A note book which is prepared by the audit staff to note down all the uncleared queries which s/he may find in the course of the audit and requires further clarification and explanation is known as an audit note book. It is a register maintained by the audit staff to record important points observed, errors, doubtful queries, explanations and clarifications to be received from the clients. It helps the auditor in his subsequent audits. It should be maintained clearly, completely and systematically. It is a complete record of doubts and their clarification. It also acts as a valuable guide for conducting an audit for future years.
Audit note book contains information regarding day-to-day work performed by the audit staff on any particular date. It can provide a complete picture of the business matters. It serves as authentic evidence in support of work done to protect the auditor against any legal charge initiated against him for negligence. Notes about all types of errors, difficulties and uncleared queries or points to be discussed with the auditor or clients and the points which are to be incorporated in the report are noted down. This book is sometimes called Memoranda Book. It may be a bound or loose-leaf book.
- Audit note book shall be taken as reliable evidence even by the Court of law in case of dispute or if the auditor is charged with negligence.
- It is useful for drawing the audit programs. It also enables an auditor to know that what works his assistant at each audit has done.
Contents of Audit Note Book:
- List of the books of accounts maintained by the client.
- A copy of the audit program.
- The name of the clients and audit year.
- A list of books of accounts.
- Name of principal officers, their duties and responsibilities.
- Date of commencement and the completion of the audit.