Audit tick marks are supportive tools for auditors that help them define their auditing opinions about the financial statements they review.
These tick marks can be symbols or abbreviated notations. They can be defined differently by auditing teams in different regions.
Let’s go through the details and find out what are audit tick marks, how are they used, and what are the best practices to use them effectively.
Audit tick marks are symbols or notations denoting certain auditing actions performed by internal or external auditors.
When auditors go through audit working papers, they create different types of symbols, notations, and footnotes. All of these symbols and notations then define actions or steps taken by auditors.
During the review of financial statements or any other type of auditing work, auditors undertake structural steps and use annotations to describe those steps.
These symbols and abbreviated notations are also used as evidence by auditors that certain actions have been performed.
It means tick marks can be used as auditing logs too. Auditors can then review and match the required steps to complete an audit review of a financial statement.
Tick marks have different purposes in auditing work. These can be used as annotations, reference marks, explanatory marks, etc.
The first use of tick marks is to define an audit step. An auditor can use a specific mark to describe an action. For example, a question mark can be used to denote an auditor requires proof or further explanation of a line item in a statement.
Secondly, auditing work follows a formal structure where all team members must ensure accuracy and efficiency.
Tick marks help in describing the workflow and following the audit structure. Auditors can avoid duplication, misinterpretations, and avoid inefficiencies.
The auditing team can use tick marks as references to guide each other and ensure consistency. They can improve communication and follow the formal guides.
Finally, audit tick marks can be used to define certain figures or actions undertaken in a financial statement.
For example, if an additional column was added on the request of an auditor to define certain figures or calculations, it can be tick-marked and explained in a cross-foot note.
In short, tick marks can be helpful for both auditors and managers by defining certain actions being performed by either side.
Auditors can define and use different symbols as audit tick marks. The idea behind the practice is to remain consistent with these definitions throughout the auditing work.
Here are some commonly used audit tick mark types.
Check Mark (✔)
Like its common use, the check mark denotes the completion of a task. Auditors use it to describe a completed task or action.
It can also be used to show that a part of a financial statement has been checked or verified by an auditor.
Its simplest use is to show the correctness of the figures/facts shown in a statement.
Cross Mark (X)
A common use of the cross mark is to invalidate a piece of information or a figure given in a financial statement.
It is also widely used where information is missing or incomplete. Auditors use the cross (x) mark when they need more information usually.
Sometimes a statement, a line item in a financial statement, or a figure requires some further explanation. Auditors use the asterisk mark to create footnotes and provide additional information.
It can also be used to provide definitions of certain items or provide references to special words used in an audit document.
Question Mark (?)
Although the use of question marks as tick marks is not common, they can be used by auditors in some situations.
A question mark used as a tick mark would mean an auditor requires further explanation, evidence, or a piece of missing information.
Triangle Mark (△)
A triangle mark is used where auditors feel an additional explanation is necessary for specific figures or terms used in a statement.
It can also be used when an exceptional or uncommon use of a term is found in financial statements.
Auditors can define several other types of tick marks depending on their practices and how they define them.
Let’s discuss some common use examples of audit tick marks.
A Question Mark (?) or Q
An auditor uses the letter Q or the symbol “?” when they see incomplete information that requires further explanation.
The providers of the information will then satisfy auditors by offering further explanation, evidence, and clarification.
Similarly, auditors may use a question mark to denote unusual figures or risk points in financial statements.
A Check Mark
Denoted by the symbol “✔” or abbreviation “CM”, this tick mark is commonly used to make assertions by auditors.
It is commonly used to show satisfaction or mark the completion of information provided in financial statements.
For example, internal auditors use checkmarks to verify steps in a procedure being performed as defined by the management.
A Cross Mark (X) or NP
The abbreviation “NP” stands for “Not Provided”. Auditors use the cross mark for the same purpose as well.
This tick mark is used when auditors nullify a statement or require missing information.
Apart from these common examples, auditors use these special characters as audit tick marks to denote specific actions.
Every auditing team can define the best practices to create and follow audit tick marks. The main challenge is to achieve consistency and improve efficiency in the audit work.
Define and Document Tick Marks
The first step is to define audit tick marks. It’s important to document the definitions, uses, and explanations of these tick marks.
This list of defined tick marks should be available to all audit team members.
Stay Consistent in the Use of Tick Marks
Once defined, the key is to use these tick marks consistently. It means one tick mark defined for a specific purpose should be used across the auditing papers for the same purpose by all team members.
Communicate Vital Information with the Team
A key aspect of achieving consistency is to communicate vital information with the audit team.
For example, any updates to the tick mark list or redefined purposes must be communicated to ensure consistency.
Review and Update Regularly
Finally, an audit team should regularly review and update the tick mark list. It helps newcomers to stay informed and perform consistent actions.
When done properly, audit tick marks can be useful for all team members of the auditing function.
The Dos of audit tick marks include:
- Define audit tick marks and communicate them internally as well as externally to the management of the firm being audited.
- Ensure the consistent use of tick marks across financial statements.
- Define and elaborate tick marks to the management as well as audit team members.
- Provide a written copy of the tick mark list to all stakeholders involved in the auditing work.
The Don’ts of audit tick marks include:
- Review the previously used tick marks and try to follow the same ones for consistency. Do not mix tick marks.
- Do not complicate the use of tick marks and thoroughly review the use of tick marks by defining them clearly for everyone.
- Do not communicate the list of tick marks verbally. Also, make sure any upgrades or changes to the definitions of tick marks are communicated throughout the auditing function.
The use of audit tick marks is vanishing as modern audit work is seldom being performed on paper these days.
However, audit tick marks are still in use in the digital format. Auditors use the same types of tick marks for digital auditing processes through audit software and even common applications like MS Excel.