Techniques of obtaining evidence, Auditing

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.

Posted Date: 12/3/2012 6:37:20 AM | Location : United States







Related Discussions:- Techniques of obtaining evidence, Assignment Help, Ask Question on Techniques of obtaining evidence, Get Answer, Expert's Help, Techniques of obtaining evidence Discussions

Write discussion on Techniques of obtaining evidence
Your posts are moderated
Related Questions
Statistical sampling – Advantages a) It is scientific and defensible; b) It provides a precise mathematical statement about probabilities of being correct; c) It is efficie

Systems Based audit approach The basis of IAS 400, Risk Assessment and Internal Control. The term systems audit refers to the typical audit approach to medium and large comp

Q. What do you understand by Yellow Book? Yellow Book - Written by GENERAL ACCOUNTABILITY OFFICE, yellow book sets forth standards to be followed in auditing FINANCIAL STATEMEN

Pension Funds - Specialized Audit Situation Pension funds are set up through companies or another organization: (a)  To retired employees to administer the pension payable

Describe the management system within your case study business. Assess the risk of fraud in this business, and suggest methods for detection Management system in this ca

It is a compulsory audit Completed by a CA. Finance Audit conduct by the CA to compliance the legal requirements of monitory issues.

(i) Overview of the audit process (a) Identify the key steps in this framework/ concept. (b) Briefly explain each of the key steps, in your own words. (ii) Framework of cr

Develop an audit program to identify and reduce potential fraud using ACL.

Investment - Audit Process The investment is held for wealth generation that as interest and dividends on shares and capital growth and loan notice.  Recent investments are re

Statistical techniques Factors to be taken into consideration before adopting statistical techniques: a) The number of clients to whom it is appropriate because set up costs a