1. CHAPTER 6
AUDIT EVIDENCE

2. AUDIT EVIDENCE DECISIONS
AUDIT PROCEDURES (NATURE)
SAMPLE SIZE (EXTENT)
ITEMS TO EXAMINE
TIMING
AUDIT PROGRAM

3. PERSUASIVENESS OF EVIDENCE
RELEVANCE
RELATED TO ITEM BEING EXAMINED
COMPETENCE
INDEPENDENCE OF PROVIDER
EFFECTIVENESS OF INTERNAL CONTROLS
AUDITOR’S DIRECT KNOWLEDGE
OBJECTIVITY OF EVIDENCE

4. SUFFICIENCY QUANTITY OF EVIDENCE RELATIONSHIP TO COMPETENCE TIMING
EXPECTATION OF MISSTATEMENTS
EFFECTIVENESS OFINTERNAL CONTROLS
REPRESENTATIVENESS OF ITEMS SELECTED
RELATIONSHIP TO COMPETENCE
MORE COMPETENT, LESS NEEDED
TIMING
INTERIM
YEAR END

5. TYPES OF EVIDENCE PHYSICAL EXAMINATION CONFIRMATION COUNTING CASH
EXAMINING DOCUMENTS
OBSERVING INVENTORY
CONFIRMATION
WRITTEN OR ORAL COMMUNICATION
THREE TYPES
POSITIVE - BLANK
POSITIVE - INFORMATION PROVIDED
NEGATIVE

6. DOCUMENTATION EXAMINATION OF DOCUMENTS SUPPORTING AUDIT OBJECTIVES
EXTERNAL DOCUMENTS
INTERNAL DOCUMENTS
VOUCHING
GOING FROM RECORD TO DOCUMENTS
TESTS EXISTENCE
TRACING
GOING FROM DOCUMENTS TO RECORD
TESTS COMPLETENESS

7. ANALYTICAL PROCEDURES
OBSERVATION
AUDITOR LOOKING TO VERIFY EXISTENCE
INQUIRIES OF CLIENT
ORAL OR WRITTEN
MUST BE SUPPORTED BY CORROBORATING EVIDENCE
REPERFORMANCE
AUDITOR RECALULATES
ANALYTICAL PROCEDURES
COMPARISONS AMONG AND BETWEEN DATA

8. RELIABILITY OF EVIDENCE
THREE PRESUMPTIONS
AUDITOR KNOWLEDGE USUALLY HIGHEST
OUTSIDE EVIDENCE USUSALLY HIGHER THAN INTERNAL EVIDENCE
STRONG INTERNAL CONTROL BETTER THAN WEAK
COST USUALLY VARIES DIRECTLY WITH RELIABILITY

9. TERMS USED IN AUDIT PROCEDURES
EXAMINE - DETAILED STUDY OF ITEM
SCAN - OVERVIEW OF ITEM
COMPUTE - AUDITOR CALCULATION
RECOMPUTE - AUDITOR REDO CLIENT
FOOT - ADD COLUMN
TABLE 6-6, PAGE 190

10. ANALYTICAL PROCEDURES
PURPOSES OF ANALYTICAL PROCEDURES
UNDERSTAND CLIENT BUSINESS
ASSESS ABILITY TO CONTINUE IN BUSINESS
ATTENTION DIRECTOR
POSSIBLE MATERIAL MISSTATEMENTS
REDUCTION OF DETAILED TESTS
NO UNUSUAL FLUCTUATIONS
ANALYTICAL PROCEDURES ARE USUALLY LOWER COST

11. TIMING OF ANALYTICAL PROCEDURES
PLANNING PHASE
REQUIRED
UNDERSTAND
ASSESS GOING CONCERN
POSSIBLE MISSTATEMENTS
REDUCE DETAILED TESTS
TESTING PHASE
NOT REQUIRED
MISSTATEMENTS
REDUCE TESTING
COMPLETION PHASE

12. TYPES OF ANALYTICAL PROCEDURES
COMPARE CLIENT DATA WITH
INDUSTRY DATA
PRIOR PERIOD DATA
CLIENT-DETERMINED RESULTS
AUDITOR-DETERMINED RESULTS
EXPECTED RESULTS