CHAPTER 6 AUDIT EVIDENCE

AUDIT EVIDENCE DECISIONS AUDIT PROCEDURES (NATURE) SAMPLE SIZE (EXTENT) ITEMS TO EXAMINE TIMING AUDIT PROGRAM

PERSUASIVENESS OF EVIDENCE RELEVANCE RELATED TO ITEM BEING EXAMINED COMPETENCE INDEPENDENCE OF PROVIDER EFFECTIVENESS OF INTERNAL CONTROLS AUDITOR’S DIRECT KNOWLEDGE OBJECTIVITY OF EVIDENCE

SUFFICIENCY QUANTITY OF EVIDENCE RELATIONSHIP TO COMPETENCE TIMING EXPECTATION OF MISSTATEMENTS EFFECTIVENESS OFINTERNAL CONTROLS REPRESENTATIVENESS OF ITEMS SELECTED RELATIONSHIP TO COMPETENCE MORE COMPETENT, LESS NEEDED TIMING INTERIM YEAR END

TYPES OF EVIDENCE PHYSICAL EXAMINATION CONFIRMATION COUNTING CASH EXAMINING DOCUMENTS OBSERVING INVENTORY CONFIRMATION WRITTEN OR ORAL COMMUNICATION THREE TYPES POSITIVE - BLANK POSITIVE - INFORMATION PROVIDED NEGATIVE

DOCUMENTATION EXAMINATION OF DOCUMENTS SUPPORTING AUDIT OBJECTIVES EXTERNAL DOCUMENTS INTERNAL DOCUMENTS VOUCHING GOING FROM RECORD TO DOCUMENTS TESTS EXISTENCE TRACING GOING FROM DOCUMENTS TO RECORD TESTS COMPLETENESS

ANALYTICAL PROCEDURES OBSERVATION AUDITOR LOOKING TO VERIFY EXISTENCE INQUIRIES OF CLIENT ORAL OR WRITTEN MUST BE SUPPORTED BY CORROBORATING EVIDENCE REPERFORMANCE AUDITOR RECALULATES ANALYTICAL PROCEDURES COMPARISONS AMONG AND BETWEEN DATA

RELIABILITY OF EVIDENCE THREE PRESUMPTIONS AUDITOR KNOWLEDGE USUALLY HIGHEST OUTSIDE EVIDENCE USUSALLY HIGHER THAN INTERNAL EVIDENCE STRONG INTERNAL CONTROL BETTER THAN WEAK COST USUALLY VARIES DIRECTLY WITH RELIABILITY

TERMS USED IN AUDIT PROCEDURES EXAMINE - DETAILED STUDY OF ITEM SCAN - OVERVIEW OF ITEM COMPUTE - AUDITOR CALCULATION RECOMPUTE - AUDITOR REDO CLIENT FOOT - ADD COLUMN TABLE 6-6, PAGE 190

ANALYTICAL PROCEDURES PURPOSES OF ANALYTICAL PROCEDURES UNDERSTAND CLIENT BUSINESS ASSESS ABILITY TO CONTINUE IN BUSINESS ATTENTION DIRECTOR POSSIBLE MATERIAL MISSTATEMENTS REDUCTION OF DETAILED TESTS NO UNUSUAL FLUCTUATIONS ANALYTICAL PROCEDURES ARE USUALLY LOWER COST

TIMING OF ANALYTICAL PROCEDURES PLANNING PHASE REQUIRED UNDERSTAND ASSESS GOING CONCERN POSSIBLE MISSTATEMENTS REDUCE DETAILED TESTS TESTING PHASE NOT REQUIRED MISSTATEMENTS REDUCE TESTING COMPLETION PHASE

TYPES OF ANALYTICAL PROCEDURES COMPARE CLIENT DATA WITH INDUSTRY DATA PRIOR PERIOD DATA CLIENT-DETERMINED RESULTS AUDITOR-DETERMINED RESULTS EXPECTED RESULTS