Nature of Auditing

Auditing is the accumulation and evaluation

of evidence about information to determine
and report on the degree of correspondence
between the information and established criteria.

Auditing should be done by a competent,

independent person.

LO 1
CHAPTER

Nature and Type of Audit

7
Learning Objectives
Evidence

After studying this chapter, you should be able to:

1. Contrast audit evidence with evidence used by other professions.
2. Identify the four audit evidence decisions that are needed to create an audit program.
3. Specify the characteristics that determine the persuasiveness of evidence.
4. Identify and apply the eight types of evidence used in auditing.
5. Understand the purposes of audit documentation.
6. Prepare organized audit documentation.
7. Describe how technology affects audit evidence and audit documentation.
 Nature of Auditing

Auditing is the accumulation and evaluation

of evidence about information to determine
and report on the degree of correspondence
between the information and established criteria.

Auditing should be done by a competent,

independent person.

LO 1
 Learning objective 1

Contrast audit evidence with

evidence used by other
professions.
 Learning Objective 1
Nature of Evidence Contrast audit evidence
with evidence used by
other professions.

Any information used by the auditor to

determine whether the information being
audited is stated in accordance with
established criteria

The use of evidence is not unique to auditors

Evidence is also used by scientists, lawyers,

and historians

LO 1
 Learning Objective 1
Nature of Evidence Contrast audit evidence
with evidence used by
other professions.

Standar

Bukti Audit:
Informasi yang digunakan oleh auditor dalam
menarik kesimpulan sebagai basis opini
auditor.
Bukti audit mencakup baik informasi yang
terkandung dalam catatan akuntansi yang
mendasari laporan keuangan maupu informasi
lainnya
LO 1
 Learning Objective 1
Contrast audit evidence
Nature of Evidence with evidence used by
other professions.

LO 1
 Learning objective 2

Identify the four audit evidence

decisions that are needed to
create an audit program.

Audit Evidence Decisions
Learning Objective 2
Identify the four audit
evidence decisions that are
needed to create an audit
program.

1. Which audit procedures to use

2. What sample size to select
for a given procedure
3. Which items to select from
the population
4. When to perform the
procedures (timing)

LO 2
 Learning Objective 2
Identify the four audit
Audit Program evidence decisions that are
needed to create an audit
program.

It includes a list of the audit procedures

the auditor considers necessary.

 Sample sizes
 Items to select

 Timing of the tests

Most auditors use audit software

packages to generate audit programs.
LO 2
 Learning objective 3

Specify the characteristics that

determine the persuasiveness
of evidence.
 Learning Objective 3
Specify the characteristics
Persuasiveness of Evidence that determine the
persuasiveness of
evidence.

Two determinants:

Appropriateness Sufficiency

The persuasiveness of evidence can be evaluated only after

considering the combination of appropriateness and sufficiency
LO 3
 Learning Objective 3
Six Characteristics of Specify the characteristics
that determine the
Reliable Evidence persuasiveness of
evidence.

1. Independence of provider
2. Effectiveness of client’s
internal controls
3. Auditor’s direct knowledge
4. Qualification of individuals
providing the information
5. Degree of objectivity
6. Timeliness

LO 3

Relationships Among Audit
Evidence and Persuasiveness
Audit Evidence Decisions
Audit procedures and timing
Sample size and items to select
Learning Objective 3
Specify the characteristics
that determine the
persuasiveness of
evidence.
Qualities Affecting Persuasiveness
of Evidence
Appropriateness
Relevance
Reliability
Independence of provider
Effectiveness of internal controls
Auditor's direct knowledge
Qualifications of provider
Objectivity of evidence
Timeliness
When procedures are performed
Portion of period being audited
Sufficiency
Adequate sample size
Selection of proper population items
LO 3
 Learning Objective 3
Specify the characteristics
Persuasiveness and Cost that determine the
persuasiveness of
evidence.

In making decisions about evidence

for a given audit, both persuasiveness
and cost must be considered.

The auditor’s goal is to obtain a

sufficient amount of appropriate
evidence at the lowest total cost.

LO 3
 Learning objective 4

Identify and apply the eight

types of evidence used in
auditing.
 Learning Objective 4
Identify and apply the eight
Types of Audit Evidence types of evidence used in
auditing.

Physical
Examination
Confirmation
Observation

Audit Documentation
Reperformance Evidence

Analytical
procedures
Recalculation
Inquiry

LO 4
 Learning Objective 4
Explain the relationship
Relationship between audit objectives
and the accumulation of
audit evidence.

LO 4

Physical Examination
It is the inspection or count by the
auditor of a tangible asset.
This type of evidence is most often
associated with inventory and cash.
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.
LO 4
 Learning Objective 4
Explain the relationship
Confirmations between audit objectives
and the accumulation of
audit evidence.

Auditing Standards Requirements

Auditor must confirm
accounts receivable
Auditors control the mailing
United States
and receipt of replies
Electronic confirmations
are permitted

International Confirmations are not required

LO 4

Information often Confirmed
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.
LO 4
 Learning Objective 4
Explain the relationship
Documentation between audit objectives
and the accumulation of
audit evidence.

It is the auditor’s inspection of the

client’s documents and records.

Internal External
documents documents

LO 4

Analytical Procedures
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.

 Understand the client’s industry and business

 Assess the entity’s ability to continue as a
going concern
 Indicate the presence of possible misstatements
in the financial statements
 Reduce detailed audit tests

LO 4

Inquiries of the Client
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.

It is the obtaining of written or oral

information from the client in response to
questions from the auditor.

LO 4
 Learning Objective 4
Explain the relationship
Recalculation between audit objectives
and the accumulation of
audit evidence.

It involves rechecking a sample of calculations

made by the client.

LO 4
 Learning Objective 4
Explain the relationship
Reperformance between audit objectives
and the accumulation of
audit evidence.

It is the auditor’s independent tests of client

accounting procedures or controls that
were originally done.

LO 4
 Learning Objective 4
Explain the relationship
Observation between audit objectives
and the accumulation of
audit evidence.

 Use one’s senses to assess

client activities.
 Tour plant to obtain a general
impression of client’s facilities.
 Observation is rarely sufficient
by itself.
 Often need to corroborate
with another kind of evidence.

LO 4

Appropriateness of Types of
Evidence
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.
LO 4
 Learning Objective 4
Application of Types of Explain the relationship
between audit objectives
Evidence and the accumulation of
audit evidence.

LO 4

Terms and Types of Evidence
Learning Objective 4
Explain the relationship
between audit objectives
and the accumulation of
audit evidence.

Terms Type of Evidence

Examine Documentation
Scan Analytical procedures
Read Documentation
Compute Analytical procedures
Recompute Recalculation
Foot Recalculation
Trace Documentation/Reperformance
Compare Documentation
Count Physical examination
Observe Observation
Inquire Inquiries of client
Vouch Documentation
LO 4
 Learning objective 5

Understand the purposes of

audit documentation.
 Learning Objective 5
Audit Documentation Understand the purposes
of audit documentation.

Audit documentation is the principal record

of auditing procedures applied, evidence
obtained, and conclusions reached by
the auditor in the engagement.

LO 5
Four Purposes of Audit Learning Objective 5
Understand the purposes
Documentation of audit documentation.

A basis for planning the audit

A record of the evidence accumulated and

the results of the tests

Data for determining the proper type of

audit report

A basis for review by supervisors and

partners
LO 5
 Learning objective 6

Prepare organized audit

documentation.
Audit File Contents and Learning Objective 6
Prepare organized audit
Organization documentation.

LO 6
 Learning Objective 6
Permanent Files Prepare organized audit
documentation.

These files are intended to contain data of a

historical or continuing nature pertinent to
the current audit:
 Copies of articles of incorporation, bylaws
 Bonds indentures and contracts
 Analyses from previous years of account that have
continuing importance to the auditor
 information related to understanding internal
control and assessing control risk.
 results of analytical procedures from previous
years’ audits.
LO 6
 Learning Objective 6
Current Files Prepare organized audit
documentation.

 Audit program

 General information

 Working trial balance

 Adjusting and reclassification entries

 Supporting schedules

LO 6
Types of Supporting Learning Objective 6
Prepare organized audit
Schedules documentation.

 Analysis
 Trial balance or list
 Reconciliation of amounts
 Tests of reasonableness
 Summary of procedures
 Examination of supporting documents
 Informational
 Outside documentation

LO 6
Relationship of Audit Documen- Learning Objective 6
Prepare organized audit
tation to Financial Statements documentation.

LO 6
Preparation of Audit Learning Objective 6
Prepare organized audit
Documentation documentation.

 Proper identification of each file

 Files indexed and cross-referenced

 Clear indication of work performed

 Include sufficient information

 State conclusions reached

LO 6
Preparation of Audit Learning Objective 6
Prepare organized audit
Documentation documentation.

LO 6
> DO IT!

Baca standar audit terkait Bukti Audit

 SA 500: Bukti Audit
 SA 501: Bukti Audit – Pertimbangan Spesifik
 SA 505: Konfirmasi Eksternal
 SA 510: Perikatan Audit Tahun Pertama – Saldo Awal
 SA 520: Prosedur Analitis
 SA 530: Sampling Audit
 SA 540: Audit atas Estimasi Akuntansi
 SA 550: Pihak Berelasi
 SA 560: Peristiwa Kemudian
 SA 570: Kelangsungan Usaha
 SA 580: Representasi Tertulis
CHAPTER

Overall Audit Strategy

13
Learning Objectives
and Audit Program

After studying this chapter, you should be able to:

1. Use the five types of audit tests to determine whether financial statements are fairly
stated;
2. Select the appropriate types of audit tests;
3. Understand how information technology affects audit testing;
4. Understand the concept of evidence mix and how it should be varied in different
circumstances;
5. Design an audit program;
6. Compare and contrast transaction-related audit objectives with balance-related and
presentation and disclosure-related audit objectives;
7. Integrate the four phases of the audit process.
 Steps in Planning

Accept client and

perform initial Identify significant risks due to
audit planning fraud or error
Finalize
overall audit
Understand the
strategy and
client’s business
audit plan
and industry Assess inherent risks

Perform preliminary
analytical procedures Understand internal control
and assess control risk
Set preliminary judgment
of materiality and
performance materiality
 Learning objective 1

Use the five types of audit tests

to determine whether financial
statements are fairly stated.
 Learning Objective 1
Use the five types of audit
Types of Tests tests to determine whether
financial statements are
fairly stated

 Risk assessment procedures

 Further audit procedures

LO 1
 Learning Objective 1

Risk Assessment Procedures Use the five types of audit

tests to determine whether
financial statements are
fairly stated

A major part of these procedures are

done to obtain an understanding
of internal control.

LO 1
 Further Audit Procedures and Learning Objective 1
Use the five types of audit

the Audit Risk Model tests to determine whether

financial statements are
fairly stated

Audit risk AAR

model = PDR
IR × CR

Sufficient
Substantive Tests of
Tests of Analytical appropriate
+ tests of + procedures + details of = evidence
controls
transactions balances
per GASS

Further audit procedures

LO 1
Role of All Audit Tests in the Learning Objective 1
Use the five types of audit

Sales and Collection Cycle tests to determine whether

financial statements are
fairly stated

Accounts Cash in
Sales Receivable Bank
Sales Cash receipts
transactions transactions
Audited by Audited by
TOC, STOT, and AP TOC, STOT, and AP

Ending Ending
balance balance
Audited by AP and TDB

TOC + STOT + AP + TDB

= Sufficient competent evidence per GAAS
LO 1
 Learning objective 5

Design an audit program.

 Learning Objective 5
Audit Program Design an audit program.

 The list of audit procedures for an audit

area or an entire audit
 Contents:
 Types of tests
 Audit objectives
 Procedures
 Sample size
 Items to select
 Timing

LO 5
 Learning Objective 5
Types of Tests Design an audit program.

 Risk assessment procedures

 Tests of controls

 Substantive tests of transactions

 Analytical procedures

 Tests of details of balances

LO 5
 Learning Objective 5
Audit Objectives Design an audit program.

 Transaction-related

 Balance-related

 Presentation and disclosure-

related

LO 5
 Learning Objective 5
Audit Procedures Design an audit program.

Terms Type of Evidence

Examine Documentation
Scan Analytical procedures
Read Documentation
Compute Analytical procedures
Recompute Recalculation
Foot Recalculation
Trace Documentation/Reperformance
Compare Documentation
Count Physical examination
Observe Observation
Inquire Inquiries of client
Vouch Documentation
LO 4
> DO IT!

Baca Buku Praktikum Audit karangan Sukrisno Agoes

dan Estralita Trisnawati, Edisi 3.
 Bagian I: Instruksi Umum dan Persiapan
 Bagian II: Berkas Permanen
 Bagian III: Permasalahan
 Modul 1: Perencanaan Pemeriksaan
Pertanyaan?

SELESAI