Quick Answer: What Is Audit Evidence And Documentation?

What is the strongest form of audit evidence?

The strongest form of confirmation is the blank positive confirm.

A blank positive confirm asks the third-party to report the client’s asset balance back to the auditor without the prompt of the company’s recorded balance..

What is sufficient audit evidence?

Tracy, Jill Gilbert Welytok. The sufficiency of audit evidence is the amount or quantity of audit evidence. You determine the amount of audit evidence you need by considering the risk of material misstatement and the overall quality of the evidence you receive.

What is an audit documentation?

2. Audit documentation is the written record of the basis for the auditor’s conclusions that provides the support for the auditor’s representations, whether those representations are contained in the auditor’s report or otherwise. … Audit documentation also may be referred to as work papers or working papers .

What are the different types of audit documentation?

Examples of audit documentation are audit programs, fn 3 analyses, memoranda, letters of confirmation and representation, abstracts or copies of entity documents, and schedules or commentaries prepared or obtained by the auditor. Audit documentation may be in paper form, electronic form, or other media.

What are the qualities of audit evidence?

Appropriateness is the measure of the quality of audit evidence, i.e., its relevance and reliability. To be appropriate, audit evidence must be both relevant and reliable in providing support for the conclusions on which the auditor’s opinion is based.

What are the 3 types of audits?

There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor’s opinion which is included in the audit report.

What is meant by documentation?

Documentation is any communicable material that is used to describe, explain or instruct regarding some attributes of an object, system or procedure, such as its parts, assembly, installation, maintenance and use. … Paper or hard-copy documentation has become less common.

What are the four audit evidence decisions?

The auditors’ decisions on evidence accumulation can be broken down in to four sub decisions: Which audit procedure to use (Audit Procedure?) Which sample size to select for a given procedure (Sample Size?) Which items to select from population (Items??)

How do you gather audit evidence?

Techniques for Gathering Audit EvidenceUncontrolled documents. Look around for “bandit documents” posted on walls, machines, and desks. … Product outside the normal flow. … Measuring instruments. … Housekeeping and organization. … Product identification. … Improvised fixes and repairs. … Informal record keeping.

What is the purpose of audit documentation?

It provides evidence of the auditor’s basis for a conclusion about the achievement of the overall objective. It provides evidence that the audit was planned and performed in accordance with ISAs and other legal and regulatory requirements. It assists the engagement team to plan and perform the audit.

What is audit evidence and examples?

Auditing evidence is the information collected by an auditor to ascertain the accuracy and compliance of a company’s financial statements. … Examples of auditing evidence include bank accounts, management accounts, payrolls, bank statements, invoices, and receipts.

What are the contents of audit working papers?

Audit working papers refer to the documents that prepare by or use by auditors as part of their works. Those documents include the summary of the client’s nature of the business, business process flow, audit program, documents or information obtained from the client as well as audit testing documents.

What are the contents of audit file?

Current audit files are the files that keep all information related to current year auditing. Those documents include the current year financial statements, general ledger, management accounts, and supporting documents.

What are the sources of audit evidence?

Here’s a list of five common sources of “substantive evidence” that auditors gather to help them form an opinion regarding your financial statements.Confirmation letters. … Original source documents. … Physical observations. … Comparisons to external market data. … Recalculations.

What is meant by audit evidence?

Audit evidence is evidence obtained by auditors during a financial audit and recorded in the audit working papers. Auditors need audit evidence to see if a company has the correct information considering their financial transactions so a C.P.A. (Certified Public Accountant) can confirm their financial statements.

What are the 8 types of audit evidence?

Terms in this set (8)physical examination. inspection or count or tangible assets. … confirmation. receipt of written or oral repsonse from independent 3rd party, verifying accuracy of info requested by auditor. … inspection (documentation) … recalculation. … client inquiries. … re-performance. … analytical procedures. … observation.

How do I prepare an audit file?

To prepare workpapers, you want to use the following elements:A descriptive heading: It should include the client’s name, the workpaper’s purpose, and the date under examination.Indexing: Like a book, every workpaper has a unique page number showing its place in the audit file.More items…

Which of the following is a type of audit evidence?

The auditor can obtain different types of audit evidence, and it includes Physical Examination, documentation, analytical procedure, observations, confirmations, inquiries, etc. The type and amount are dependent on the type of organization that is being audited and the required audit scope.