1. Why should I use ADOC?
The Audit Documentation Content (ADOC), represents the core content created by True and Fair which serves as the base for the yet to be launched Audit Documentation and Archival Tool (ADAT). Based on feedback consistently received from various audit firms wherein they have expressed an interest to use this content pending the launch of A DAT.
ADOC currently provides an exhaustive library of all the content within a detailed Index, so as too facilitate auditors to plan a comprehensive audit of the Financial Statements including reporting. The content is based currently on the Ind AS framework and in accordance with the Indian Auditing Standards, with the said reference content being in the form of MS Excel templates, which are easy to use and update
ADOC can be used by the audit firms for performing, documenting and archiving their audit engagements as well as be used as a reference library when audit is performed using other documentation tools or outside of the ADOC environment.
Advantages of using ADOC
Easy to use and provides on the job training
Standardized and exhaustive document templates leading to consistency in the performance of audits
Minimizing Partner / Manager review time
Investment made in Year 1 of using ADOC can be significantly leveraged when performing audits for the subsequent years
ADOC includes sampling templates for sampling based on monetary units and sampling on random basise
The Trial Balance feature enables the auditor to match the grouped amounts in the Trial Balance with the Financial Statements
Comprehensive library of checklists to facilitate auditors meet the reporting requirements under the Companies Act
Salient Features of ADOC
Guiding questions to enable the auditors to seek and obtain relevant information for performing the audit
Exhaustive library of risks, controls, IUC’s and IPE’s for each Financial Statement Note or Financial Statement Line
Exhaustive library of risks and controls for performing audit of the IT environment
Template for testing “Design and Implementation” and “Operating Effectiveness” of controls
Exhaustive library of content for performing group audit
Comprehensive workpapers for testing cash flows, going concern and subsequent events
Security and confidentiality
ADOC leverages on the security features inbuilt in Microsoft Azure cloud and SharePoint environment. The ADOC environment is also being subjected to an independent security audit covering confidentiality, integrity and availability principles inter-alia to assure the audit firms that True and Fair will not have direct access to the information contained in the audit files that are hosted in ADOC.
2. What if we use ADOC for one year and do not renew for the next year?
The option to discontinue the ADOC is available with the audit firms. However, we do not encourage audit firms to discontinue the use of ADOC as the audit files already archived by using ADOC will not be functional without the ADOC tool. In a scenario wherein the audit firm decides to discontinue the ADOC, there are two options available with the audit firms with respect to the audit files archived / in progress using ADOC:
Retain the audit files in the ADOC tool by paying a yearly maintenance fees per audit file which will allow audit firms to access the stored audit file. Or True and Fair will provide the readable version of all the documents in the audit file by paying one-time fee per audit file.
3. Will ADOC carry any tools for sampling including analytics?
Sampling including analytics tools will be developed by True and Fair. It is still not decided on offering the same along with ADOC since the type of tool to be used in an engagement will vary based on the accounting application used by the audit client. It is likely that these tools will be made available separately on a separate subscription.
4. Will ADOC be available on mobile?
The current version of ADOC will not be accessible on mobile.
5. When do you expect to launch ADOC?
True and Fair is expecting ADOC to be launched by May 2023.
6. What standard formats and templates of communications and reports will be included within ADOC (e.g., Engagement Letter, Confirmations, Audit Report, etc.)
The standard formats and templates of communications and reports will be part of the Technical Library provided by True and Fair Professionals Network, which would not be made available as part of ADOC. Such templates will be available on subscription basis (it’s a separate subscription than that of ADOC). The following formats (illustrative) would be part of the Technical Library.
Document for evaluation of the client- Know Your Client (KYC)
Request for ‘No Objection Certificate’ (NOC) from predecessor auditor
Communication of resignation / intent to resign
Declaration of independence
Understanding joint auditors and joint audit plan
Communication with Management and TCWG including communication of audit plan
Format of external confirmations pertaining to:
Property, plant and equipment with third parties
Investments- details of holdings, terms, net asset value, etc.
Advances (including capital advances)
Inventory with third parties
Bank balances (including deposits)
Terms of contracts
Legal and compliance
Management representation letter (standalone and consolidated)
Communication with those charged with governance (TCWG) - Audit conclusion and reporting
Audit reports, including reporting on Internal Controls over Financial Reporting (IFCoFR) and Companies (Auditor’s Report) Order (‘CARO’) 2020 (standalone and consolidated)
Minutes of discussion with the joint auditors - during the execution of the audit - significant matters
Referral instructions to component auditors
Note -the above lists are not exhaustive and only illustrative.
7. Can I collate the audit observations and recommendations to the client in a template?
All the audit observations and recommendations need to be manually collated from the respective testing working papers in ADOC. In the current version of ADOC, this feature is not available. This is planned to be included in the next version of ADOC.
8. Is practice management integrated with ADOC?
No, practice management is not integrated within ADOC. We will evaluate the plan to integrate practice management with ADAT only post March 2024.
9. Who all will have access to the audit file?
True and Fair will add users to the audit file in ADOC based on the request sent by the audit firm. Only the users assigned to the respective audit file in the ADOC will have access to the respective engagement file depending on the roles and restrictions assigned. The audit firm can also ask True and Fair to provide “view only” rights to the users added to the audit file.
10. Will True and Fair have access to the audit file?
The True and Fair will not have any access to the audit files. As mentioned earlier, only the users assigned to the respective audit file in the ADOC will have access to the respective engagement file.
True and Fair will seek prior consent of the Audit Firm to access the metadata in an audit file without identification of the client or the audit engagement in order to develop AI programmes and solutions based on the historical experiences in the audit in such engagements.
11. Can ADOC integrate with the accounting application of the client?
In the current version of ADOC, this feature is not available. We will evaluate this in the next version of ADAT in a phased manner.
12. What if I run into a problem when using ADOC?
True and Fair will have a dedicated support team to help the users navigate through the problems encountered by them on the technical aspect.
13. Can I transfer audit files which are in the currently in use in other audit documentation tools into ADOC and vice-versa?
No. Users will not be able to transfer the audit files from ADOC to other documentation tools and vice-versa. For transferring the data out of ADOC, True & Fair will provide support to take the print of the documentation or will extract the files in the form of non-editable PDF/ word / excel and share it with the users.
In the scenario of transferring the data into ADOC from other documentation tool, User will have to create the documentation from scratch into ADOC. Any copy paste feature available in the earlier audit tool may be used to update the data into ADOC.
14. What is your expectation of the thinking of the regulators regarding ADOC?
ADOC is developed keeping in the mind all the relevant auditing standards. If ADOC is used in the true spirit and if the procedures are followed as suggested in the tool, the audit is expected to comply with regulators expectation, unless there are any professional judgements that are involved.
True and Fair also intends to share the ADAT tool with the regulators to get their views and feedback to ensure there is no disconnect in terms of procedures to be followed in an audit engagement.
15. What training would be provided to the Audit Firms to use ADOC?
ADOC comes with a detailed written instruction manual and it is easy to use since documents are in excel.
16. Can ADOC generate Schedule III financial statements?
No. ADOC is not an accounting compilation software. It is an audit automation tool. Hence preparation of Financial Statements is not in our scope for the current phase. However, the Trial balance module is available in ADOC linked to the Financial Statements line items in Schedule III.
17. Can I work offline on ADOC?
No, ADOC needs to worked online.
18. What software licenses do I need to have to use ADOC?
Users will need to have Microsoft (Office) 365 licenses.
19. Which are the browsers in which ADOC works?
Microsoft Edge, Chrome, Safari, Firefox.