Question

Explain to a friend what you have learned about documentation and evidence. Be sure to detail why we need it and how we get it. Do not get too technical; they do not understand accounting or auditing. You may use a combination of formal terms, examples, and resources to support your answer.

Answer 1

Solutions:-

When it comes to evidence in auditing this is described as the information obtained from audit procedures and used by an auditor to determine if the information provided by the clients, is in accordance with the rules and regulations. The auditor uses all evidence gathered to help them make an opinion based conclusion.

Auditors must make a big decision when choosing the “appropriate types and amounts of evidence,” that will determine if the client’s financial statements are fairly stated. The first decision is “which audit procedures to use.” An audit procedure is a detailed instruction on obtaining sufficient appropriate audit evidence. Once the auditor selects an audit procedure, they can now determine the sample size and then decide which items in the population to test.

Audit documentation refer to the records or documentation of procedures that auditor performed, the audit evidence that they obtained and the conclusion that make by them based on the evidence obtain. Audit documentation is sometime called audit working paper or working paper.

Internal control documents that auditor prepare in words, excel, or other application is the example of audit documentation. Another best example that describe about audit documentation would be the working paper that auditor prepare to document and test depreciation expenses.

Audit documentation is very importance for audit especially in the areas of quality control. It is require by ISA that the audit documentation should be prepared in the form that others senior auditor who is not involve with the audit engagement previously could understand the work that perform when he review the documents.