
- You are passing off someone else’s work as your own. When you sign off a working paper as ‘Planned by’ or ‘Performed by’ this is your acknowledgement that the work performed is your own and you take ownership of everything you have documented. When you have copied in some of the information from the prior period, you are taking ownership of another person’s work.
It is therefore important to remember that the financial service industry and the client serviced are ever changing. And ever-changing conditions require new procedures to be continuously developed to obtain more sufficient evidence to lower the audit risk.
AUTHOR │ Chantal Potgieter AGSA, Registered Tax Practitioner, BComp Acc Science, is Audit Manager at Diastoleus Professio Incorporated