How to Gather Audit Evidence? (Procedures to Obtain The Evidence)

 Audit procedures to gather audit evidence can include inspection, observation, confirmation, recalculation, re-performance, and analytical procedures, often in some combination, additionally to an inquiry.

Audit evidence is all the knowledge employed by the auditor in arriving at the conclusions on which the audit opinion is predicated and includes the knowledge contained within the accounting records underlying the financial statements and other information. Auditors aren’t expected to look at all information that will exist.

Procedures for Gathering Audit Evidence

There are some common ways of obtaining sufficient appropriate audit evidence to support the conclusion on truth and fair view of the financial statements.

Auditors used different methods of collecting audit evidence. External confirmation procedures frequently are relevant when addressing assertions related to certain account balances and their elements.

1) Documentation

Documentation is that the auditor’s examination of the client’s documents and records to substantive knowledge should be included within the financial statements.

The documents examined by the auditor are the records employed by the client to supply information for conducting its business in an organized manner.

Because a minimum of one document generally supports each transaction within the client’s organization, there’s an outsized volume of this sort of evidence available.

2) Inspection

The inspection involves examining records or documents, whether internal or external, in paper form, electronic form, other media, or a physical examination of an asset.

Inspection of records and documents provides audit evidence of varying degrees of reliability, counting on their nature and source, and, within the case of internal records and documents, on the effectiveness of the controls over their production.

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An example of inspection used as a test of controls is the inspection of records for evidence of authorization.

3) Observation

Observation consists of watching a process or procedure being performed by others, for instance, the auditor’s observation of inventory counting by the entity’s personnel or the performance of control activities.

Observation provides audit evidence about the performance of a process or procedure. Still, it is restricted to the purpose in the time at which the observation takes place and that the act of being observed may affect how the method or procedure is performed.

4) External Confirmation

An external confirmation represents audit evidence obtained by the auditor as an immediate written response to the auditor from a 3rd party (the confirming party), paper form, or electronic or another medium.

5) Recalculation

Recalculation consists of checking the mathematical accuracy of documents or records. Recalculation could also be performed manually or electronically.

6) Re-performance

Re-performance involves the auditor’s independent execution of procedures or controls originally performed as a part of the entity’s control.

7) Physical examination

Physical examination means physical verification of an asset, like stocks, investment certificates, and glued assets, as evidence of its existence and condition.

8) Third-party confirmation

Confirmation of an amount or other information shown within the client’s records by an independent third party provides reliable evidence of the existence of the quantity and correctness of the knowledge because the case could also be—for instance, receivables, payable, contingent liabilities, a stock with third parties, etc.

9) Examination of original records

Original records like ownership documents, bills, notices, etc., provide reliable and conclusive evidence of the legal claims, transactions, balances, etc.

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10) Re-computation

 The Re-computation technique is applied to prove the arithmetical accuracy of a transaction and verify that the computation follows the principles, procedures, and acceptable practices.

The areas where re-computation techniques are generally applied include depreciation computations, bonus calculations, provisions, etc.

11) Inquiry

 Inquiry consists of seeking information from knowledgeable persons, both financial and non-financial, within the entity or outside the entity.

The inquiry might not provide conclusive audit evidence, but it will give some clues that can cause further verification.

12) Analytical Procedures

Analytical procedures contain evaluations of monetary information through analysis of plausible relationships among financial also as non-financial data.

Analytical procedures also encompass the investigation of identified fluctuations or relationships inconsistent with other relevant information or differ from expected values by a big amount.


It’s a good idea to remain on top of those processes even when you are not facing an audit. This may assist you in maintaining good operational safeguards that will protect you in an audit and make the method go smoothly.

Actively search for positive evidence of things the corporate is doing right. The audit report will be better received if the auditor can point to practices or policies that are working.

Make notes in audit reports as specific as possible. Therefore the company can implement new policies and procedures to deal with the matter.