ACCA Audit and Assurance (F8) Practice Exam

What type of information is contained in Permanent audit files?

1. Current year's engagement details

2. Documents of continuing importance

3. Substantive testing results

4. Interim audit findings

The correct answer is: Documents of continuing importance

Permanent audit files are designed to house documents and records that are of ongoing significance for the audit process. These files typically contain foundational information about the client that remains relevant across multiple audit periods. Examples include the client's articles of incorporation, bylaws, contracts, and prior years' financial statements. This continuity allows auditors to have a comprehensive understanding of the client’s operations, accounting policies, and financial history, which is crucial for conducting effective audits each year. The nature of permanent files emphasizes the importance of retaining essential documentation that supports the audit over time, as opposed to information that is more transient or specific to a particular period. Thus, the contents of permanent audit files serve as a valuable resource for both current and future audits, enabling auditors to build upon their understanding of the client. Other options, while relevant to the overall audit process, pertain to more temporary or specific aspects of an audit engagement. Current year's engagement details, substantive testing results, and interim audit findings are all related to the current audit period and do not share the same ongoing relevance as the information maintained in permanent files.