Question

• Brief statement on the 80 types of audit evidence (physical examination, observation, confirmations, inquiry, recalculation, etc.).

Answer 1

-->> FIRSTLY WE KNOW ABOUT WHAT IS EVIDENCE :-

-->> Evidence :- any information used by an auditor to determine whether the information being audited is stated in accordance with the established criteria.

==>> There is a Eight types of audit evidence are :-

1:- Physical examination -- :- - Is the inspection or count by the auditor of a tangible asset.

- Most often associated with inventory or cash.

- Also applies to the verification of securities, notes receivable, and tangible fixed assets.

2):- Confirmation :- - The receipt of a direct written response from a third party verifying the accuracy of information that was requested by the auditor.

- When practical and reasonable, auditing standards require the confirmation of a sample of accounts receivable.

- To be reliable, must be controlled by auditor from time prepared until returned.

3):- Inspection :- - The auditor's examination of the client's documents and records to substantiate the information that is, or should be, included in the financial statements.

- Internal documents (need good internal control).

- External documents :- 1:-Vouching - when auditors use documentation to support recorded transactions.

2:-Tracing - if the auditor traces from one report to another to satisfy the "completeness" objective.

4):- Analytical Procedures :- evaluations of financial information through analysis of plausible relationships among financial and non -financial data.

5) :- Inquiry :- the obtaining of written or oral information from the client in response to questions from the auditor.

6) :- Recalculation - rechecking a sample of calculations (often done by computer-assisted software).

7) :- Reperformance :- independent tests of client accounting procedures or controls that were originally done as a part of an entity's accounting and internal control system.

8 ) :- Observation :- - Consists of looking at a process or procedure being performed by others (watching).

- Requires corroborative evidence i.e, additional evidence to support the original evidence.