What belongs in the permanent file
Which client documents belong in the permanent audit file rather than the current year's file, how to keep them current, and where to keep them in Achekam.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
Every year, a new audit senior asks the client for the same documents: the memorandum of incorporation, the shareholder register, the long-term lease, the loan agreement with the bank. Every year the client sighs and sends them again. And every year, somewhere in the previous files, the same documents already sit, unopened.
The permanent file exists to stop that. It holds the documents and information that stay relevant to an engagement for more than one year, kept up to date and carried forward, so that each year's team starts from what is already known and only asks for what has changed.
Permanent file versus current file
The distinction is about how long a document stays useful.
The current file holds the work and evidence for one period: the trial balance, lead schedules, working papers, confirmations, the management representation letter, the report. Next year it will be replaced by a new current file.
The permanent file holds information with lasting relevance: who the client is, how it is owned and governed, the agreements that shape its finances, and the history the team needs to understand the current year.
A useful test: if next year's team would need this document and it has not changed, it belongs in the permanent file. If it describes this year only, it belongs in the current file. Where a permanent document is used as evidence this year, for example a loan agreement supporting the borrowings note, the current year's paper should refer to it rather than copy it.
Constitutional documents, agreements and structure charts
The contents vary with the client, but most permanent files hold the same groups:
| Group | Typical contents |
|---|---|
| Constitution and registration | Memorandum of incorporation or constitution, registration certificates, tax and VAT registration details |
| Ownership and governance | Share register, directors and their appointment dates, trustees or members, minutes of significant decisions |
| Group structure | Structure chart showing holding companies, subsidiaries and related entities |
| Long-term agreements | Leases, loan agreements and security, shareholder agreements, significant supply or customer contracts |
| Accounting and systems | Chart of accounts, accounting policies, a description of key systems and controls |
| Tax history | Assessments, rulings, disputes and their outcomes |
| Engagement history | Prior-year issues, recurring adjustments, management letter points and how they were resolved |
For South African companies, the Companies Act sets out which records a company itself must keep and in what form; section 24 of the Companies Act, 2008 lists them and sets the minimum period they must be kept. Many of the documents the auditor needs for the permanent file are copies of exactly those records. Nigerian and Kenyan companies have equivalent duties under their own company law.
Group structure deserves particular care because it changes quietly. In Achekam, staff can see clients grouped under their parent group, with each group's entities and engagement counts, and can create a group and add entities to it under CLIENTS > Client Groups and Client Entities. Keeping that grouping accurate is the system's version of the structure chart; keep the chart in the permanent file in step with it.
Keeping them current each year
A permanent file that is not updated is worse than none, because it gives false comfort. Build an update into every engagement:
- At planning, review the permanent file and list what may have changed.
- Ask the client specifically about those items: new directors, new loans, changes in shareholding, new significant contracts.
- Replace superseded documents, and mark the old version as superseded rather than deleting it.
- Record who reviewed the permanent file and when.
- At completion, add anything learned this year that next year's team will need.
The history matters. A lease that was renegotiated still explains last year's figures, so keep the earlier version, clearly marked.
Where they live in the client's vault
Permanent file documents are documents, and they belong in the client's folder in the Document Centre. The Document Centre is a vault with a folder per client and lead, where staff upload files and folders, keep versions, tag, archive and restore with a reason, and search.
Those features suit permanent material well:
- Versions keep the old memorandum when the amended one arrives.
- Tags such as "permanent", with a group name, mark which documents belong to the permanent file, whatever folder they sit in.
- Archive and restore with a reason keep superseded documents available without cluttering the current view.
Agree a folder and tag convention across the firm, so that every client's permanent material is found in the same place. More on organising the vault is in client vault folders and versions.
The menu entry and what it opens
There is a trap in the audit menu. A Permanent Files menu entry exists, but it does not open a permanent-file screen of its own. Like the Sampling, Findings, Audit Procedures and Adjustments entries, it opens the working-paper list, its reviewer view or the Central Audit Data Hub.
So the permanent file is not a separate area you will find by clicking that entry. It is the set of documents you keep, tagged and versioned, in the client's vault, and referred to from the working papers. The working papers themselves sit in the Working Paper Control Centre, under AUDIT & ASSURANCE > Working Papers, which shows each engagement's file as an index with progress by status. Where the permanent file fits in that index is covered in indexing an engagement file.
Choose one long-standing client this week, gather its permanent documents into the vault with the firm's agreed tags, and use that client as the model for the rest.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
