What are the three types of audit evidence?

In this chapter, let us understand the different types of evidence used in Auditing.

• Accounting System. Accounting System of an organization must be reliable.
• Physical Evidence.
• Documentary Evidence.
• Journals and Ledgers.
• Oral Evidence.
• Subsequent Events.
• Circumstantial Evidence.
• Ratios.

Why is audit evidence important along the course of an audit?

Audit evidence is critical to the audit and internal controls process because it allows executives of public companies to trust the opinions of their auditors. An auditor has to collect all the possible audit evidence to establish the truthfulness of the system to record these transactions.

Which audit evidence is the most reliable?

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 are the three audit procedures?

Here are several general classifications of audit procedures:

• Classification testing.
• Completeness testing.
• Cutoff testing.
• Occurrence testing.
• Existence testing.
• Rights and obligations testing.
• Valuation testing.

What are the method of obtaining audit evidence?

Audit procedures to obtain audit evidence can include inspection, observation, confirmation, recalculation, reperformance, and analytical procedures, often in some combination, in addition to inquiry.

Is a method of obtaining audit evidence?

An Auditor should get all evidence in the process of his auditing work. This is the test which tells auditor that internal control is prefect or not . Observation is also main method of audit evidence . In this way auditor gets the Testimony of witnesses.

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.

How is bottom-up audit evidence used in an audit?

The auditor integrates all information about the client and client’s industry to form expectations about the financial statements. Bottom-up audit evidence focuses on directly testing transactions, account balances, and the systems that record the transactions and resulting account balances.

Is the Auditor expected to examine all information?

Auditors are not expected to examine all information that may exist. The auditor should design and perform audit procedures that are appropriate in the circumstance for the purpose of obtaining sufficient appropriate audit evidence. Sufficiency is the measure of the quantity of audit evidence.

When to use persuasive evidence in an audit?

In making decisions about evidence for a given audit, both persuasiveness and cost must be considered. The auditor’s goal is to obtain a sufficient amount of appropriate evidence at the lowest total cost. ©2010 Prentice Hall Business Publishing, Auditing 13/e, Arens//Elder/Beasley 7 – 12