NFRA Chief Stresses On Audit Documentation

Amid instances of auditing lapses at companies and the regulator taking action against erring auditors, NFRA Chairperson Ajay Bhushan Prasad Pandey on Monday stressed on the need of audit documentation.
     
Basically, the audit documentation is the evidence of the auditor's work supporting the conclusions and opinions given in the audit report.
     
Speaking at a webinar on 'Audit: a pillar of corporate governance', he said that in the interest of auditors, it is important to have good audit documentation.
     
"If you have done the audit documentation then tomorrow you can justify your work. If a certain question arises, then documents are the only thing to back on," Pandey said.
     
He said that a lot could be done to improve audit documentation as improper documentation can put the auditor in difficult situations.
     
Also, the chief of National Financial Reporting Authority (NFRA) emphasised on the good corporate governance practices amid influx of retail investors in the securities market.
     
The auditing watchdog has around 7,000 companies, including unlisted ones, under its purview.
     
NFRA, which is a relatively new organisation, has passed various disciplinary orders in the last one year.
     
"We don't want to be seen just as a disciplinary organisation but as an organisation that is supporting corporate governance, supporting auditing professionals," the NFRA chief said.
     
Last month, Pandey stated that audit documents should provide evidence that due process has been done.
     
Also, he stated that auditors should follow the due process rather than just rely on expert opinions and emphasised that auditing should not be just a "ticking" exercise.