auditqualitymatters 

A cold file review is an appraisal of an audit file after the audit report has been issued. The objective of this review is to identify any issues of non compliance which may also be reflected in other audit files. Deficiencies noted should be addressed immediately and brought to the attention of staff.

Cold file reviews focus on the extent of documentation found on audit file, the appropriateness of the audit report issued and the presentation of financial statement requirements, amongst others. Cold file reviews should also be carried out as part of the Annual Compliance Review.

Compass approach

A cold file review includes:

• The review of one file selected by the auditor to identify methods for improvement on completed audit engagements.
• The review of financial statements to ensure compliance with IFRS.
• The involvement of the auditor by expressing his views on the issues raised.
• A presentation of the findings at the end of the review.
• A report recommending agreed courses of action for improvements.
• Suggested manuals, checklists and appropriate audit programmes that may be introduced at the practice (at an extra charge if the implementation of these tools is onerous).

^{Renzo Farrugia is recognised by the Malta Institute of Accountants to provide audit support services.}