Techniques of obtaining evidence, Auditing

Assignment Help:

Techniques of obtaining evidence

ISA 500 mentions them as:

(a) Inspection of records or documents,
(b) Inspection of tangible assets,
(c) Observation,
(d) Inquiry,
(e) Confirmation,
(f) Recalculation,
(g) Re-performance and
(h) Analytical procedures.

These can be further analyzed as follows:

(a) The physical examination: of tangible assets and counting them;

(b) Confirmation: These should be in writing, external sources being preferable to internal sources;

(c) Examination of original documents: Vouching should be carried out that is comparing original documents with entries in the books;

(d) Re-computation: This involves carrying out additions, calculations, extracting balances, rechecking postings and summaries.

(e) Scanning: This is useful in seeking the unusual or extra-ordinary item. It involves just flipping through the records and documents looking out for the odd items.

(f) Inquiry: This is asking questions of knowledgeable persons within and outside the entity. It is a necessary and valid technique.  Auditors however, prefer confirmation to oral answers.

(g) Correlation: This is seeking consistency in the records and in the accounts and using evidence obtained in other areas to provide additional assurance in other areas.

(h) Observation: Visual evidence is more satisfactory therefore, observing a procedure being performed is the best possible confirmation. However, observation has the drawback that you can only rely on it at the time you are observing. You can never be sure that the procedure is carried out that way all the time.

Related Discussions:- Techniques of obtaining evidence

Advantages, two advantages of an Audit to the shaire holders

two advantages of an Audit to the shaire holders

AGENCY THEORY, The agency relationship between absentee owners and managers...

The agency relationship between absentee owners and managers produce a natural conflict of interest.what does it mean?

Checking consolidation papers, Checking Consolidation Papers The audit...

Checking Consolidation Papers The auditor pays particular concentration to the calculation of: a) Goodwill arising on consolidation and acquisition b) Post-acquisition a

Reliability - sources of evidence, Reliability - Sources of evidence R...

Reliability - Sources of evidence Reliability of audit evidence is influenced through its nature and its source and since it is dependent upon the specific circumstances, we c

Examples of specialists, Examples of Specialists Examples of specialis...

Examples of Specialists Examples of specialists or experts whose work may be relied upon include: For valuations such as land and buildings, machinery and plant,

Process to adopt liabilities, Process to Adopt Liabilities It is signi...

Process to Adopt Liabilities It is significant that the auditor realises which such liabilities can exist and he should obtain reasonable steps to unearth them whether they ex

Auditors procedures after stock taking, Auditors Procedures After Stock Tak...

Auditors Procedures After Stock Taking It is particularly a follow up exercise and it includes: 1) Checking the cut off along with the details of last numbers of stock move

Computation of significant ratios, Plz assist me with these questions Th...

Plz assist me with these questions The auditors for Weston University are conducting their audit for the fiscal year ended December 31, 2011. Specifically, the audit firm is now

Assertions about classes, Assertions about classes Assertions about ...

Assertions about classes Assertions about classes of transactions and events for the period under audit : a) Occurrence -events and transactions which have been recorde

Materiality, how to calculate materiality given the acoountin period inform...

how to calculate materiality given the acoountin period information

Write Your Message!

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd