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Documentation under GST Audit

Documentation under GST Audit

Documentation under GST Audit

Audit documentation refers to the written record or electronic record prepared during the course of an audit, which acts as the proof of performance of the audit and safeguards the auditor at the time of the dispute. Besides, documents are the keys to determine the trail of any transaction, and it plays a pivotal role in all audits under the GST law. Therefore, audit documentation is the documents that are obtained as evidence during the conduct of GST Compliance audit. In this article, we look at the Documentation under GST Audit in detail.

Also, read about GST Audit & Certifications – By Chartered Accountants. 

Purpose of GST Audit Documentation

The purpose of GST audit documentation are as follows:

  • To prove that the audit was planned and performed in accordance with the standards of auditing.
  • To assist the engagement team in planning and performing the GST audit effectively.
  • To act as the evidence for the auditors to confirm that the overall objectives set by the auditors are satisfied.
  • To facilitate the engagement team to be accountable and responsible for work.
  • To enable reporting partner to ensure all planned work has been completed adequately.
  • To assist in planning and control future audits.
  • To encourage a methodical approach.
  • To enable external inspections, reviews in accordance with pertinent legal, regulatory or other requirements.
  • To preserve the records of matters which are significant for the continuance of future audits.

Coverage of GST Audit Documentation

The below following are the documents necessary for the GST audit documentation:

  • Offer letter which includes the scope and objectives of auditor and management.
  • Engagement and appointment letter.
  • Audit plan and Audit programme.
  • Detailed audit checklist for GST audit or GSTR 9C.
  • Copies of invoices, agreements, etc.
  • Copy of written representation letters obtained from management.
  • Copy of GST return, details of tax paid and credit availed, sales made etc.
  • The important matters that are identified during the audit and deficiencies in internal controls which are communicated to management.
  • The risk assessment procedure applied for areas of high risk and areas of low risk is to be noted.
  • Sufficient and appropriate audit evidence obtained during the audit.
  • All working papers in the electronic form such as Excel, CSV, PDF, JPEG, JSON etc.

Content of Audit Working Papers

The important contents of GST audit working papers include as follows:

  • Name of the client, audit methodology and tools used, sources of data, the period covered by the audit.
  • Detailed observations with important aspects such as amount, date, document references and remarks
  • Signatures of members of staff who prepared the date and working paper.
  • Signatures of the reviewer, partner and date reviewed etc.

Types of Audit files to be maintained

For recurring audits, the working papers would be separated by the GST auditor into:

Permanent Audit file

  • Engagement letters
  • Organizational structure of the company
  • Important documents such as MOA, AOA, minutes etc.,
  • Previous year Audited Financials & GSTR 9 & 9Cs.
  • MRL provided by the management & ICQs.
  • Ratio analysis and trend analysis etc.

Current Audit file

  • Offer and Acceptance letters
  • Audit plan and Audit programme and Checklist
  • Analytical review procedures performed during the audit
  • Reconciliation statement between books of accounts and annual returns
  • Communications made with other auditors, expert and third parties
  • Review notes and representations etc.

To know about GST Accounts and Records Maintenance Procedure click here

Ownership of Audit Documentation

GST Audit documentation is the property of the auditor. The auditor would make copies of the audit documentation available to the entity by providing such disclosure does not ruin the independence or the validity of the audit process.

To know more about GST Audit – By Tax Authorities & Special Audit click here