Working Paper Etiquette

April 2008

I once heard etiquette defined as “little courtesies that smooth relationships.” In other words, etiquette keeps us all from slapping each other silly. It smoothes awkward situations and eases your interactions with others. Can you imagine a world where no one apologized when they accidentally step on your foot or hit you with a bag? (I have had both happen today… I am flying and sitting on the aisle).

Clear working paper documentation is audit etiquette. It makes significant audit tasks easier and keeps your audit supervisor and peer reviewer from slapping you silly.
The Yellow Book lists the reasons why working papers are necessary. Just as holding the door for someone with a huge box in their arms is necessary.

7.79 Audit documentation is an essential element of audit quality. The process of preparing and reviewing audit documentation contributes to the quality of an audit. Audit documentation serves to

1) provide the principal support for the auditors' report,

2) aid auditors in conducting and supervising the audit, and

3) allow for the review of audit quality.

Do everything you can to make the reviewer’s life easier
If you have ever reviewed working papers, you know how excruciating the job can be if the creator of the working papers refuses to play nice. Working paper review is—hands down—the worst job on the audit. Just like carrying a huge box is a drag, working paper review is a drag.

If you make this task any harder for your supervisor or reviewer—you are going to raise their ire in a seriously large way. Why would you want to risk annoying them so severely? Don’t you need that paycheck? Open the frigging door!

The most significant thing you can do to smooth the review process: Find out what they want from you

I suggest that you ask your supervisor what they want your working papers to look like. What rules do they want you to follow? And if they are unclear or not sure about what they want, ask them to tell you whose working papers they like. Someone in your office has created working papers that meet their standards—you know who I’m talking about. Did I hear you whisper “The kiss-up!”?

Scrutinize the kiss-up’s working papers to find out what makes them so pleasing to your supervisor and then REPLICATE that! Or, if you really want to show off, improve on what the kiss-up has done. Instead of just holding the door, relieve the box holder of their burden and follow them to their office. How polite is that!?!

If you are a supervisor or manager reading this, please do your staff a favor and tell them what you want them to do. It is only fair that you set clear expectations of what you want to see. Otherwise, you really have no right to complain—although you will complain anyway!

A few more ideas to consider

A few months ago, I asked readers to share their working paper rules with me. Here are two that you may want to consider:

1. Create a standard way to order the working papers

Karen Mayo, CPA of Dippel, Dippel, Jackson & Pugliese, LLC says: "I insist that each set of working papers has a COMPLETE index listing each numbered working paper, in order, by working paper title. Then, when I go to looking for something, I can find it without flipping through the entire set of working papers. Also, we use a standardized set of working paper numbers. For example, 324 is always the engagement letter."

(For more on how audit papers can be organized, see my October 2004 Newsletter.)

Here is a pretty standard hierarchy:

Do you have to do it this way? No! How you organize is a matter left to your professional judgment. In other words, your way is as good as mine.

2. Consistently label each working paper

Edmundo Calderon, CIA, CGAP with Chief Internal Auditor with the City of El Paso says: "Get yourself a self-inking rubber stamp. You can stamp your work papers and have the auditor and reviewer sign off on them. It is a pain but it helps in documenting the review process."

He also suggests that you get yourself a box of mailing labels. You can have the auditors print out a page of labels with:

• Project Name
• Unique Title
• Auditor's Initials
• Date Completed
• A space for page number and reference or other information

Or, if you have the money, you could use an electronic working paper program instead and the program could automatically fill in some of the critical information that Edmundo recommends. The programs to create electronic working papers are pricey, but every auditor I know that uses electronic working papers wouldn’t go back to paper.

Next month: Yes, even more regarding working papers!