Legal Definitions - working papers

The term working papers has two distinct meanings in legal and professional contexts:

• 1. As a Work Permit for Minors:

  In some jurisdictions, "working papers" refers to an official document, often called an employment certificate or permit, that a minor (someone under the legal adult age, typically 18) must obtain before they can be legally employed. This document ensures that the minor is of a legal age to work, that the job complies with child labor laws regarding hours and types of work, and that their education is not unduly interrupted.

  • Example 1: Sarah, who is 16 years old, wants to take a part-time job at a local coffee shop after school. Before the coffee shop owner can legally hire her, Sarah must apply for and receive her working papers from the appropriate government agency, demonstrating she meets the age and other requirements for employment.

    Explanation: This illustrates "working papers" as the mandatory permit that allows a minor to be legally employed, protecting both the minor and the employer by ensuring compliance with child labor laws.

  • Example 2: A summer camp is preparing to hire several 15-year-old counselors-in-training. The camp director informs all prospective minor employees that they must present valid working papers before their first day of work, as required by state law for all employees under 16.

    Explanation: Here, the term refers to the official documentation required for minors to hold specific jobs, ensuring the employer adheres to regulations concerning underage workers.

• 2. As Audit Documentation in Accounting:

  In the field of accounting and auditing, "working papers" refers to the detailed records, notes, analyses, and other documentation prepared and maintained by an independent auditor during the course of an audit. These papers serve as evidence of the audit procedures performed, the tests conducted, the information gathered, and the conclusions reached by the auditor. They form the basis for the auditor's opinion on the financial statements and provide a comprehensive audit trail.

  • Example 1: During the annual audit of a publicly traded technology company, the audit team meticulously documents every step, including copies of invoices reviewed, calculations verifying revenue figures, and interview notes with management. All these records collectively form the auditor's working papers, which will support their final audit report.

    Explanation: This demonstrates "working papers" as the comprehensive set of documents created by the auditors to substantiate their audit process and findings.

  • Example 2: A government auditor is reviewing the financial records of a non-profit organization that received federal grants. The auditor creates detailed spreadsheets analyzing grant expenditures, memos summarizing discussions with the non-profit's finance director, and copies of bank statements used for reconciliation. These documents constitute the auditor's working papers.

    Explanation: In this context, the term refers to the auditor's own records that provide evidence of the audit work performed and the conclusions drawn regarding the non-profit's use of funds.

  • Example 3: Following an investigation into potential financial irregularities at a manufacturing firm, a forensic accountant compiles all their findings, including transaction analyses, copies of suspicious emails, and summaries of interviews with employees. These documents are crucial working papers that would be used to present evidence in court if legal action were pursued.

    Explanation: Here, "working papers" are the detailed records and evidence gathered by an accountant during an investigation, forming the basis for their professional conclusions and potential legal proceedings.