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Types of Audit Evidence

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Auditors must gather a combination of many types of audit evidence to best reduce their audit risk. There are seven major types of audit evidence: 1) accounting information system, 2) documentary evidence, 3) third-party representation, 4) physical evidence, 5) computations, 6) data interrelationships, and 7) client representations.

User Kashia
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Final answer:

Auditors use a variety of audit evidence types to reduce audit risk such as accounting information systems documentary evidence third-party representation, and more.

Step-by-step explanation:

Auditors gather a combination of different types of audit evidence to reduce audit risk. The seven major types of audit evidence are:

  1. Accounting information system: This includes examining the organization's financial records and systems for accuracy and reliability.
  2. Documentary evidence: This includes verifying the existence and accuracy of physical documents such as invoices, contracts, and receipts.
  3. Third-party representation: This involves obtaining confirmations or statements from external parties such as customers, suppliers, or banks to validate the information provided by the client.
  4. Physical evidence: This refers to inspecting tangible assets, inventory, or properties to verify their conditions and existence.
  5. Computations: This involves performing calculations to verify the accuracy of financial data and numerical information.
  6. Data interrelationships: This includes analyzing the relationships and consistency among different sets of data or financial information.
  7. Client representations: This refers to obtaining written or oral confirmations from the client regarding the accuracy and completeness of the information provided
User Stuart Helwig
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