Audit File

Definition. An Audit File is the physical folder, binder, or electronic repository in which all the working papers relating to a particular audit engagement are organised and stored.

Types. Auditors conventionally maintain two types of audit files for each recurring client:

1. Permanent Audit File — contains information of continuing importance across multiple years' audits, so it does not need to be recreated every year. Typical contents: the Memorandum and Articles of Association (or Partnership Deed), a history and description of the business, an organisation chart, a note on the accounting policies followed, copies of important long-term agreements/contracts, and copies of previous years' audited financial statements.
2. Current Audit File — contains information relevant only to the current year's audit. Typical contents: correspondence for the current year, the current year's trial balance and financial statements, the audit programme prepared for the current year, minutes of meetings held during the year that are relevant to the accounts, management representation letters obtained for the current year, and points to be raised in the current year's audit report.