Are accounting records sufficient audit evidence?
The entries in the accounting records are often initiated, recorded, processed and reported in electronic form. However, because accounting records alone do not provide sufficient audit evidence on which to base an audit opinion on the financial statements, the auditor obtains other audit evidence.
What are the 8 types of audit evidence?
Types of Audit Evidence
- Physical examination. Physical examination consists of auditors physically verifying the existence of various assets.
- Documentary evidence. Documentation is also a crucial part of any audit.
- Analytical procedures.
- Oral evidence.
- Accounting system.
- Observatory evidence.
What are the three 3 methods of collecting audit evidence?
Gathering evidence as part of an audit involves a mix of techniques that are used interchangeably: visual observation, examination of records, and employee interviews.
What are the requirements for audit evidence?
The relevance of audit evidence depends on: The design of the audit procedure used to test the assertion or control, in particular whether it is designed to (1) test the assertion or control directly and (2) test for understatement or overstatement; and.
What is sufficient audit evidence?
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. Most of the time, you rely on evidence that’s persuasive rather than convincing.
What is the most reliable type of audit evidence?
Audit evidence is more reliable when it exists in documentary form, whether paper, electronic, or other medium (for example, a contempo- raneously written record of a meeting is more reliable than a subse- quent oral representation of the matters discussed). audit evidence provided by photocopies or facsimiles.
What is the strongest form of audit evidence?
blank positive confirm
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 are examples of audit evidence?
Examples of auditing evidence include bank accounts, management accounts, payrolls, bank statements, invoices, and receipts. Good auditing evidence should be sufficient, reliable, provided from an appropriate source, and relevant to the audit at hand.
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.
Which of the following is the most reliable type of audit evidence?
(1) Information obtained indirectly from outside sources is the most reliable audit evidence.
What are the records to be retained in an audit?
The records to be retained include records relevant to the audit or review, including workpapers and other documents that form the basis of the audit or review, and memoranda, correspondence, communications, other documents, and records (including electronic records), which are created,…
What makes up the evidence in an audit?
Audit evidence, which is cumulative in nature, includes audit evidence obtained from audit procedures performed during the course of the audit and may include audit evidence obtained from other sources, such as previous audits and a firm’s quality control procedures for client acceptance and continuance.
Why do independent auditors need to gather evidence?
The major reason an independent auditor gathers audit evidence is to support their conclusions related to financial statement items. For auditors’ work to be trustworthy, they must use proper procedures and techniques to evaluate the truthfulness and fairness of the financial statements.
How is recalculation used to collect audit evidence?
Because each transaction in the client’s organization is normally supported by at least one document, there is a large volume of this type of evidence available. Recalculation consists of checking the mathematical accuracy of documents or records. Recalculation may be performed manually or electronically.