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With the advent of quality management standards, such as the International Standard on Quality Management 1 (ISQM 1), and the stricter regulation of file lockdown procedures and archiving, many firms have had to adapt their procedures to control the lockdown of engagement files, and the retention of system and engagement files. However, one critical aspect that is often overlooked is the integrity of the files. It is an area which is easily overlooked, as the content of files can’t be easily checked or monitored.

Regulatory considerations and the importance of file integrity

Under ISQM 1, firms are required to establish a robust system of quality management that ensures that engagement files are complete, accurate, and retained securely throughout their prescribed retention periods.

Additionally, ISA 230 (Audit Documentation) mandates that engagement files should contain sufficient and appropriate documentation to support the auditor’s conclusions. If files have been altered, lost, or accessed improperly, the integrity of the audit documentation is compromised, increasing the risk of regulatory scrutiny and quality control deficiencies.

Challenges and risks associated with file integrity

One of the primary challenges in maintaining file integrity is that the content of files cannot be easily checked or monitored without a structured approach. Many firms focus heavily on ensuring that engagement files are locked down and archived correctly, but insufficient attention is given to verifying whether:

• The archived files remain intact and unaltered over time
• The correct and most up-to-date version of the file is available for regulatory or monitoring purposes
• There are sufficient controls to prevent unauthorised changes or corruption of files.

If a file is accessed for regulatory review, peer monitoring or internal quality control purposes, and it is not the latest or correct version, it undermines the objective of maintaining a reliable audit trail. This not only leads to unnecessary quality findings, but also exposes the firm to potential non-compliance risks, which may result in regulatory sanctions or reputational damage.

Conclusion

Maintaining file integrity is not just a technical issue — it is a quality management imperative. Firms that fail to implement robust file integrity controls risk compromising audit documentation, regulatory compliance and overall audit quality. By aligning their document management practices with the principles outlined in ISQM 1 and ISA 230, firms can ensure that engagement files remain secure, accessible and unaltered throughout their retention periods.