4th Chapter
Q. What is audit evidence? Discuss the objective of audit evidence.
Ans : Audit evidence is the fundamental concept
in auditing . Audit evidence is referred to as evidential matter corroborating
information available to the auditor.
All
the information used by the auditor in arriving at the conclusion on which the
audit opinion is based and includes the information wintered statement and
others information .
The objectives of audit evidence are
stated below :
1.
To enable the
auditor to express an opinion rather than finance statement are prepared in all
material objects.
2.
To enable the
auditor to arrival at a conclusion which will become a basis for audit opinion.
3.
To enable the
auditor to disclose whether he has obtain or has been provided with sufficient
evidence.
Q. What are the types the of audit evidence?
Ans
: Audit evidence is the fundamental concept used by the auditor to arrived at a
conclusion . The type of audit evidence are stated below :
1.
Analytical evidence : Analytical evidence
involves the comparison of current period date.
2.
Documentary evidence : Documentary is the auditors examination of the clients documents
that should be in the financial statement.
3.
Written presentation : Written presentation are the responses to enquires by
the auditor by the responsible persons inside or outside the organization.
4.
Mathematical evidence : Mathematical evidence results from recalculation by
the auditor and a comparison of those results with the calculation provided by
the organization.
5.
Oral evidence : Oral evidence originates from the oral enquires made
by the auditor to the official and key employees of the organization.
6.
Physical evidence : Physical evidence is the inspection or count by the auditor of al tangible
assets.
7.
Visual and electronic evidence : The video copies of several interviews may be as visual evidence .Electronic
evidence is any information preduce or maintained by electronic means.
8.
Confirmation ‘s : Confirmation constitute a special class of documentary evidence
involving direct written responses by knowledgeable third port’s to specific request
for factual information.
Q.. What is audit procedure? What are the types of
audit procedure?
Ans: Audit procedure are the
techniques acts performed or the method or techniques wed by the auditor to
gather and evaluate audit evidence .they may be applied to the underlying
accounting date or the process of obtained and evaluating corroborating
information .
They are ten types of audit procedure those are
mentioned below :
1.
Analytical procedure : Analytical
procedure consists of study and comparison of relationship among data .This
procedure produce analytical evidence.
2.
Inspecting :
Inspecting involves careful
scruting or detailed examination of documents and records
and physical examination of tangible resources .This procedure is used extensively in auditing.
3.
Confirming :
Confirming is to the form of enquiry that enables the auditor to obtain to information directly form an independent source outside the client
organization.
4.
Enquiring :
Enquiring involves either oral or written enquiring auditor .Enquiry produce
either oral evidence or evidence in the form of written representation.
5.
Counting :
The two most common application 0f country are -
a. The physical
counting of tangible resource
b. Accounting for all renumbered document
6. Tracing : In tracing the auditor selects document created
when transaction are executed and determines that information form the document
is properly recorded in the accounting
records.
7.Observing : Observing
pertains to watching or witnessing the performance of some activity or process.
8.
Re-performing : A major application
of his procedure is reperfoming calculation and reconciliation made by the
client .Mathematical evidence is produced by this produce
Q. What are the objectives of audit procedure ?Or What
are the classification of audit procedure on the basis of purpose or objectives?
Ans : Audit procedure are the
technique used by the audit to gather and evaluate audit evidence the
objectives of audit evidence are given blow –
1.
Procedure of obtain an understanding : The standards
of field work requires the auditor to
obtain an understanding of the client
internal control structure polices and procedure.
2.
Test of control : Test of control are the made
to provide evidence about the effectiveness of the design and operation of internal control structure
polices and procedure.
3.
Substantive Test : Substantive test consist of
a.
Analytical
procedure
b.
Test of details
of transaction
c.
Test of details
of balance .
Q What is working paper? What are the
objectives of working paper?
Ans
: Working paper are those paper which contain essential facts about account s
so that the auditor may have again to go over the accounts of his clients in
case he wants to refer to them later during the course of his audit .
The
objectives of working paper are giving
blow ---
Coordination of work :
1.
In order to
support the auditors report ,this papers show in details the work performed by
the audit clerks.
Measurement of efficiency
2.
The auditor can
from an opinion about the efficient or otherwise of the audit clerks.
Use
as documentary Evidence
3.
Working paper
considered as the permanent record and auditor can defined himself in case of
suits against him.
Arrangement
for Training :
4.The preparation of working papers is
a means to gives training to the audit clerk as the work done by them.
Quick
submission of report :
5.
The working paper enable to prepare the report be issued without mass waste of
time.
Knowing
about compliance of order :
6.He
can know that his assistants had follower his instruction.
Assistance
in future audit :
7.Future
audit work can be carried on some sequence on the basis of the previous working
papers.
8.
Informing the authoress about error and commission .
9.
Assistance for preparation of audit working paper.
10.
Decreased in risk.
Q. Write down the essential requirement
of good working papers.
Ans : The essential requirements of good
working paper are as follows.
1)
Completeness : They should contain all essential information
so that they may be maximum utility.
2)
Organization and arrangement : For getting
maximum utility the document should be proper organized and arranged.
3)
Clearness : The facts in the working paper should be
set out clearly.
4)
Easily Understand :The facts stated should be easily understand by the reader.
5)
Quality paper : Paper used for working paper should be good quality
so that it may not be damaged.
6)
Size : Paper
used should be convenient and uniform
size.
7)
Proper
arrangement : Paper should be arrange together in a logical order.
8)
Space :
Sufficient space should left after each note so that any decision taken by the
auditor may be note in that space.
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