8 Types of Audit Evidence Flashcards

In a previous post, I offered up a brief survey of the types of audit evidence available to a manager. This time, I will present a more in-depth look at the 8 audit evidence types that can be used at various levels.

When you are starting out in the world of finance and auditing, you need to know the basics. And the best place to start is with the 8 types of audit evidence.

In this article, we will take a look at the different kinds of audit evidence, and discuss what each one is, who should use it, and why it should be used.

Home Accounting 8 types of audit information Flashcards

11. November 2020
Accounting Adam Hill

The working papers summarize your audit work, such as. B. Planning of the audit. For example, to support the conclusion that cash is accurately recorded in the balance sheet, you can create a table of all bank reconciliations and confirm that they match the balance sheet with no discrepancies. The Committee on Budgetary Control will meet on 7. The European Investment Bank’s (EIB) 2018 annual financial monitoring report will be voted on in the European Parliament plenary on 16 May. The committee will also vote on the 2018 EU Financial Protection and Anti-Fraud Report.

The income statement, balance sheet and other financial statements may be prepared from the accounting accounts included in the same balance sheet. support the content of the auditor’s report, including the auditor’s presentation of compliance with the standards of work in this area implied by reference in the auditor’s report to generally accepted auditing standards.

Working papers specifically prepared to assist the auditors in planning and performing the engagement, such as. B. Audit plans, internal control questionnaires and flow charts, time budgets, and engagement memoranda. The working papers help the auditor to allocate the time needed to carry out the various auditing procedures. The working paper helps the auditor to record the various issues discussed with the management during the audit. The auditor and the members of the audit team shall draw up working documents during the audit.

Before signing the engagement letter, the auditor must obtain information about the client, perform the necessary due diligence on the client, and assess whether to refuse or accept the engagement. In this case, the fact that the order has already been signed means that the evaluation has already been made and accepted. Audit working papers are documents that auditors prepare or use in the course of their work. These documents include a brief description of the nature of the client’s business, flow charts of the business processes, the audit programme, documents or information received from the client, and the documents used to review the audit.

Working papers are documents prepared by reviewers that summarize their work, including evidence, testing, and conclusions related to the audit objectives. An essential part of any audit engagement is the documentation that the auditors prepare to support their final report. In this lesson, we will discuss the importance of working papers and provide some best practices for writing working papers. The auditor can compile his own working documents for his files, audits and reports.

Credit notes, receipts and copies of invoices are prepared internally and verified by a third party only after review by the internal auditor. A trial balance is a list of all general ledger accounts (income and capital accounts) included in the company’s general ledger. This list contains the name of each nominal ledger account and the balance value of that nominal ledger account. Each ledger account will have a debit or credit balance. The debit values are shown in the debit column of the trial balance and the credit values in the credit column.

This is strong secondary evidence of the existence of unpaid receivables at the end of the audited reporting period. Documents drawn up by the organisation and requested from the organisation by the internal auditor. They enable the auditor to advise the client on improving internal controls and the effectiveness of the accounting system. Records that document the evidence gathered by auditors to demonstrate the work performed, the methods and procedures used, and the conclusions reached during the audit of the financial statements or other type of engagement.

Documents must be retained for a sufficient period of time to meet auditor requirements and professional record retention requirements. The auditor must maintain the confidentiality of the client’s affairs. Audit procedures performed by the auditor to detect material misstatements in account balances, transaction categories and disclosures. The risk that auditors unknowingly fail to properly adjust their audit opinion for financial statements that contain material misstatements.

Types of working papers

• The PCAOB establishes auditing standards and related professional practice standards that audit firms must adhere to when preparing and issuing audit reports.
• The current audit file contains information on audits carried out in the current period.
• Audit working papers also include the words or Excel files used by the auditors to document the key elements of internal control over financial reporting for the client, the nature of the transaction, and the working papers for the audit work.

The total amount in the table must correspond to the final balance of the balance sheet. A summary sheet (also known as a totals sheet) is a document that serves as a summary and index to the composition of items in the financial statements and related notes.

Although there are many types of working papers, three are the most common: Summaries of interviews, worksheets, and inventory documents. Each of these working papers documents documents different types of evidence and testing, but they should contain all the basic information. The source of the data/information, the explanation of the test or analysis performed, the name of the researcher who performed the test, the date of the test, the results, and the conclusions should always be included in each working document. The folder working documents are usually copies of transcripts with handwritten folder calculations. To ensure the accuracy of financial statements – not just the basic income statement and balance sheet, but also supporting statements – auditors can make a copy of these statements and then recalculate the totals.

Select a sample of key suppliers and send negative reviews to ensure they have actually provided goods or services. They are not part of the client’s financial statements and do not replace them. Working papers should be kept in a safe place with the auditor. Employees of the client or third parties should not have access to the working documents.

The working papers support the final audit report by summarising the evidence and conclusions used to formulate the recommendations and opinions in the final report. While the end product of the audit engagement is a well-written and understandable audit report, the working papers are the most important documents in an audit.

In addition, the auditor may receive documents produced by both audit clients and third parties. Working papers are usually received or prepared by staff or audit assistants. These documents are then reviewed by another, more experienced auditor, as well as by appropriate persons such as audit managers or audit partners. Examples of working papers include those used by auditors to record the nature of the client’s business, conduct due diligence on the client, and evaluate the client. For example, an auditor has contracted with an entity to audit its financial statements.

Audit working papers are also called control documents because they are a very important part of the audit work. These documents are supporting documents that help auditors draw conclusions about the financial statements. The reliability of supporting documents depends to a large extent on their origin and the route they took before being checked by the internal auditor.

A recent fact-finding mission to the Czech Republic, concerning reports of possible irregularities in the management and distribution of EU cohesion and agricultural funds, will also be discussed. Some of the auditor’s working papers may provide a useful source of reference for the client, but the working papers should not be considered a part of or a substitute for the client’s accounting records. Working documents are records kept by the investigator of the procedures followed, tests carried out, information obtained and the relevant conclusions drawn during the mission. Examples of working papers include audit programs, analyses, memoranda, letters of confirmation and representation, excerpts from business records, and statements or observations prepared or received by the auditor.

They show their work on a copy of the financial report and then record it as a working document. The standard requires the auditor to ensure that sufficient and appropriate audit documentation is obtained and to demonstrate this to relevant parties by documenting, recording and retaining audit documentation. Documents sent directly to the internal auditor by a third party are less reliable than documents created by the organization itself. If clients do not return confirmations to the auditor, the auditor may go to great lengths to obtain confirmations, given the high quality of this form of evidence. If no confirmation is received, the auditor’s next step is to examine subsequent cash receipts to determine whether customers have paid the unconfirmed invoices.

Which of the following uses of PSM standards would be most effective in solving the auditor’s problem? Make a list of all purchases over $10,000 to see if they are authorized. Sample all expenditures under $10,000 to determine if they are properly approved c. Select a sample of key suppliers and review supporting documentation for goods or services received. d.

What are the most common types of working documents?

Working papers. Working papers are a set of documents that the auditor collects during the audit of the client’s financial statements. Working papers are the evidence on which the auditor’s opinion of the client’s financial statements is based.

Content of working documents

The working papers are the link between the client’s files and the audited financial statements. The control documents are the result of the documentation process. Audit working papers are records of the various audit procedures carried out, the evidence obtained, the distribution of work among the members of the audit team, etc. Audit working papers are the documents and evidence collected and retained by the auditor during the audit.

What is the purpose of the working documents?

Although there are many types of working papers, three are the most common: Summaries of interviews, worksheets, and inventory documents. Each of these working papers documents documents different types of evidence and testing, but they should contain all the basic information.

Working documents can also take the form of data stored on tapes, films or other media. The summary schedule provides an overview of the general ledger accounts included in the various items of the financial statements and the notes thereto. In general, a master plan shall be drawn up for each balance sheet item or group of related items.

The rate at which a document drifts depends on the structure of the original document or the original intent of the document or the instructions to modify the document. The Internal Auditor is concerned about the possibility of fraudulent payments to fictitious suppliers. The Company’s authorized officers, who are responsible for the purchase of certain products, have been given the authority to approve expenditures up to $10,000.

It is called the main table because it is traditionally the first page of the relevant section of the file, with cross-references to the working papers and documents stored behind it. Auditing standards require the auditor to document sufficient, reliable, relevant and useful information to support the findings and conclusions of the audit engagement. To this end, detailed working papers are prepared for each audit assignment.There are two main types of evidence used in auditing: audit evidence and control evidence. Audit evidence is factual information that the auditor uses to ensure his or her findings are accurate. Control evidence is factual information to support the control environment used for the audit.. Read more about outline four 4 methods of obtaining audit evidence and provide a brief illustrative example of each and let us know what you think.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What are the 8 types of audit evidence?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” 1. Documentary evidence 2. Testimonial evidence 3. Physical evidence 4. Expert opinion 5. Statistical data 6. Financial statements 7. Computer records 8. Other Documentary evidence, Testimonial evidence, Physical evidence, Expert opinion, Statistical data, Financial statements, Computer records, Other”}},{“@type”:”Question”,”name”:”What is audit evidence and examples?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Audit evidence is any information that can be used to support the auditor’s opinion. Examples of audit evidence include: – Financial statements and related notes – Internal control over financial reporting documents, such as a risk assessment or internal control plan – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers”}},{“@type”:”Question”,”name”:”What describes some audit evidence?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Some audit evidence is a list of transactions that are not in accordance with the company’s policies.”}}]}

Frequently Asked Questions

What are the 8 types of audit evidence?

1. Documentary evidence 2. Testimonial evidence 3. Physical evidence 4. Expert opinion 5. Statistical data 6. Financial statements 7. Computer records 8. Other Documentary evidence, Testimonial evidence, Physical evidence, Expert opinion, Statistical data, Financial statements, Computer records, Other

What is audit evidence and examples?

Audit evidence is any information that can be used to support the auditor’s opinion. Examples of audit evidence include: – Financial statements and related notes – Internal control over financial reporting documents, such as a risk assessment or internal control plan – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers – Auditors’ work papers

What describes some audit evidence?

Some audit evidence is a list of transactions that are not in accordance with the company’s policies.