Audit evidence

Audit evidence is information that the specialist received during the audit and on the basis of which he gave the final conclusion to the economic entity. As such documents can act primary accounting data, explanatory notes and explanations of employees of the organization, the results of inventory activities, financial statements of the client, data provided to the auditor by third parties.

All audit evidence must have the property of reliability and reliability. A questionable information is either subject to additional verification, or not at all considered as an argument. To directly obtain the required indicators, the auditor uses the testing of controls of on-farm activities and other verification procedures. Tests are for a specialist to talk about the rationality of the organization of the accounting system and control. The checks are essentially aimed at proving that there are errors or significant distortions.

The following types of audit evidence can be distinguished:

• External.
• Interior.
• Mixed.

External evidence includes information and data that the auditor receives from third parties. Internal evidence comes to a specialist because of the words of the economic entity or the firm's personnel. This information can be expressed both in written and oral form. A mixed type involves the provision of evidence by the client or employees of the company with the confirmation of third parties in writing.

In the event that the auditor uses documents from different sources that contradict one another, or the opinion of the staff is divergent, it is advisable to apply additional audit procedures. And if the inspector does not receive full information about the audited object due to the refusal of the legal entity itself, the auditor has all grounds for issuing a conclusion that is different from absolutely positive, or completing the report with a note about the lack of an information base.

Auditor's evidence is obtained by a specialist due to the application of a special check, which includes the main stages:

• Observation and study.
• Request and receive a response.
• Inventory.
• Recalculation.
• Analysis.

The study or inspection involves reconciling the records in the statements with the actual operations performed. The level of reliability and reliability of indicators in this case is dependent on the present and the effectiveness of internal controls.

Monitoring includes systematic monitoring of the work performed by employees of a particular department. The procedure for sending a request and receiving a response is to determine the specific information necessary to conduct a qualitative check. That is, the auditor sends a request for access to this data and waits for a positive or negative answer.

Inventory and recalculation allows the specialist to check the actual compliance of the indicators reflected in the documents and actually existing ones. The analytical analysis is carried out with the purpose of detection of distortions and definition of the concrete reason of occurrence of such situation.

Before choosing a particular method, the auditor should determine the sample size, that is, individual areas of application of methods and controls, or express an opinion on the need for continuous verification in the enterprise. In this case, the specialist must comply with federal audit standards, which include two basic obligations:

1. Certain areas of the accounting report selected by the sample should be an integral part of the general population, that is, correspond to the aspect by which the expert will make the final conclusion.
2. The sample should be a small copy of the population.

Thus, we can say that the audit evidence is an important element, confirming the reliability and accuracy of the expert's conclusions.