Which of the following best describes the guideline for preparing audit engagement workpapers?

The guidelines for preparing audit engagement workpapers emphasize clarity, completeness, and accuracy to ensure that they can be easily understood and used by others within the auditing function.

Option A: Workpapers should be understandable to the auditor in charge and the chief audit executive.

While workpapers must indeed be clear to the auditor in charge and the chief audit executive, this guideline does not fully capture the broader requirement for understandability to other auditors.

Option B: Workpapers should be understandable to the audit client and the board.

Although transparency with the audit client and the board is important, workpapers are primarily internal documents used to support the audit process and conclusions.

Option C: Workpapers should be understandable to another internal auditor who was not involved in the engagement.

This is the most comprehensive requirement, ensuring that any internal auditor, even if not originally involved, can review the workpapers, understand the procedures performed, and the conclusions reached. This is crucial for maintaining continuity, quality control, and facilitating reviews or future audits.

Option D: Workpapers should be understandable to external auditors and regulatory agencies.

While external auditors and regulatory agencies may review workpapers, the primary audience is internal auditors, who need to ensure the workpapers are detailed and clear enough for effective internal use and review.