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Audit evidence includes the information contained in the accounting records underlying the financial statements and other information: Minutes of meetings Confirmations from third parties Analysts reports Comparable data (benchmarking) Information obtained by the auditor from audit procedures The auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion: Sufficiency is the measure of the quantity of audit evidence.AUDIT EVIDENCE All of the information used by the auditor in arriving at the conclusions on which the audit opinion is based. Appropriateness is the measure of the quality (relevance and reliability) of audit evidence. 2 .
QUALITY OF EVIDENCE External Entity Auditor Written Original 3 .
AUDIT PROCEDURES Inspection of Assets Inspection of Documentation Observation Inquiry Confirmation Recalculation Re performance Analytical Procedures 4 .
MEANS OF TESTING Selecting all items (100% examination) Selecting specific items High value or key items All items over a certain amount Items to obtain information Items to test control activities The application of audit procedures to less than 100% of items within a class of transactions or account balance such that all sampling units have a chance of selection. Sample selection methods: ± ± ± ± Audit sampling Computerized random selection Systematic selection Haphazard selection Block selection 5 .
FACTORS INFLUENCING SAMPLE SIZE Factors Increase in the risk of material misstatement Increase in the tolerable error Increase in the amount of error Increase in the rate of deviation Increase in the auditor¶s required confidence level Increase in the number of sampling units Increase in the use of other substantive procedures Sample size Increase Decrease Increase Increase Increase Negligible effect Decrease 6 .
electronic media or other media. Audit Programs Include the nature. timing and extent of audit procedures to be performed by audit team members Obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level 7 .AUDIT DOCUMENTATION Purpose Enable auditor to ensure adequate completion of work Provide details of work done for future reference Assist in planning and control of future audits Encourage methodological approach and quality Working Papers The material prepared. obtained and retained by auditor in connection with performance of the audit Working papers may be in the form of data stored on paper. film.
AUDIT DOCUMENTATION Engagement letter Audit Planning Memorandum Risk Assessment Evaluation Assessment of internal audit Internal Controls Questionnaire Materiality Levels & Audit Sampling Audit Programs Physical stock count / Cash count Direct Confirmations Statutory Records Checklist Taxation Checklist Going Concern Review Financial and Production Analysis Financial statements disclosure checklist Audit Completion Checklist 8 .