An audit is a necessary requirement for business and non-business organizations across the globe. The purpose is to ensure if they are complying with the rules and regulations set by the government authorities. The auditors prepare the report and present it to the authorities. However, it is only applicable if it is backed by evidence.
Common Types of Audit Evidence
Here are the most common types of audit evidence, on the basis of which the authorities can clear the audit status of any organization:
- Accounting information
- Financial statements
- Management Accounts
- Bank accounts
- Payrolls Listing
- Fixed Assets Register
- Bank confirmation
- Banks Statements
An important point to note here is that producing the audit evidence in front of the authorities is not enough. The evidence should be gathered through the right channel and set procedures to be considered valid. The method or ways used to obtain the evidence are termed audit evidence procedures and are critically important in ensuring the validity of the audit report.
Keep scrolling down this article to explore a comprehensive guide about audit evidence procedures and check if your internal auditors are following the right path.
Top 7 Audit Evidence Procedures Every Organization Should Know
The confidential information that highlights the position, credibility, and transparency of any organization can only hold importance if it is gathered by using the right methods. This is the major reason the audit evidence procedures are given much importance. Knowing about these procedures is critical for the organizations to know if the auditor is working within his/her boundaries or trying to harm the organization in some way.
Here are the top audit evidence procedures every organization should know about to ensure their audit report will not get remarks of being invalid.
1. Physical Examination
The very first audit evidence procedure you should be aware of is the physical examination. The auditors can inspect the physical and nonphysical assets of any organization to gather evidence about their status or value. In order to avoid any scam or lingering threat, most organizations hire the services of the top audit firms in Dubai and ensure that certified and experienced auditors are handling their cases.
2. Analytical Procedures
The second audit evidence procedure trained auditors often imply is the analytical procedure. The analytical procedure is used to derive the data, as well as check its correctness. The certified auditors can also utilize comparisons and calculations among different data sets to check and verify the audit evidence.
Documents are one of the most common and essential audits evidence procedures that the certified auditors can use to check the status of any organization. These documents can include the invoices, policy documents, contracts, and other documents that highlight the dealings of the organization with clients, vendors, or any other service provider.
At times, business organizations can manipulate their balance sheets or financial statements, which will convey the information of their choice to the auditors. However, the auditors can use the audit evidence the procedure of confirmation to contact the third parties or the party mentioned in specific dealing and check their side of the record to prove the validity or invalid status of evidence.
Another commonly used audit evidence procedure the auditors can use and organizations should know about are inquiries. If the auditors have concerns and doubts while checking the documents, records, receipts, or any other material, they can question the concerned person about that matter. If that person fails to satisfy their doubts, it can negatively impact the audit report.
Auditing is an extensive process. Especially in the case of calculations, the auditors have to explore and check every major and minor calculation of the set time period. Being a human, mistakes are inevitable. So, the auditors can use the audit evidence procedure of recalculation to check the mathematical accuracy of the included documents and records.
Lastly, Reperformance is another audit evidence procedure that the auditors can utilize. It highlights the authority of the internal auditor over the procedure and controls of the process in order to prepare and share the report. If you are suspicious of your internal or external auditor, it is better to hire experts from the top audit firms in Dubai and get a transparent and unbiased audit report that sheds light on your financial health and status.
Read also: Benefits of Remote Bookkeeping Services for Small Businesses
Know the basics to get a better audit evaluation!
If you or your organization is not aware of the quality audit process in detail, you can fall victim to fraudulent activities too. Knowing about the audit evidence procedures will help you comply with the external auditors and assist the internal auditors in performing their responsibilities transparently. However, if you are doubtful if your confidential data is in safe hands, it is much better to contact expert auditors and let them take charge of the whole process without having to worry about troubling consequences.