What is one of the first steps an auditor should take if major discrepancies are discovered?

When major discrepancies are discovered during an audit, one of the first and most crucial steps is to document those discrepancies in detail. This documentation serves multiple purposes: it provides a clear record of what was found, supports any findings with evidence, and can be critical for follow-up actions. A well-documented discrepancy helps ensure that the audit trail is complete, supporting the rationale behind any conclusions or recommendations made later on.

By thoroughly documenting the discrepancies, the auditor can ensure that all relevant details are captured, including the nature of the discrepancy, its potential impact, and any relevant context surrounding it. This documentation is essential for maintaining the integrity of the audit process and is particularly important if the findings need to be communicated to stakeholders or if further investigation is required.

In contrast, concluding the audit immediately or dismissing discrepancies as minor can lead to oversight of significant issues that might affect the overall findings of the audit. Discussing findings with outside parties prematurely could also compromise the audit's objectivity and lead to potential breaches in confidentiality. Therefore, detailed documentation stands out as the appropriate initial step to ensure accountability and comprehensive evaluation of the discrepancies identified.