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1174 File Freezing
Apr-2015
Overview
Audits originally planned are sometimes discontinued, cancelled, or postponed.
This section outlines the expectation and guidance for finalizing an audit file of a discontinued, cancelled, or significantly postponed audit on a timely basis.
Audit teams also need to exercise caution when an audit that has not been finalized is subject to litigation.
OAG Policy
The engagement leader shall finalize the audit file of a discontinued, cancelled, or significantly postponed audit within 60 calendar days of the decision to discontinue, postpone, or cancel the audit engagement. [Nov-2011]
OAG Guidance
Freezing an audit file
Normally, finalizing an audit file occurs within 60 calendar days of the date of the assurance engagement report (OAG Audit 1171 Assembly of the final audit file). Circumstances may arise where the audit team is required to close an audit file because of a decision to discontinue, cancel or postpone an audit (normally approved by the Executive Committee) before the completion of the audit (OAG Audit 3011 Acceptance and continuance). These circumstances include
- discontinuing an annual audit before the audit begins, while the audit is under way, or before the report is issued;
- cancelling a performance audit or special examination, where work has already begun; and
- significantly postponing an audit, where work has already begun.
If they conducted audit work and created records, auditors shall close the audit file, so that it is preserved and accessible in the future. In these circumstances, auditors should close the audit file in the audit working paper software without completion or review of the file. The file should be preserved in the state in which it existed when the audit work was stopped. In addition, they should add a note to the audit file explaining why the audit was not completed.
The engagement leader should notify Records Operations that the audit has been discontinued, cancelled or postponed and close the file.
If the audit team becomes aware of litigation regarding an audit that has been discontinued, cancelled or postponed, the engagement leader should consult Legal Services immediately, before closing the audit file. Once the audit team is aware of litigation risks, the audit team should be especially careful in its document retention. Documents received from the entity or generated by the team may be subject to release in the course of the litigation, including during examination for discovery (a stage in litigation where each party is required to give the other party(ies) copies of all the documents in its possession that are relevant to the issues involved in the litigation) (OAG Audit 1192 Confidentiality, safe custody, integrity, accessibility, and retrievability of engagement documentation).