Audit Evidence

Audit Evidence

Shahriyor Jabborov

Agenda

Overview
Requirements
Audit procedures
Sources
Types

What is audit evidence???

• Audit evidence is the data that auditors gather and evaluate during an audit to support their conclusions and opinions about the financial statements of an organization.

• Audit evidence is used to determine whether the financial statements are free from material misstatements and whether they are presented fairly in accordance with the applicable financial reporting framework.

Requirements of audit evidence

Appropriateness:

• The measure of the quality of audit evidence
• Auditor must obtain sufficient appropriate audit evidence. To be appropriate audit evidence must be:

- Relevant;

- Reliable.

Sufficiency:

• The measure of the quantity of audit evidence.
• Sufficiency of audit evidence mainly refers to the number of audit evidence.

Audit procedures for obtaining audit evidence

Inspection
Observation
External confirmation
Recalculations
Reperformance
Analytical procedures

Audit evidence can come from a variety of sources, including financial records, documents, and other information. Auditors use a combination of techniques to gather audit evidence

Generated directly by the auditors
Provided by third parties external to the entity
Provided by the auditee
Sources of audit evidence
Examples:
Direct inspection and observation, records of interviews or focus group discussion, questionnaire, analysis of survey responses, individual accounts, expenditure trends
Third-party confirmations ,reports of auditor’s experts, national statistical data
Data from databases, documents, accounting and budget information, activity statements, management representations, internal audit reports
Physical

• Notes;
• Photographs;
• Drawings;
• Samples;
• Property or events.

Documentary

• Documents;
• Accounting records;
• Management representations and reports;
• System descriptions;
• Contracts;
• The internet.

Oral

• Summary of information obtained through interviews of auditee staff or third parties.

Analytical

• Evidence that obtained by using professional judgement to evaluate physical, documentary and oral evidence reasoning, reclassification and comparison

Types of audit evidence