Accounting: Seven specific audit procedures auditors should know

2022-05-16 0 By

1, inspection inspection refers to the audit personnel to audit internal or external generated records and documents in the form of paper, electronic or other media, or physical examination of assets.This procedure is applied in all audit phases.The inspection procedure has directionality, for example, in the execution of drawing, the auditors should not only check the inventory to the inventory count record in accounting practice, but also check the inventory from the inventory count record, instead of just carrying out one-way spot check.2, observation observation refers to the audit personnel to view the activities or procedures that the relevant personnel are engaged in.To put it bluntly, it is to stare at the side and see what the auditee has done and how it has done it.However, the observation procedure obtains the evidence at the point in time, and the behavior of the observed personnel may be affected by the observation, so the observation procedure only implemented often cannot obtain sufficient and appropriate audit evidence.3. Inquiry Inquiry refers to the process in which auditors obtain financial and non-financial information from internal or external insiders of the auditee in written or oral manner, and evaluate the replies.The inquiry procedure is suitable for the whole audit process, which requires the auditors’ communication and expression ability.Confirmation Confirmation refers to the process in which auditors directly obtain written replies from a third party as audit evidence. Written replies can be in the form of paper, electronic or other media.The confirmation procedure shall apply in the following cases: 1.For the identification related to a particular account balance and its items;2.There is a risk of misstatement in the agreement and transaction terms between the auditee and a third party;3.Obtain audit evidence that does not exist.5. Recalculation Recalculation is when an auditor checks the accuracy of a calculation of data in a record or document.Sometimes auditors cannot fully trust the results of the audited company and need to recalculate in person. Recalculation can be carried out manually or electronically.6. Re-execution Re-execution refers to the independent execution by auditors of procedures or controls that were originally part of the internal control of the auditee.The re-execution program is mainly used in control tests.7. Analytical Procedure The analytical procedure refers to the evaluation of financial information by auditors by analyzing the internal relationships between different financial data and between financial data and non-financial data.This procedure is somewhat similar to financial analysis, in which the risk of misstatement is inferred by analyzing whether the financial indicators or non-financial information of the auditee is reasonable.