The ICPAK guideline states that the use of standardized working papers may improve the efficiency with which they are prepared and reviewed. Used properly they help to instruct audit staff and facilitate the delegation of work while providing a means to control its quality.

However, despite the advantages of standardising the routine documentation of the audit (e.g. checklists, specimen letters, standard organization of the working papers) it is never appropriate to follow mechanically a `standard' approach to the conduct and documentation of the audit without regard to the need to exercise professional judgement.

On balance, there should be a degree of standardization of working papers and practically all firms recognise this need. Finally, it should be noted that working papers are the property of the auditor and he should adopt procedures to ensure their safe custody and confidentiality—leaving them on the bus or matatu should therefore be avoided.

Examining Identified Related Party Transactions

In examining the identified related party transactions, the auditor should obtain sufficient appropriate audit evidence as to whether these transactions have been properly recorded and disclosed.

Management Representations

The auditor should obtain a written representation from management concerning:

  1. The completeness of information provided regarding the identification of related parties; and
  2. The adequacy of related party disclosures in the financial statements.

Audit Conclusions and Reporting

If the auditor is unable to obtain sufficient appropriate audit evidence concerning related parties and transactions with such parties or concludes that their disclosure in the financial statements is not adequate, the auditor should modify the auditor’s report appropriately.