Terms and Types of Evidence

Physical Examination

Inspection or count by the auditor of a tangible asset.

Most often associated with cash and stock, but it is also applicable to the verification of securities, tangible fixed assets and notes receivable.

Confirmation

The receipt of a written or oral response from an independent third party. Auditor has client request that the third party respond directly to the auditor.

Documentation

Examine supporting evidence in client files.

It has two types of document which are internal documents and external documents

-Internal documents is prepared and used within client organization and does not go outside party.

-External documents has been in hands of an outside party to the transaction and it is more reliable than internal documents.

Analytical procedures

Uses comparisons and relationships to other data appear reasonable compared to the auditor's expectation or assess whether account balances.

An auditor may compare the gross margin in the current year with the preceding years.

Recalculation

Involves rechecking a sample of calculations made by the client.

Rechecking client calculations consists of testing the client's arithmetical accuracy.

Reperformance

Is the auditor's independent tests of client accounting procedures or controls that were originally done as part of the entity's accounting and internal control system.

Published by : Kelvin Ngooi Zhan Lean

Reference Link :

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