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    Chapter 13 Audit Evidence

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    Clar Aaron Bautista
    The document discusses audit evidence and the auditor's responsibility to obtain sufficient appropriate audit evidence. It defines audit evidence as all the information used by the auditor to arrive at their opinion. It explains that sufficiency refers to the quantity of evidence and appropriateness refers to the quality and relevance of evidence. The document also lists 15 common audit procedures used to gather evidence like analyzing, comparing, confirming, counting, examining, and their definitions and examples. It states that written representations from management are also necessary audit evidence required by auditors.

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    Chapter 13 Audit Evidence

    Uploaded by

    Clar Aaron Bautista
    341 views9 pages
    The document discusses audit evidence and the auditor's responsibility to obtain sufficient appropriate audit evidence. It defines audit evidence as all the information used by the auditor to arrive at their opinion. It explains that sufficiency refers to the quantity of evidence and appropriateness refers to the quality and relevance of evidence. The document also lists 15 common audit procedures used to gather evidence like analyzing, comparing, confirming, counting, examining, and their definitions and examples. It states that written representations from management are also necessary audit evidence required by auditors.

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    The document discusses audit evidence and the auditor's responsibility to obtain sufficient appropriate audit evidence. It defines audit evidence as all the information used by the auditor to arrive at their opinion. It explains that sufficiency refers to the quantity of evidence and appropriateness refers to the quality and relevance of evidence. The document also lists 15 common audit procedures used to gather evidence like analyzing, comparing, confirming, counting, examining, and their definitions and examples. It states that written representations from management are also necessary audit evidence required by auditors.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    341 views9 pages

    Chapter 13 Audit Evidence

    Uploaded by

    Clar Aaron Bautista
    The document discusses audit evidence and the auditor's responsibility to obtain sufficient appropriate audit evidence. It defines audit evidence as all the information used by the auditor to arrive at their opinion. It explains that sufficiency refers to the quantity of evidence and appropriateness refers to the quality and relevance of evidence. The document also lists 15 common audit procedures used to gather evidence like analyzing, comparing, confirming, counting, examining, and their definitions and examples. It states that written representations from management are also necessary audit evidence required by auditors.

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    Chapter 13

    Audit
    Evidence
    PSA 500 (Redrafted), “Audit Evidence”

    explains what constitutes audit evidence in an audit of FS,


    and deals with auditor’s responsibility to design and
    perform audit procedures to obtain sufficient appropriate
    audit evidence to be able to draw conclusions on which
    to base the auditor’s opinion.

    Audit evidence is all the information used by the auditor in


    arriving at the conclusions on which the audit opinion is
    based, and includes both information contained in the
    accounting records underlying the FS and other
    information.
    Sufficient Appropriate Evidence
    Sufficiency is the measure of the quantity of audit evidence.
    Appropriateness is the measure of the quality of audit evidence and its
    relevance and to a particular assertion and its reliability.

    FACTORS INFLUENCING THE AUDITOR’S JUDGMENT AS TO WHAT IS


    SUFFICIENT AND APPROPRIATE AUDIT EVIDENCE

    Auditor’s assessment of the nature and level of inherent risk at both the FS level and the
    account balance or class of transactions level.

    Nature of the accounting and internal control systems and the assessment of control risk.

    Materiality of the item being examined.

    Experience gained during previous audits.

    Results of audit procedures, including fraud or error which may have been found.

    Source and reliability of information available.


    The ff. summarizes the most commonly used audit procedures to
    gather audit evidence and examples of their application:
    Audit Procedure Definition Examples of Application
    1. Analyze to identify and classify items for Account transaction
    further study
    2. Compare to observe similarities and Beginning balances with last
    differences between related items year’s audit figure
    3. Confirm to communicate with outside Accounts receivable; cash in
    parties to authenticate internal bank; accounts payable
    evidence
    4. Count to enumerate a characteristic Cash; inventory
    5. Examine to review critically Authoritative document such as
    invoices, checks
    6. Extend to multiply Inventory quantity
    7. Foot to add a column Total cash received column
    8. Inspect to scrutinize or critically examine a Certificate of stock
    document
    9. Interrelate to show relationship Interest expense with liabilities
    Audit Procedure Definition Examples of Application
    10. Observe to watch or test a client Inventory count
    11. Reconcile to establish agreement between Cash balance per ledger with
    separate sources of information cash balance per bank
    statement
    12. Test to sample Cash transaction
    13. Trace to follow a transaction through the Bookkeeping procedures
    steps of the system
    14. Verify to provide accuracy of numbers or Rent income against lease
    existence of amount contract
    15. Vouch to prove accuracy of accounting Cash disbursement
    entries by tracing to supporting
    documents

    PSA 580 (Revised and Redrafted), “Written Representations” provides that


    audit evidence is all the information used by the auditor in arriving at the
    conclusions on which the audit opinion is based. Written representations
    are necessary information that the auditor requires in connection with the
    audit of the entity’s financial statements.

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