What Are the Types of Audit Evidence?

What Are the Types of Audit Evidence?

The Objectives of Audit in Malaysia

The auditor is to form an opinion on whether the account is truly and fairly stated. This opinion comes in the form of an audit report, which is an official document from auditors presenting their opinion about the financial statements of the client.

Auditors need to perform specific procedures on all material items in the financial statements.

Auditors carry out these procedures during the audit to ensure all the assertions related to a financial statement item are correct. By checking these assertions, auditors can form an opinion about each individual item of financial statements.

Once auditors cover all the material aspects of the client’s financial statements, they can present an opinion and provide an audit report. However, to support their opinion, auditors must gather audit evidence.

Audit Evidence

Audit evidence consists of both information that supports and corroborates management's assertions regarding the financial statements or internal control over financial reporting and information that contradicts such assertions.

Audit Procedures

  • Inspection - Inspection involves examining records or documents, whether internal or external, in paper form, electronic form, or other media, or a physical examination of an asset.

  • Observation - Observation consists of looking at a process or procedure being performed by others.

  • External Confirmation - An external confirmation represents audit evidence obtained by the auditor as a direct written response to the auditor from a third party.

  • Recalculation - Recalculation consists of checking the mathematical accuracy of documents or records.

  • Reperformance - Reperformance involves the auditor’s independent execution of procedures or controls that were originally performed as part of the entity’s internal control.

  • Analytical Procedures - Analytical procedures consist of evaluations of financial information through analysis of plausible relationships among both financial and non-financial data.

  • Inquiry - Inquiry consists of seeking information of knowledgeable persons, both financial and non-financial, within the entity or outside the entity.

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