审计学（英文）_07 AUDIT EVIDENCE

AUDIT EVIDENCE SOMETIMES THE MOST IMPORTANT EVIDENCE IS NOT FOUND IN THE ACCOUNTING RECORDS Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. AUDIT EVIDENCE 7 SOMETIMES THE MOST IMPORTANT EVIDENCE IS NOT FOUND IN THE ACCOUNTING RECORDS

Four evidence decisions d which audit procedures to use d What sample size to select for a given procedure d which items to select from the population d When to perform the procedures Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. ¶ Which audit procedures to use ¶ What sample size to select for a given procedure ¶ Which items to select from the population ¶ When to perform the procedures Four Evidence Decisions

rogan Audit program-Includes all audit procedures the audit considers necessary in the circumstances. Thinke PERCV Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Audit program - Includes all audit procedures the audit considers necessary in the circumstances. Think: P E R C V

TABLE 7-1 Characteristics of Evidence for a Scientific Experiment, Legal case and audit of Financial statements Scientific Experiment Basis of Involving Testing a an Accused Thiefe Legal Case Involv Audit of Financial Comparison Medicine Statements Use of the evidence Determine effects of using Decide guilt or innocence of accused Determine whether statements are the medicine fairly presented Nature of evidence Results of repeated Direct evidence and testimony various types of audit evidence use experiments witnesses and parties invol generated by the auditor, third parties, and the client Party or parties Scientist Jury and judge Auditor evaluating evidence Certainty of conclusions Vary from uncertain to Requires guilt beyond a reasonable High level of assurance from evidence near certainty Nature of conclusions Recommend or not Innocence or guilt of party Issue one of several alternative recommend use of medicine types of audit rep Typical consequences of Society uses ineffective or Guilty party is not penalized or Statement users make incorrect incorrect conclusions harmful medicine innocent party found guilty decisions and auditor may be frcm evidence Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Characteristics of Evidence for a Scientific Experiment, Legal Case, and Audit of Financial Statements TABLE 7-1

Persuasiveness of Evidence Relevance Independence of provider Competence Effectiveness of internal controls Sufficiency Auditors direct knowledge Qualifications of individual Timeliness Objective nature of evidence Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Relevance Competence • Independence of provider • Effectiveness of internal controls • Auditor’s direct knowledge • Qualifications of individual • Objective nature of evidence Sufficiency Timeliness

TYPES OF AUDIT EVIDENCE 1. Physical examination 2. Confirmation 3. Documentation 4. Observation 5. Inquiries of the client 6. Reperformance 7. Analytical procedures Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. TYPES OF AUDIT EVIDENCE 1. Physical examination 2. Confirmation 3. Documentation 4. Observation 5. Inquiries of the client 6. Reperformance 7. Analytical procedures

TABLE 7-3 Information often Confirmed Information Source Assets Cash in bank Bank Accounts receivable Customer Notes receiva ble Owned inventory out on consignment Consignee Inventory held in public warehouses Public ware house Cash surrender value of life insurance Insurance company Liabilities Accounts payable Creditor Notes payable Lender Advances from customers Customer Mortgages payable Mortgagor Bonds payable Bondholder Owners’Eui Shares outstanding Registrar and transferagent Other Information Insurance coverage Insurance company Contingent lia bilities Bank lender and client's counsel Bond indenture agreements Bondholder Collateral held by creditors Creditor Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. TABLE 7 - 3 Information Often Confirmed Information Source Assets Cash in bank Bank Accounts receivable Customer Notes receivable Maker Owned inventory out on consignment Consignee Inventory held in public warehouses Public warehouse Cash surrender value of life insurance Insurance company Liabilities Accounts payable Creditor Notes payable Lender Advances from customers Customer Mortgages payable Mortgagor Bonds payable Bondholder Owners’ Equity Shares outstanding Registrar and transfer agent Other Information Insurance coverage Insurance company Contingent liabilities Bank, lender, and client’s counsel Bond indenture agreements Bondholder Collateral held by creditors Creditor

TABLE 7-4 Competence to Types of Evidence Criteria to Determine Competence Effectiveness of Independence Type of Evidence of Provider Client's Internal Auditors Direct Qualifications objectivity Controls Knowledge of Provider of Evidence Physical examination High(auditor does) Varies High Normally high (auditor does) Confirmation High Not applicable Lo Varies-usually high High Documentation Varies-external more Varies Varies pendent than Observation High(auditor does) Normally high Medium Inquiries of client Low( client provides) Not applicable aries Varies-low to high Reperformance High(auditor does) Va High High(auditor does) High Analytical procedures High/low(auditor does/Varies client responds) ally high Varies-usually low (auditor does/

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Criteria to Determine Competence TABLE 7 - 4 Competence to Types of Evidence

FIGURE -2 Timing and purposes of Analytical Procedures Phase (Required) (Required) Purpos Planning Testing Completio Phase Phase Phase Understand client's industry and Primary business purpose Assess going Secondary Secondary concern purpose purpose Indicate possible misstatements Primary Secondary Primary (attention directing) purpose purpose purpose Reduce detailed econdary Primary tests purpose purpose Arens, Loebbecke: Auditing, 8/E @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. Phase FIGURE 7 - 2 Timing and Purposes of Analytical Procedures Purpose Understand client’s industry and business (Required) Planning Phase Testing Phase (Required) Completion Phase Primary purpose Assess going concern Secondary purpose Secondary purpose Indicate possible misstatements (attention directing) Primary purpose Primary purpose Secondary purpose Reduce detailed tests Secondary purpose Primary purpose

FIVE TYPES OF ANALYTICAL PROCEDURES 1. Compare client and industry data. 2. Compare client data with similar prior-period data. 3. Compare client data with client-determined expected results 4. Compare client data with auditor-determined expected results 5. Compare client data with expected results, Arens, Loebbecke: Auditing, 8/E using nonfinancial data. @2000 Prentice hall. Inc

Arens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FIVE TYPES OF ANALYTICAL PROCEDURES 1. Compare client and industry data. 2. Compare client data with similar prior-period data. 3. Compare client data with client-determined expected results. 4. Compare client data with auditor-determined expected results. 5. Compare client data with expected results, using nonfinancial data