Audit Procedures and Evidence

An auditor's questioning mind is essential in the audit process because it enables them to gather conclusive evidence.

RIORICA is an acronym that represents the different types of evidence an auditor can gather during an audit.

Analytical procedures are used to examine financial ratios and identify unusual transactions.

Client testimony is considered a reliable source of evidence because clients have no incentive to mislead auditors.

An auditor's independence is essential to ensure that the audit is conducted without bias.

Sufficient evidence is more important than appropriate evidence in an audit.

The audit objective is to express an opinion on the financial statements.

Only external evidence is considered reliable in an audit.

Competence is not essential for an auditor to be considered independent.

Relevance is not a factor in determining the quality of evidence in an audit.

Audit Procedures and Evidence

An audit program includes nature, timing, and extent of audit procedures for a given audit
Audit procedures are performed at different times, such as monthly or at the end of the year

Persuasiveness of Evidence

The persuasiveness of evidence is determined by two factors: appropriateness and sufficiency
Appropriateness depends on relevance and reliability of evidence
Relevance of evidence is related to the audit objective, such as verifying the existence of cash
Reliability of evidence is dependent on the independence of the provider and the credibility of the individual providing the evidence

Characteristics of Persuasive Evidence

Persuasive evidence is not conclusive, but rather reasonable assurance
Human limitations and cost-benefit considerations contribute to the limitations of evidence
Appropriateness and sufficiency are both necessary for persuasive evidence

Types of Audit Evidence

There are eight types of evidence used in auditing: reperformance, inquiry, observation, recalculation, inspection, confirmation, analytical procedures, and client testimony
Each type of evidence is used to gather sufficient and appropriate evidence to support the audit opinion
Types of evidence can be categorized into oral evidence, physical evidence, and other forms of evidence

Competence and Independence

Auditors must be competent and independent to obtain sufficient and appropriate audit evidence
Competence includes knowledge of auditing standards, criteria, and types and amounts of evidence required
Independence ensures that the auditor is free from bias and conflict of interest

Test your understanding of audit procedures, including the timing and extent of audits, and the characteristics that determine the persuasiveness of evidence. Covers audit programs and standards.