Audit Documentation & Evidence Glossary

Audit Documentation

Audit documentation refers to the written records that provide evidence of audit procedures performed, results obtained, and conclusions reached. It supports the auditor’s opinion, demonstrates compliance with auditing standards, and enables regulatory inspections and quality reviews in the UAE.

Audit Evidence

Audit evidence includes all information used by auditors to arrive at audit conclusions. It consists of accounting records, supporting documents, confirmations, observations, and analytical results that help verify the accuracy and completeness of financial statements.

Working Papers

Working papers are detailed records prepared by auditors documenting audit planning, procedures, evidence, and conclusions. They provide a clear audit trail and support the auditor’s professional judgment and final audit opinion.

Audit Trail

An audit trail is a step-by-step record that traces financial transactions from their origin to final reporting. It allows auditors to verify accuracy, detect errors, and ensure transparency and accountability.

Audit File

An audit file is a structured collection of audit documentation, including planning papers, working papers, evidence, and reports. It must be properly maintained for regulatory review and future reference.

Permanent Audit File

The permanent audit file contains long-term information such as company background, legal documents, accounting policies, and internal control descriptions. It is updated periodically and reused in subsequent audits.

Current Audit File

The current audit file includes documentation related to a specific audit period, such as trial balances, audit programs, evidence obtained, and conclusions for that financial year.

Audit Program

An audit program is a detailed list of audit procedures to be performed. It guides auditors during fieldwork and ensures systematic collection of sufficient and appropriate audit evidence.

Audit Planning Documentation

Audit planning documentation records the auditor’s understanding of the business, risk assessment, materiality decisions, and overall audit strategy. It demonstrates compliance with International Standards on Auditing (ISA).

Risk Assessment Documentation

Risk assessment documentation records identified financial and compliance risks, their significance, and planned audit responses. It helps auditors focus on areas with higher risk of material misstatement.

Materiality Documentation

Materiality documentation explains how materiality thresholds were determined and applied. It supports audit judgments regarding the significance of misstatements and evaluation of audit findings.

Internal Control Documentation

Internal control documentation describes systems and procedures designed to prevent errors and fraud. Auditors rely on this documentation to assess control effectiveness and plan audit testing.

Control Testing Evidence

Control testing evidence includes records supporting the evaluation of internal controls. It demonstrates whether controls are designed and operating effectively throughout the audit period.

Substantive Testing Evidence

Substantive testing evidence results from detailed tests of transactions and balances. It provides direct assurance about the accuracy and completeness of financial statement amounts.

Audit Sampling Documentation

Audit sampling documentation records sampling methods, sample sizes, selection criteria, and results. It supports conclusions drawn from testing less than the full population.

Analytical Procedures Documentation

This documentation records ratio analysis, trend analysis, and comparisons used to identify unusual fluctuations or relationships that may indicate misstatements.

Confirmation Evidence

Confirmation evidence consists of written responses from third parties, such as banks, customers, or suppliers, verifying balances or transactions. It is considered highly reliable audit evidence.

Bank Confirmation

Bank confirmation is external evidence obtained directly from banks confirming account balances, loans, guarantees, and other banking arrangements of the audited entity.

Receivable Confirmation

Receivable confirmations verify balances owed by customers. Auditors use them to confirm existence, accuracy, and collectability of accounts receivable.

Payable Confirmation

Payable confirmations confirm amounts owed to suppliers. They help auditors ensure completeness and accuracy of recorded liabilities.

Physical Verification Evidence

Physical verification evidence is obtained through direct observation or inspection of assets such as inventory or fixed assets. It confirms existence and condition.

Evidence Audit Evidence

Audit evidence includes records and confirmations used to support audit conclusions.

Sufficiency of Evidence

Sufficiency refers to the quantity of evidence obtained to support audit opinions.

Appropriateness of Evidence

Appropriateness refers to the relevance and reliability of audit evidence.

Substantive Procedures

Substantive procedures test transactions and balances to detect material misstatements.

Test of Controls

Tests of controls evaluate the effectiveness of internal controls during audit execution.

Audit Sampling

Audit sampling examines selected transactions to draw conclusions about the entire population.

Sampling Risk

Sampling risk arises when conclusions differ from those using full population testing.

Analytical Procedures

Analytical procedures analyze financial trends and relationships to identify unusual patterns.

Preliminary Analytical Review

This review helps identify risk areas during audit planning.

Audit Fieldwork

Audit fieldwork is the execution phase where testing and evidence collection occur.

Substantive Testing

Substantive testing verifies accuracy of account balances and transactions.

Control Testing

Control testing assesses whether controls operate effectively throughout the period.

Audit Assertions

Audit assertions are management claims about financial statement accuracy.

Existence Assertion

Existence ensures assets and liabilities recorded actually exist.

Completeness Assertion

Completeness ensures all transactions and balances are recorded.

Accuracy Assertion

Accuracy ensures amounts are recorded correctly.

Valuation Assertion

Valuation ensures assets and liabilities are measured appropriately.

Cut-Off Testing

Cut-off testing verifies transactions are recorded in the correct accounting period.

Revenue Testing

Revenue testing ensures compliance with IFRS revenue recognition principles.

Expense Testing

Expense testing verifies legitimacy and proper classification of expenses.

Asset Verification

Asset verification confirms existence, ownership, and valuation of assets.

Inventory Observation

Inventory observation involves physical inspection of inventory quantities.

Bank Confirmation

Bank confirmations verify cash balances and loan obligations.

Debtors Confirmation

Debtors confirmation validates accounts receivable balances.

Creditors Confirmation

Creditors confirmation ensures completeness of liabilities.

Related Party Testing

Related party testing ensures transparency and proper disclosure.

Fraud Risk Assessment

Fraud risk assessment evaluates susceptibility to fraudulent activities.

Management Override Risk

This risk involves management bypassing controls to manipulate results.

Going Concern Assessment

Going concern assessment evaluates the entity’s ability to continue operations.

Subsequent Events Review

This review identifies events after year-end affecting financial statements.

Audit Adjustments

Audit adjustments correct identified misstatements.

Unadjusted Misstatements

These are misstatements not corrected due to immateriality.

Audit Findings

Audit findings highlight issues identified during execution.

Audit Issues Resolution

This process involves discussing and resolving findings with management.

Management Representation Letter

This letter confirms management’s responsibility and disclosures.

Audit Review

Audit review evaluates whether procedures and conclusions are appropriate.

Engagement Quality Control Review

This review ensures audit quality before report issuance.

Audit Completion

Audit completion involves finalizing documentation and conclusions.

Audit Opinion Formation

Opinion formation determines the appropriate audit opinion.

Audit Reporting

Audit reporting communicates audit results through a formal report.

Unqualified Opinion

An unqualified opinion indicates clean financial statements.

Qualified Opinion

A qualified opinion highlights specific material issues.

Adverse Opinion

An adverse opinion indicates pervasive misstatements.

Disclaimer of Opinion

A disclaimer indicates insufficient audit evidence.

Emphasis of Matter

This paragraph highlights significant disclosed matters.

Other Matter Paragraph

This paragraph provides additional relevant information.

Regulatory Compliance Review

This review ensures adherence to UAE audit laws.

Audit Transparency

Audit transparency enhances stakeholder confidence.

Audit Accountability

Audit accountability ensures responsibility for conclusions.

Audit Quality

Audit quality reflects adherence to standards and ethical conduct.

Quality Control Procedures

These procedures ensure consistency and compliance in audits.

Ethical Compliance

Ethical compliance ensures adherence to professional conduct standards.

Auditor Independence

Independence ensures unbiased audit judgments.

Audit Governance

Audit governance provides oversight and accountability.

Continuous Audit Improvement

Continuous improvement enhances audit efficiency and quality.

Audit Technology

Audit technology uses digital tools to improve audit execution.

Data Analytics in Audit

Data analytics enhance risk identification and testing accuracy.

Audit Automation

Audit automation streamlines repetitive audit procedures.

Audit Efficiency

Audit efficiency optimizes resources without compromising quality.

Audit Effectiveness

Audit effectiveness ensures objectives are achieved.

Compliance with ISA

Compliance with ISA ensures international audit consistency.

UAE Audit Regulations

Compliance with ISA ensures international audit consistency.

Free Zone Audit Planning

Free Zone audit planning aligns with authority-specific requirements.

Audit Readiness

Audit readiness ensures records and controls are prepared.

Pre-Audit Assessment

A pre-audit assessment identifies readiness gaps.

Continuous Monitoring

A pre-audit assessment identifies readiness gaps.