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7 methods of obtaining audit evidence.

Audit evidence is information used by auditor to draw reasonable conclusion about financial statements on which auditor’s opinion is based. Audit evidence should be appropriate and sufficient.

The following are audit procedures of obtaining audit evidence;


Inquiry means seeking information from knowledgeable person inside or outside entity. Evidence from inquiry alone is not enough it should be supported by other procedures. Example of inquiry are inquiry about preparation of bank reconciliation statement and representation from management

Observation of procedures

This means watching ongoing procedures (e.g controls) performed by entity personnel. Evidence from observation is limited to the time of observation  and is also affected when person are aware that they  are being watched. Example of observation of procedures include watching physical inventory count, distribution of wages, opening of mails and walk through test.

External confirmation

This is specific type of inquiry which involve auditor obtaining evidence directly from independent third parties in writing. Example include debtors/creditors confirmation, bank confirmation and lawyer’s confirmation.


This means checking arithmetical accuracy of calculation by auditor doing the calculation. Example include recalculation of depreciation expense, recalculation of inventory valuation and recalculation of list of debtors.

Re performance

This means independently performing procedures or controls originally performed by client. Example include preparation of bank reconciliation statement and preparation of ageing of debtors.


This means examination of documents or physical assets. Audit evidence obtained through inspection are affected by reliability of documents inspected. Example of inspection include inspection of accounting records (e.g sales invoices, purchase invoices, title documents) and inspection of tangible assets

Analytical procedures

It means evaluating financial data through plausible relationship with other financial and non financial data and comparing and investigating unusual difference. Example include comparing gross profit ratio of current year with previous year and investigating difference and comparison of salaries expenses with number of employees.

4 thoughts on “7 methods of obtaining audit evidence.”

  1. Pingback: Absolute Assurance In Auditing - Meaning - ACCOUNTING CLASS

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