Question

Hi , There are about 7 or 8 types of evidence considered in auditing.

For the company amazon, can you tell me where I can find those types of evidence

if in the balance sheet, can you name the evidence and give an example of it , Thanks

Answer 1

Audit evidences are the information used and relied upon by the auditor in order to form an audit opinion

There are following types of audit evidences :-

1. Physical examination = physical examination is the physically examining or counting of tangible assets of the company.

2. Confirmation = it is obtaining direct written response from a third party from which confirmation is required to verify the accuracy of information requested by the auditor .

3. Documentation = it is the collection & accumulation of important documentary evidence like invoice, correspondence etc. It may be internal or external . Internal document includes those documents which have been gathered directly from the company itself. External are the one which have been obtained from third party.

4. Analytical procedure = these are the mathematical procedures used upon by the auditor using comparisons and relationships between financial and non financial items to ensure that the data and the account balance confirms to audit expectation

5. Recalculation = recalculating various items to ensure the procedure obtained by the company to calculate them is proper.

6. Reporfamce = reperformance of procedure being already performed by the company.

7. Inquiries = inquiries is obtaining important information from the reasonably knowledge employees and officers of the company about some important aspects.

Note that you cannot find all these evidences specifically mentioned in the balance sheet . An auditor have to draw an idea from balance sheet, other financial and non financial information to gather all those evidence and then these evidences are put by him in his audit file which are known as audit working papers of auditor . There are two types of audit file one if permanent and the other one is current where all these evidences are kept as a basis of his opinion . And if in future any legal proceedings is initiated against auditor regarding carelessness in audit then he can show those evidences in the court to proof that he has obtained sufficient and appropriate audit evidences to base his opinion. You will infact not find these audit evidences in even the audit report. Generally a simple line is added in audit report that sufficient and appropriate audit evidences have been obtained to give opinion. Thus, you cannot find these audit evidences specificallyentioned neither in balance sheet nor in audit report. They are only docejter by the auditor as his working paper.

Hope this solves your query