Factors that highly affect the reliability of audit evidence are: Source ; Source is evaluated based on its provider's independence, objectivity, internal control's strength and etc. Verifiability ; Such as Official Receipts with OR number, Particulars, date and company name and etc. Audit evidence is obtained from an appropriate mix of tests of control and substantive procedures. In some circumstances, evidence may be obtained entirely from substantive procedures. The reliability of audit evidence is influenced by its source: internal or external, and by its nature: visual, documentary or oral. A2. Most of the auditor's work in forming the auditor's opinion consists of obtaining and evaluating 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. The six characteristics of reliability that determine the evidence are independence of provider, effectiveness of clients internal controls, auditors direct knowledge, qualifications of individuals providing the information, degree of objectivity and timeliness. Audit sampling can be defined as the process of applying auditing procedures to under 100% of different items in an organization's account balance in a way that every single unit might have an equal probability of being selected. Techniques for Audit Sampling.
Because this form of audit evidence is generated by the auditor, not by the entity being audited, observation is considered to be strong evidence for existence.
Terms in this set (8) physical examination. inspection or count or tangible assets. confirmation. receipt of written or oral repsonse from independent 3rd party, verifying accuracy of info requested by auditor. inspection (documentation) recalculation. client inquiries. re-performance. analytical procedures. observation.
Factors that highly affect the reliability of audit evidence are: Source ; Source is evaluated based on its provider's independence, objectivity, internal control's strength and etc. Verifiability ; Such as Official Receipts with OR number, Particulars, date and company name and etc.
Auditors use audit evidence in many different forms and sources. Those audit evidence could be data or information, physical or nonphysical. For an example of audit evidence: Financial statements. Accounting information.
The two characteristics of the appropriateness of evidence are: relevance and reliability. Which of the following circumstances most likely would cause an auditor to suspect that material misstatements exist in a client's financial statements?
3 primary types of audit performed by CPAs are; (1) financial audit, (2) operational audit, and (3) compliance audit. The latter two services are often called audit activities, even though they are most similar to assurance and attestation services. Types of Audit are; Financial Audit.
Audit evidence is evidence obtained by auditors during a financial audit and recorded in the audit working papers. Auditors need audit evidence to see if a company has the correct information considering their financial transactions so a C. P. A. (Certified Public Accountant) can confirm their financial statements.
? Further audit procedures – a combination of tests of controls, substantive tests of transactions, analytical procedures, and tests of details of balances performed in response to risks of material misstatement by the auditor's risk assessment procedures.
Good evidence used in evaluations has the following characteristics: It is intentional, and a dialogue about its meaning and relevance has taken place. It is purposeful, designed to answer questions the institution has raised. It has been interpreted and reflected upon, not just reviewed in its raw or unanalyzed form.
Audit Evidence. The audit evidence are important to be collected by an auditor during the process of his auditing work. The main objective of any audit is to find out the compliance of a company's financial statements with the GAAP applicable to the jurisdiction of the entity.
The two factors that determine the persuasiveness of evidence is appropriateness (competent), meaning its relevance and reliability in meeting audit objectives for class of transactions and account balances. the evidence collected must be reliable for quality internal control, source of evidence and type of evidence.
Here's a list of five common sources of “substantive evidence” that auditors gather to help them form an opinion regarding your financial statements. Confirmation letters. Original source documents. Physical observations. Comparisons to external market data. Recalculations.
Audit procedures are the processes, technique, and methods that auditors perform to obtain audit evidence which enables them to make a conclusion on the set audit objective and express their opinion. Sometimes we call audit procedures as audit programs.
The 5 assertions are Existence or occurrence. Completeness. Rights and obligations. Valuation or Allocation. Presentation and disclosure. Note that each line in the financial statements contains all assertions. However, the risk of misstatement for each assertion will vary according to the type of account.