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How To Write Audit Tick Marks
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The Most Important Audit Skill And How You Can Learn It In Less Than 10 Minutes

The most important skill you can have as an auditor has nothing to do with crunching numbers or journal entries. Instead, the skill all auditors must master centers around your ability to write, more specifically, your ability to write an audit tick mark.

For auditors, a tick mark is how they document in their work papers the work they have performed and the conclusions they reached. It is how auditors cover their asses during the review and inspection process.

But most new hires have no idea what a tick mark is or how to write one when they come on board. I know I didn’t.

As such, I felt it necessary to give you a crash course on to create one so that you don’t have the total deer-in-the-headlights look on your first engagement as an intern.

First let me show what typical documentation in a tick mark will look like:

X Firm (Insert whatever firm you are working for) obtained from Dan Smith, Assistant Controller, the invoice XYZ Company received from ABC Company for the purchase of the chainsaw. X Firm matched the invoice number, date, and amount with the accounts payable selection. Invoice appears reasonable. Further, X Firm received from Mr. Smith the check stub and bank statement related to the invoice selected.  X confirmed the check was for the invoice selected and noted the date of the check was after 12/31/XX. X Firm matched the check to the January XXXX bank statement as well. As such, X Firm confirms the invoice was paid after 12/31/XX. Appears reasonable that this selection is included in the ending accounts payable balance.

Whoa, there’s a lot to take in there. So let’s break down the key elements of what to include:

  • Note who is performing the testing (X Firm)
  • Note who you received the evidence from and what their title is. You only need to state this once in the tick mark.
  • Document all evidence documents you received.
  • State how you determined that the evidence is reasonable in your mind.
  • Lastly, conclude why or why not you think your selection is reasonable.

Now the example I have given you is useful for documenting basic testing you have performed in your audit workpapers. But a tick mark can be used to document a myriad of different things including:

  • How you arrived at the number of selections for this audit test
  • What the definition of an item is
  • A conversation you had with a client (don’t let this be your only evidence)
  • The description of an internal control
  • What the threshold of error is for your audit engagement.

I could go on and on but I will stop there and let you discover more ways to use tick marks in your own work.

Ultimately, the best thing to keep in mind when writing tickmarks is to think about the people who will be reviewing them.

  • Can they re-perform the exact steps you took?
  • Do they understand why you did what you did?
  • Do they understand and agree with your conclusion?

If not, then go back and revise the tick mark until you can answer yes to these questions.

In the end, if you get stuck, do not be afraid to ask your senior or other staffers. They were once in your shoes and realize how difficult it can be to write a tick mark.

Russell

About Russell


Hi, I'm Russell, author of The Big 4 Playbook and a Certified Public Accountant (CPA) in Texas.

Before writing The Big 4 Playbook, I had the privilege of working as an auditor and tax consultant for several years for a Big 4 Accounting Firm. I am one of the few CPAs to serve as both an audit senior and a tax senior for a Big 4 Firm. During my time at the Big 4, the clients I served included Fortune 500 and Fortune 1000 companies, government organizations, hedge funds, and more.

I earned my Bachelor of Science in Accounting from Boston College and my Masters in Accounting from Vanderbilt University. I experienced the rigors of the Big 4 recruiting process at both levels of my college career, and I created The Big 4 Playbook to share the lessons I learned along the way with you.
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How To Write Audit Tick Marks

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