Compliance with Auditing Standard No. 3

Auditing Standard 3 outlines the requirements for audit documentation that an auditor should prepare and retain.

In general, we have made progress in meeting As No. 3 standards. We've accomplished the objectives of audit documentation, generally met the audit documentation requirements, and have provided documentation of specific matters if it was necessary. The retention of and subsequent changes to audit documentation part of the standard may not have yet been met.

Objectives of Audit Documentation
The objectives of audit documentation are to (1) have a written record of the basis for auditor conclusions and (2) have information that might be reviewed. Having a written record or evidence supporting auditors conclusions is important because it facilitates planning of the audit, audit performance, supervision of the engagement, and is the basis for the review of the quality of work done. Audit documentation should be documented in such a way that it can be easily reviewed by by others including but not limited to members of the engagement team.
Our audit has been documented via this blog and the information can be easily reviewed.

Audit Documentation Requirement

The main ideas of audit documentation requirements are:

Have we complied?	Audit Documentation Requirements
Yes	Document in compliance with PCAOB Standards.
Yes	Document in a clear and organized enough manner so that the reviewer may understand.
Yes	Documentation should support auditor conclusions with respect to every relevant financial statement assertion.
Yes	Documentation should show that accounting records agree with financial statements. Procedures performed, evidence obtained, and conclusions reached need to be documented.
Yes	Documentation must have enough information for an experienced auditor with no previous connection to the engagement to be able to understand what went on during the engagement, who performed and reviewed the work and when.
Yes	Documentation must include information the related to significant findings or issues that is inconsistent with final conclusions.
N/A, but should we encounter this issue we will comply	If after the documentation completion date (explained in the next section), the auditor discovers “that audit procedures may not have been performed, evidence may not have been obtained, or appropriate conclusions may not have been reached, the auditor must demonstrate that all those things were done with respect to relevant financial statement assertions via persuasive evidence. o    If the problem is lack of documentation, then documentation must be provided.
N/A, but should we encounter this issue we will comply	In terms of documentation of risk assessment procedures and responses to risks of misstatement, the following must be included o    summary of identified risks of misstatement and the auditor's assessment of risks of material misstatement o    and the auditor's responses to the risks of material misstatement

Documentation of Specific Matters
The main ideas of documentation of specific matters are:

Have we complied?	Documentation of Specific Matters
Yes	Documentation of auditing procedures that involve the inspection of documents or confirmation, including tests of details, tests of operating effectiveness of controls, and walkthroughs, should include identification of the items inspected. Documentation of auditing procedures related to the inspection of significant contracts or agreements should include abstracts or copies of the documents.
N/A, we are not auditing such matters but should we encounter this issue we will comply	Certain matters, such as auditor independence, staff training and proficiency and client acceptance and retention, may be documented in a central repository for the public accounting firm ("firm") or in the particular office participating in the engagement.
N/A, but should we encounter this issue we will comply	The auditor must document significant findings or issues* actions taken to address them (including additional evidence obtained), and the basis for the conclusions reached in connection with each engagement. *More information on what significant findings or issues are available on PCAOB website.
N/A, but should we encounter this issue we will comply	The auditor must identify all significant findings or issues in an engagement completion document which must be as specific as possible for the reviewer to be able to understand the significant findings or issues.

Retention of and Subsequent Changes to Audit Documentation

This section of AS No. 3 is irrelevant to us at this time as it pertains to retention of documentation and procedures for any changes made. We have not yet finished our audit but we do intend to keep copies of our documentation and follow the correct procedures in making any changes if necessary.


The following is a summarized outline of the "Retention of and Subsequent Changes to Audit Documentation" section of AS No. 3 found on the PCAOB site.

1. The auditor must retain audit documentation for seven years from the date

• the auditor grants permission to use the auditor's report in connection with the issuance of the company's financial statements
• that fieldwork was substantially completed is a report is not issued.
• the engagement ceased id the engagement was not completed

2. A final set of audit documentation should be assembled for retention as of a date not more than 45 days after the report release date.

• not 45 days from the date fieldwork was substantially completed if a report is not issued
• not be more than 45 days from the date the engagement ceased if the engagement was not completed

3. Audit documentation must not be deleted or discarded after the documentation completion date. Instead, information may be added and such information must have the date added, the name of the person who added it, and why the information was added.

References:http://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_3.aspx