The preparation of working papers is an integral part of a PA’s audit of financial statements. On a recurring engagement, PAs review their audit programs and working papers from their prior audit while planning the current audit to determine usefulness for the current-year work.

Required:
a. (1) What are the purposes or functions of audit working papers?
(2) What records may be included in audit working papers?
b. What factors affect the PA’s judgment of the type and content of the working papers for a particular engagement?
c. To comply with generally accepted auditing standards, a PA includes certain evidence in his or her working papers; for example, “evidence that the audit was planned and work of assistants was supervised and reviewed.” What other evidence should a PA include in audit working papers to comply with generally accepted auditing standards?
d. How can a PA make the most effective use of the preceding year’s audit programs in a recurring audit?