Ownership and Custody of Working Papers
Working papers are those papers that contain essential facts about accounts so that the auditor may not have again to go over the accounts of his clients in case he wants to refer to them later on during the course of his audit. The working papers are the matters documented by the auditor, and some states have statutes that assign the auditor as the holder of the working papers. The auditor’s privileges of ownership, however, are subject to moral limitations relating to the classified relationships with clients. Ensure safe custody and secrecy of his working papers.
Working papers belong to the auditor. The auditor’s ownership rights, however, are subject to constraints imposed by the auditor’s own profession. Rule 301 of the AICPA’S Code of Professional Conduct stipulates that a CPA shall not disclose any confidential information obtained during the course of professional engagement, without the consent of the client, except for certain circumstances as stated in the rule.
Custody of the working papers rests with the auditor and he or she is responsible for their safekeeping. Working papers include in the permanent file are retained indefinitely. Current working papers should be retained for as long as they are useful to the auditor in servicing a client or are needed to satisfy legal requirements for record retention. The statute of limitations rarely extends beyond 6 years.
Working papers are the property of the auditor and he might, at his judgment, make portions of or extracts from his working papers to his client. Certain of the auditor’s working papers might sometimes serve as a helpful orientation source for his customer, but the working papers should not be regarded as a division of, or an alternative form, the client’s accounting records. Although the client might assert them as a record of his business matters, the auditor cannot division with them as his conclusions are based on them and as they present confirmation of the audit work carried out according to the essential principles. The auditor should accept sensible actions for the safe supervision of his working papers and should maintain them for a time enough to meet the needs of his observations and to persuade any pertinent legal requirements of records preservation.
