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AUDIT EVIDENCE AND PROCEDURES, 4) Observation, 7) Recalculation, 8)…

- - - - Measure of the quantity of audit evidence such as a sample size of documents that the auditor will review or the number of observations of a control activity.
        
        Sample Size
        
        Substantive Tests
        
        The auditor considers clients factors such as the risk of material misstatement when determining sample size for substantive test
        
        Tests of Control
        
        The extent of evidence necessary to persuade the auditor that the control is effective depends upon the risk associated with the control.
    - - Relevance
        
        Determines whether the evidence provides insight on the validity of the assertion the auditor is testing
        
        Related to the connection between the audit procedure being performed and the assertion being audited.
      - Reliability
        
        Refer to its ability to provide convincing evidence related to the audit objectives being evaluated
        
        Internal Documentation
        
        The reliability is influenced by the effectiveness of internal controls over the documents
        
        It includes legal, business, accounting, planning and control types of documents
        
        External Documentation
        
        Highly reliable, but the reliability depending on whether the documentation is prepared by a knowledgeable and independent outside party and is received directly by auditor
- - - - Inspection
        
        Examining records or documents or inspection or counting physical : assets
      - Observation
        
        The auditor looking at a process or procedure being performed by others
      - Analytical procedures
        
        Evaluations or comparisons of financial information through analysis of plausible relationships among financial and non-financial data
      - Enquiries of management and others (including enquiries relating to fraud
    - - Test of controls
        
        The audit procedures designed to evaluate the operating effectiveness of internal controls in preventing or detecting and correcting material misstatements at the assertion level
        
        1) Inspection of relevant documentation
        
        2) observation of the entity operations
        
        3) Inquiries of appropriate personel
        
        4) Reperformance of the application of the control
      - Substantive procedures
        
        The audit procedures designed to detect material misstatements at the assertion level
        
        Test of details
        
        Test of transactions
        
        Test of ending balances
        
        Substantive analytical procedures
  - - - Class of transactions:
        
        Occurrence
        
        transactions and events and other matters that have been recorded actually took place
        
        Completeness
        
        all transactions have been recorded in the financial statements
        
        Accuracy
        
        amounts and other data relating to transactions and events have been recorded at the correct amounts
        
        Cut-off
        
        transactions and events have been recorded in the correct accounting period
        
        Classification
        
        Financial information is appropriately presented and disclosed using simple language and state matters clearly and concisely.
      - Account balance
        
        Existence
        
        assets, liabilities and equity interests are physically present/belong to the entity on the reporting date.
        
        Rights and obligations
        
        entity has a right to its assets and is free to use or dispose of the assets as it sees fit.
        
        Completeness
        
        All transactions that were supposed to be recorded have been recognized in the financial statements.
        
        Valuation and allocation
        
        that all items have been included in the financial statements at appropriate amounts
      - Present and disclosure
        
        Occurrence
        
        Transactions and events disclosed in the financial statements have occurred and relate to the entity.
        
        Completeness
        
        All transactions, balances, events and other matters that should have been disclosed have been disclosed in the financial statements.
        
        Classification and understandability
        
        Disclosed events, transactions, balances and other financial matters have been classified appropriately and presented clearly in a manner that promotes the understandability of information contained in the financial statements.
        
        Accuracy and valuation
        
        Transactions, events, balances and other financial matters have been disclosed accurately at their appropriate amounts.
  - - - Risk associated with account
      - Effectiveness of internal control
      - Nature of the account
      - Availability if audit staff
  - - - Physical examination of records or documents
    - - Written or oral enquiry to gather evidence
    - - obtain evidence from independent third party outside the client
    - - Evaluate the plausibility of financial information
    - - Verify the existence of PPE, inventory, livestock etc