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Unit 2.3, Identify Potential Sources
of Evidence, Identify information,…
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Identify information
Perf std 2310 - identify info
IA must identify sufficient, reliable, relevant, useful
info to achieve the engagem obj
- Sufficient
factual, adequate, convincing
-> prudent, informed person would reach the same conclusion as IA
- Reliable
sources from independent, corroborated by other info, direct, org doc
- Relevant
consistent with obj for the engagem
- Useful
help org meet its goals (add value, operation improvem)
Evaluating Relevance, Sufficiency,
Competence of Evidence
Relevancy, reliability (competence)
-> quality of audit evidence
Sufficiency
-> quantity of audit evidence
Reliability (Competency)
- obtain from knowledgeable independent sources outside the entity
- internally -> when related controls imposed by the entity
- in documentary form
- org document
Relevance
- logical, sensible relationships to an audit findings
- consistent with audit obj and support audit findings
Sufficiency
enough to persuade a reasonable person of the validity of the findings
Quantity of audit evidence affected by:
- Risk of misstatement - Greater risk, more audit evidence is required
- Quality (relevance & reliability) of audit evidence -
higher the quality, lesser of audit evidence is required
Gather audit evidence
Forms
- Manual
e.g. Inquiry, Observation, Inspect, Vouching,
Tracing, re-performance, analytical procedures,
Confirmation
- Computed-assisted Audit Techniques (CAATs)
- combination of both
Use observation to gather data
+ve
direct notice of things, events, and ppl's actions
watching body language in addition to words and actions
-ve
provide a snapshot of operations at one particular pt in time
X throughout the period under review
Ind can act diff when being observed
Internal Control Questionnaire
often very structured and detailed and is drafted in a yes/no / short-ans format
Pre-Interview Questionnaire
an efficient way of preparing for an interview if
properly design and transmitted in advance
provide an opportunity for engagem client self-evaluation
Sequence and Format
should be in a logical order,
short to increase the response rate
e.g. multiple-choice, checklists, fill-in-the-blank, essay,
options indicating lv of agree/ disagreem
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