Audit Notebook

Definition. An Audit Notebook is a diary or register maintained by the audit staff (typically the audit assistants/clerks) during the course of an audit, in which they record their day-to-day observations, queries, points needing clarification, and matters they consider significant while examining the accounts.

Contents. A typical Audit Notebook records:

• A brief description of the nature of the business and its organisation.
• The audit programme applicable, and the extent of work completed on each date.
• A list of books of account maintained by the client, and the names/duties of officials.
• Errors and discrepancies discovered during checking, and how they were resolved.
• Points requiring further explanation from the client, and the client's responses.
• Missing vouchers or documents, and follow-up notes on them.
• Extracts from minutes, agreements, or correspondence that are relevant to the accounts.
• Calculations, totals, or workings the assistant needs to remember for later reference.
• Matters the assistant considers should be brought to the auditor's attention for the final audit report.

Advantages:

1. It provides evidence of the work actually done by each assistant, day by day.
2. It helps the senior auditor prepare the final audit report, since queries and points needing attention are already recorded systematically rather than relying on memory.
3. It is a useful reference for future audits of the same client, since recurring issues and the business's peculiarities are already documented.
4. It fixes responsibility — since entries are typically dated and often initialled, it is possible to identify which assistant checked which area.
5. It can serve as evidence in a court of law or before a disciplinary body, if the auditor's work is ever questioned.
6. It helps the senior auditor or partner supervise and review the work of junior staff more effectively. …