Auditors maintain a permanent audit file to organize and store source documents relevant to future audits.
In other words, this file contains documents to be used in the subsequent audit of financial statements. For instance, it contains a long-term loan agreement, leasing agreements, certificate of incorporation, long-term contracts, pension plans, fixed assets details, accounting policies, important business information, prior-year financial information, tax information, and details of major transactions like mergers, acquisitions, and debentures etc.
Purpose of the permanent audit file
The basic purpose of this file is to keep organized and sorted financial information that is relevant for the multi-year financial audit. This file is a reference point for the financial information in the subsequent audit.
Wrap up
Auditors maintain a this audit file to keep a sorted and organized financial record relevant to an audit of multiple-year. The primary purpose of this file is to easily access and store documents relevant to audits of multiple years.
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