Audit evidence is information that the specialist has received in the course of inspections and issued on the basis of which the final conclusion economic entity.As these documents can serve the data of the primary account, explanatory notes and explanations in the organization, the results of the inventory of activities, the financial statements of the client, the data provided by the auditor to third parties.
All audit evidence must have the property of reliability and validity.A questionable information is subject to any additional checks either not considered as an argument.To directly obtain the required performance auditor uses tests of controls on-farm activities and other review procedures.The tests are the basis for the expert to talk about the rational organization of accounting and control systems.Checks essentially aimed at confirmation of the existence of errors or material misstatement.
can distinguish the following types of audit evidence:
- Exterior.
- Inner.
- mixed.
external evidence include the information and data that the auditor obtains from third parties.Internal evidence come to a specialist due to the words of the economic entity or employee of the company.This information can be expressed both in writing and orally.A mixed view involves the provision of evidence by the client or employees to third parties confirmation in writing.
Where the auditor uses documents from different sources, which are contrary to each other, or the opinion of employees at odds, it is advisable to apply additional audit procedures.But if the specialist carrying out checks, has not received full information on the audited facility due to failure of the legal entity, the auditor has good reason to issue a conclusion different from the absolute positive or supplement the report marked a lack of information base.
Audit evidence specialist receives through the use of a special audit, which includes the main stages:
- observation and study.
- request and receive a response.
- inventory.
- Conversion.
- analysis.
examination or inspection involves verification of records in reporting actual transactions.The level of validity and reliability of indicators in this case is dependent on the modernity and effectiveness of internal controls.
Surveillance involves the systematic monitoring of the work performed by employees of a particular department.The procedure for sending the request and receiving the answer is to identify the specific information required for the quality inspection.That is, the auditor sends a request for access to that data, and is waiting for a positive or negative response.
inventory and recalculation allows experts to verify the actual compliance indicators, reflected in the documents and the actually existing.Analytical analysis is performed in order to detect distortions and to determine the specific causes of this situation.
Before choosing a specific method, the auditor shall determine the sample size, ie the scope of the individual methods and techniques of control, or express an opinion on the need for continuous testing in the enterprise.This person must comply with federal auditing standards, which include two basic commitments:
- separate spheres of accounting report, selected sample, should be an integral part of the general population, that is, correspond to the aspect on which experts will make the final conclusion.
- sample should be a miniature copy of the entire population.
Thus, we can say that the audit evidence is a crucial element that confirms the reliability and accuracy of the findings of an expert.
