Question

• As an auditor, are you required to collect and retain evidence? Explain.

Answer 1

Auditing is primarily performed to expression an option on the financial information of any entity, Whether the financial statement is prepared in all material respects, in accordance with an applicable financial reporting framework and give a true and fair view.

To expression an option, Auditor should perform the substantive and analytical procedures which require collection and analysis of audit evidence. There we can say that as an auditor it is required to collect the audit evidence. Audit procedures to obtain audit evidence:-

1. Inspection - Inspection involves examining records or documents, Whether internal or external, in paper form, electronic form, or other media, or a physical examination of an asset

2. Observation:- Observation consists of looking at a process or procedure being performed by other, for example, the auditor's observation of inventory counting by the entity's personnel, or of the performance of control activities.

3. External Confirmation:- An external confirmation represents audit evidence obtained by the auditors as a direct written response to the auditor from a third party(confirming party), in paper form, or by electronic or other media.

4. Recalculation:- Recalculation consists of checking the mathematical accuracy of documents or records. Recalculations may be performed manually or electronically.

5. Reperformance; Reperformance involves the auditor's independent execution of procedures or controls that were originally performed as part of the entity's internal control.

6. Analytical procedures: Study of plausible relationships among both financial and non-financial data.

7. Inquiry; Inquiry may range from formal written inquiries to informal oral inquiries.

Such Audit evidence collected will be "Audit Documentation". As per Law and regulation, Audit documentation should be retained with an auditor for a retention period for audit engagements ordinarily is no shorter than 7 years from the date of the auditor's report. These Audit evidence can be used for future references in future audit engagements.

Hence As an auditor, it is required to collect and retain evidence.