Topics: Invoice, Audit, Auditing Pages: 4 (702 words) Published: May 16, 2013

Chapter 7: Audit Evidence I. Definition: Evidence – information used by the auditor to draw conclusions on the fair presentation of the financial statements. Audit objectives suggest the types of evidence to accumulate. II. Decisions on evidence accumulation A. Which audit procedures to use. General Objectives: Six TRAOs Eight BRAOs Four PDAOs Accounting Cycles: Five

Management Assertions

Specific Objectives: At least: Six TRAOs Eight BRAOs Four PDAOs

Audit Procedures: At least one and likely more for each specific TRAO, BRAO, PDAOs

Audit procedures frequently “cover” more than one audit objective! Select a sample of sales invoices and trace to the shipping document agreeing name and quantity.

Preparation Question: What is an audit procedure?

B. What sample size to select for a given procedure. C. Which items to select from the population. D. When to perform the procedures (timing). III. Audit Program Preparation Question: What is an audit program?

IV. Persuasiveness of evidence
Which audit procedures:

A. Appropriateness 1. Relevance
Example: Trace from sales invoices in the Sales Journal to shipping documents. B. Reliability 1. Independence of provider – 2. Effectiveness of client’s internal control structure (strong vs. weak) 3. Auditor’s direct knowledge 4. Qualifications of provider 5. Objectivity What sample size and which items: C. Sufficient 1. Likelihood of misstatements 2. Quality of internal control When to perform D. Timeliness Other factors: E. Combined effect F. Cost


V. Type of Evidence Preparation question: Enter key words that define each of the types of evidence listed. Type Definition Grade 1. Physical examination

2. Confirmation 3. Documentation: External Internal – good Internal – bad 4. Analytical procedures: Tailored Broad 5. Inquiries of the client

6. Recalculation 7. Reperformance 8. Observation In-class exercise: Audit Procedure 1. Examine supporting documents for cash disbursements several...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • audit of banks Essay
  • the night audit procedure Essay
  • Essay about Goodner Brothers Audit Case
  • Audit Essay
  • Essay about Audit
  • Audit Report Essay
  • Tax Audit Essay
  • Essay about Audit Communications

Become a StudyMode Member

Sign Up - It's Free