Frequently Asked Questions
The permanent audit file contains information and documents of a constant or long-term nature that are used for several financial periods (e.g., articles of association, long-term contracts, organizational structure). In contrast, the current audit file contains information and evidence related to a specific financial period used to support the auditor's opinion for that period (e.g., financial statements, trial balance, bank confirmations).
Maintaining this file helps enhance the auditor's understanding of the client, improve audit efficiency by reducing repetitive tasks, facilitate more accurate risk assessment, increase audit quality, and ensure compliance with professional standards and legal requirements. It serves as an organizational memory and permanent reference.
Documents such as the company's articles of association and amendments, organizational chart, list of key managers and shareholders, accounting policies and internal control systems, long-term contracts (loan, lease, sales), prior year audit reports and management letters, and key tax and legal information are typically kept in the permanent audit file.
For effective updating, clear responsibility for file maintenance should be assigned. Regular review scheduling (at least annually), precise documentation of any changes (including date and reason), and utilizing electronic document management systems for ease of updating and tracking changes are best practices. Obsolete information should also be removed and new information added.
A digital permanent audit file offers numerous advantages, including easy and quick access from anywhere, improved security through encryption and backups, reduced need for physical space, advanced search capabilities, easier updating and sharing of information, and environmental benefits by reducing paper consumption.
