Audit Evidence

AUDIT EVIDENCE

Audit programs should take into consideration the audit evidence required/desired as well as the various data gathering techniques. aaaaaa

The rules/standards of audit evidence dictate that the evidence gathered during the audit be:

· Sufficient, persuasive. This requires the exercise of good professional judgement. Audit evidence from the most to least persuasive include: physical examination; externally prepared; observations; inquiries/testimonial.

· Competent. Obtaining the best quality of evidence available.

· Useful. Evidence supporting goals and objectives.

· Relevant. Evidence needs to be logical and sensible relative to the audit finding.

The types of audit evidence include:

· Analytical. Review of relationships.

· Documentary. Evidence exists in some permanent form.

· Physical. Evidence is obtained via direct observations.

· Testimonial. Statements made by customers/management; typically needs to be corroborated.

Audit programs should also consider the source of information/evidence (has it been "tainted"?):
· Internal (bank account reconciliation, for example)

· Internal - External - Internal (check)

· External - Internal (bank statement)

· External (bank account confirmation returned directly to the auditor)

Various techniques are used to gather audit evidence:
· Physical Examination

· Confirmation

· Observation

· Recalculating

· Reconciliation

· Inquiry

· Inspecting

· Analytical Procedures

· Detail Testing

When designing detailed audit tests a distinction should be made between "tracing" and "vouching" for two important reasons:
· Tracing (going from the source document) is a completeness test; vouching is not.

· Tracing detects inappropriate exclusion; vouching may not. Therefore, for example, when looking for fraud tracing and not vouching tests are necessary.

The overall development of the audit program should demonstrate appropriate "linkage" between:
Organization/auditable entity objectives

Audit objectives

Management assertions - financial, operational, compliance, specific

Controls

Risks

Types of audit evidence desired

Data gathering technique

Audit test

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Audit Services ^Tel:615-790-9858 ^Fax: 209-797-7983 ^{PO Box} 681387, Franklin, TN 37068

AUDIT EVIDENCE

The rules/standards of audit evidence dictate that the evidence gathered during the audit be:

The types of audit evidence include:

Audit programs should also consider the source of information/evidence (has it been "tainted"?):

Various techniques are used to gather audit evidence:

When designing detailed audit tests a distinction should be made between "tracing" and "vouching" for two important reasons:

The overall development of the audit program should demonstrate appropriate "linkage" between:

Audit Services Tel:615-790-9858 Fax: 209-797-7983 PO Box 681387, Franklin, TN 37068

Audit Services ^Tel:615-790-9858 ^Fax: 209-797-7983 ^{PO Box} 681387, Franklin, TN 37068