Audit evidence is obtained as a result. Sources and Procedures for Obtaining Audit Evidence

To achieve the set goal.

In accordance with federal rules (standards), general requirements for audit evidence are defined, as well as additional requirements - obtaining evidence in specific cases and confirming information from external sources.

General requirements for audit evidence are defined in Rule (Standard) No. 5 “Audit Evidence”, approved by Decree of the Government of the Russian Federation of September 23, 2002 No. 696.

Audit evidence is obtained as a result of the complex:

tests of internal controls that are performed for audit evidence regarding the proper organization and effectiveness of systems accounting and internal control;
substantive procedures that are performed to obtain audit evidence of material misstatements in the financial statements.

Audit evidence must be sufficient (in quantity) and appropriate (in quality). By presentation source they are divided into external and internal, and in the form of presentation— visual, documentary and oral.

Sources of Audit Evidence can be:

primary documents, accounting registers;
written explanations of authorized employees of the audited entity;
information obtained from various sources (from third parties).

Factors that influence the auditor's judgment about what is sufficient, appropriate audit evidence include:

nature of accounting and internal control systems, risk assessment of controls;
the materiality of the financial statement item being audited;
auditor experience;
results of audit procedures;
source and reliability of information.

The nature, timing, and extent of substantive procedures depend on the assertion being tested as presented by the entity's management in the financial statements.

Assumptions presented by the management of the entity in the financial statements are divided into the following types:

Existence— approval of the management of the entity under audit that there is, as of a certain date, an asset or a liability recognized in the financial statements;
rights and obligations- about the ownership by the audited entity as of a certain date of an asset or liability that took place during the relevant period;
occurrence— that a business transaction or event related to the activities of the audited entity took place in the relevant period;
completeness- about the absence of assets, liabilities, business transactions or events or undisclosed accounting items that are not reflected in the accounting records;
valuation — on the reflection in the financial statements of the appropriate carrying amount of the asset or liability;
precise measurement- on the accuracy of reflecting the amount of a business transaction or event with the attribution of income or expenses to the corresponding period of time;
presentation and disclosure— that the disclosure, classification and description of the asset or liability in the financial statements is prepared in accordance with the rules for their reflection in the financial statements.

When evaluating the reliability of audit evidence, depending on the specific situation, the auditor should proceed from the following rules:

audit evidence obtained from external sources is more reliable than evidence from internal sources;

audit evidence obtained from internal sources is more reliable if the accounting and internal control systems are effective;
Audit evidence in the form of documents and written statements is more reliable than statements presented orally.

International Standard on Auditing No. 500 “Audit Evidence” specifies another rule: the evidence obtained by the auditor himself is more reliable than the evidence provided by the entity being audited. Audit evidence is more persuasive if it is obtained from different sources, has different content, and does not contradict each other.

Procedures for obtaining audit evidence are divided into the following types:

inspection— verification of records, documents or tangible assets;
observation— the auditor's tracking of a process or procedure performed by others;
request— seeking information from knowledgeable persons within or outside the entity being audited;
the confirmation- response to a request for information contained in accounting records;
recalculation- verification of the accuracy of arithmetic calculations in primary accounting documents and accounting records or the performance of the auditor's own calculations;
analytical procedures- analysis of correlations and patterns based on the information of the audited entity, as well as the study of the relationship of these relationships and patterns with other information available to the auditor or the reasons for possible deviations from it.

If significant doubts have been identified about the fairness of the presentation of business transactions in the financial statements, the auditor should attempt to obtain sufficient appropriate audit evidence to resolve the doubt. If it is impossible to obtain such evidence, the auditor's report is modified.

Additional Requirements for Audit Evidence disclosed in Federal Rule (Standard) No. 17 "Obtaining Audit Evidence in Specific Cases", approved by Decree of the Government of the Russian Federation of April 16, 2005 No. 228. Uniform requirements for audit evidence are presented in the following cases:

the presence of the auditor during the inventory of material production stocks;
disclosure of information about court cases and claims disputes;
evaluation and disclosure of information on long-term financial investments;
disclosure of information on the reportable segments of the financial (accounting) statements of the audited entity.

The presence of the auditor during the inventory of the audited entity appropriate when their value is material to the financial statements. This allows you to obtain appropriate sufficient audit evidence regarding the amount of inventories and their condition. In the case when, for objective reasons, the auditor cannot be present at the inventory of inventories, he independently conducts a random inspection and recalculation of stocks or observes the inventory on another day. If necessary, it makes turnover sheet movements in inventories between the dates as of which the sampling and recalculation is carried out and the financial statements are prepared. If the location and nature of inventories prevent the auditor from being present at the inventory, he should determine whether it is possible to perform alternative procedures to obtain sufficient appropriate audit evidence regarding their quantity and condition, and also conclude that there are no grounds for including a disclaimer in the auditor's report about limiting the scope of the audit.

The task of the auditor is to get acquainted with the document approved by the management of the audited entity, which regulates the inventory procedure, in order to obtain information:

on the control procedures applied;
the procedure for determining the degree of readiness of work in progress, determining substandard, obsolete or damaged products, as well as inventories owned by a third party;
the presence of a procedure governing the movement of inventories between the divisions of the audited entity, as well as the procedure for the delivery and acceptance of these inventories before and after the end date of the reporting period.

The function of the auditor is to observe the procedures performed by the employees of the audited entity, as well as to independently conduct random control recalculations to make sure that the procedure established by the management of the audited entity is observed. When the audited entity's inventories are held by a third party, it is necessary to have confirmation from the third party as to their quantity and condition.

The auditor should obtain audit evidence about disclosure of information on court cases and claims disputes that could materially affect the financial statements. Procedures for obtaining audit evidence about such information include:

sending the necessary requests to the management of the audited entity, including receiving statements and clarifications from the management;
verification of the decisions of the relevant body exercising general management of the activities of the audited entity;
familiarization with the correspondence of the audited entity with the organization providing legal services to him;
verification of expenses of the audited entity for legal services;
use of information about the activities of the audited entity, including information received from employees of the legal service of the audited entity.

If court cases or claims disputes are identified during the audit or the auditor believes that they may take place, then the auditor, with the consent of the audited entity, should apply directly to the organization providing legal services to the economic entity. Appeal to such an organization is carried out in writing. The letter is prepared and signed by the head of the audited entity, and sent directly by the auditor. It must contain:

a list of court cases and claim disputes in which the audited entity is involved;
assessment by the management of the audited entity of the consequences of court cases and claims disputes for the audited entity, including financial ones;
a request for confirmation by the legal organization of the reasonableness of such an assessment, as well as for the provision of additional information to the auditor if the legal organization considers the list sent to it incomplete or inaccurate.

If the management of the entity being audited refuses to grant the auditor permission to contact the organization providing legal services to him, this should be considered as limiting the scope of the audit and a qualified opinion or a disclaimer of opinion should be expressed.

The auditor should obtain sufficient appropriate audit evidence about the assessment and disclosure of information about long-term financial investments by the audited entity, if their amount is material to the financial statements.

It is also the auditor's task to obtain sufficient appropriate audit evidence. disclosure of information on the reportable segments of the financial (accounting) statements of the audited entity in accordance with financial reporting requirements.

Federal Rule (Standard) No. 18 “Obtaining Confirming Information by the Auditor from External Sources”, approved by Decree of the Government of the Russian Federation No. 228 dated April 16, 2005, defines the requirements for the procedures for issuing, obtaining and using third-party audit evidence. External confirmation is the process of obtaining and analyzing audit evidence by sending a third party to the auditor (at the request of the audited entity) a response to the audited entity's request for information regarding any particular item of the financial (accounting) statements that affects the prerequisites for its preparation.

During the audit, the auditor needs to decide whether he should use external confirmations to obtain sufficient appropriate audit evidence that the assertions of the financial statements are reliable. In doing so, he should take into account the level of materiality, inherent risk and risk of controls, as well as how audit evidence obtained as a result of other planned procedures can reduce audit risk to an acceptably low level for the assertions used in the preparation of financial (accounting) statements.

External confirmations are used in relation to:

account balances in credit institutions and other information received from credit institutions;
accounts receivable, listed on the accounts of accounting;
inventories located in the warehouses of third parties after being transferred for processing or commission;
financial instruments purchased but not delivered to the audited entity at the reporting date;
received loans;
accounts payable on accounts.

The reliability of audit evidence obtained from external confirmations depends on: The auditor's application of appropriate

procedures for preparing a request for external validation; performing external confirmation procedures; evaluating the results of external confirmation procedures. The reliability of confirmations received is influenced by: the controls applied by the auditor during the preparation of requests for external confirmation and when analyzing responses; features of the third parties that make up the response; limitations in the response or imposed by the entity's management.

The function of the auditor is to prepare a request for external confirmations based on the specific information that he intends to obtain. This request includes permission from the entity's management to indicate that it does not object to disclosure of the information requested by the auditor to a third party.

Types of external confirmations and their characteristics are given in Federal Rule (Standard) No. 18:

Positive - are reliable audit evidence
Negative evidence is less reliable than positive evidence.

The auditor may use a combination of positive and negative external confirmations.

When obtaining external confirmations, it is necessary to take into account the wishes of the management of the audited entity. There may be a situation where management prevents external confirmations from being obtained. In such a case, the auditor may take the following actions:

assess the extent to which such obstacles are justified by the management of the entity, and obtain audit evidence to confirm the motivation of its actions;
agree with the request of the entity's management not to use external confirmations and apply alternative procedures to obtain sufficient appropriate audit evidence;
not accept the arguments of the management of the audited entity, consider this fact as a limitation on the scope of the audit and modify the auditor's report.

The reliability of audit evidence obtained from external confirmations depends on: the competence of the persons making up the response; their independence from the audited entity; the authority to provide an appropriate response; their knowledge of the information that needs to be confirmed; objectivity.

The auditor's task is to control the selection of those to whom requests are sent, the preparation and distribution of requests for external confirmation and the processing of responses to the request.

According to the Federal Rule (Standard) No. 18, the auditor is recommended to contact the recipient of the request, if a response to the request is not received, to find out the reason for the refusal and try to obtain a response. If the request is denied, alternative audit procedures must be applied. If the auditor fails to obtain sufficient appropriate audit evidence, he must perform additional procedures.

The auditor should evaluate whether the results of the responses received, taking into account the results of other audit procedures performed, provide sufficient appropriate audit evidence regarding the audited assertion of financial (accounting) reporting.

The requirements for audit evidence are defined both in International Auditing Standard ISA 500 and in Russian Federal Rule (Standard) No. 5 “Audit Evidence”.

Assignment of Audit Evidence. Audit evidence is the information obtained by the auditor during the audit, and the result of the analysis of this information, on which the auditor's opinion is based. Audit evidence includes, in particular, primary documents and accounting records, which are the basis of financial (accounting) statements, as well as written explanations of authorized employees of the audited entity and information obtained from various sources (from third parties).

As evidence in the audit, any information can be used that allows the auditor to form an opinion on the reliability of accounting data or reporting in general.

Requirements for audit evidence on the basis of which an audit firm or an auditor working independently can form a reasonable opinion about the reliability of financial statements economic entity, are formulated in the Russian Rule (standard) audit activity"Audit Evidence".

Audit organization and the individual auditor must obtain appropriate evidence to draw reasonable conclusions on which to base the auditor's opinion.

Audit evidence is obtained as a result of a set of tests of internal controls and the necessary substantive procedures. In some situations, evidence may be obtained solely through substantive procedures.

Tests of internal controls means examinations conducted to obtain audit evidence about the proper organization and effectiveness of the accounting and internal control systems.

Substantive procedures are carried out in order to obtain audit evidence of material misstatements in the financial (accounting) statements. These verification procedures are carried out in the following forms:

detailed tests evaluating the correctness of the reflection of transactions and the balance of funds on the accounts of accounting;
analytical procedures.

Sufficiency of Audit Evidence. The concepts of sufficiency and appropriateness are interrelated and apply to audit evidence obtained as a result of tests of internal controls and audit procedures. Sufficiency is a quantitative measure of audit evidence. Appropriate nature is the qualitative side of audit evidence, which determines their coincidence with a specific premise of the preparation of financial (accounting) statements and its reliability. Typically, the auditor finds it necessary to rely on audit evidence that only provides evidence in support of a particular conclusion, and is not exhaustive, and often collects audit evidence from various sources or from documents of different content in order to confirm the same business transaction or group. similar business transactions.

When forming an audit opinion, the auditor usually does not examine all the business transactions of the entity being audited, since the conclusions regarding the correct reflection of the balance of funds in the accounts of accounting, a group of similar business transactions or internal controls may be based on judgments or procedures performed selectively.

The auditor's judgment about what is sufficient appropriate audit evidence is influenced by the following factors:

audit assessment of the nature and magnitude of audit risk both at the level of financial (accounting) statements and at the level of the balance of funds in accounting accounts or similar business transactions;
the nature of accounting and internal control systems, as well as risk assessment of the use of internal controls;
the materiality of the item being checked in the financial (accounting) statements;
experience gained during previous audits;
the results of audit procedures, including possible detection of fraud or error;
source and reliability of information.

When obtaining audit evidence using tests of internal controls, the auditor should consider the sufficiency and appropriateness of that evidence in order to support the assessment of the level of risk in the application of internal controls.

The objects of assessment of accounting and internal control systems, regarding which the auditor collects audit evidence, include:

organization - the arrangement of accounting and internal control systems that ensures the prevention and (or) detection, as well as the correction of material misstatements;
functioning - the effectiveness of the operation of accounting and internal control systems during the relevant period of time.

Certain types of audit evidence obtained by the auditor are more reliable than others. Usually, when conducting an observation, the auditor obtains more reliable audit evidence than that which can be obtained through inquiries. For example, the auditor may obtain audit evidence regarding the appropriate segregation of duties either by observing the persons applying the procedure or by interviewing relevant personnel. However, audit evidence obtained through tests of controls such as observation is relevant only to the point in time at which the procedure was applied. Therefore, the auditor may find it necessary to supplement these procedures with other tests of controls that may provide audit evidence for other time periods.

In determining appropriate audit evidence to support conclusions about control risk, the auditor may consider audit evidence obtained in previous audits. In the case of a recurring (over a number of consecutive reporting periods) assignment, the auditor will be aware of the accounting and internal control systems, as he will have information obtained in the course of previous work. However, he needs to update his knowledge and consider whether additional audit evidence is required regarding any changes to the control system. Before relying on procedures performed in previous audits, the auditor needs to obtain audit evidence that supports reliance on those procedures regarding the nature, timing, and extent of any changes to the entity's accounting and internal control systems that have occurred since those procedures were performed. and evaluate their impact in terms of the ability to continue to rely on such procedures. The more time passes from the moment such procedures are performed, the less confidence in them will be.

When obtaining audit evidence using audit procedures, the auditor should consider the sufficiency and appropriateness of this evidence, along with evidence obtained as a result of tests of internal controls, in order to confirm the assertions of financial (accounting) reporting.

The prerequisites for the preparation of financial (accounting) statements, made by the management of the audited entity in an explicit or implicit form of approval and reflected in the financial (accounting) statements, include the following elements:

Existence- availability as of a certain date of an asset or liability reflected in the financial (accounting) statements;
rights and obligations- belonging to the audited entity as of a certain date of an asset or liability reflected in the financial (accounting) statements;
occurrence- related to the activities of the entity being audited, a business transaction or event that took place during the relevant period;
completeness- the absence of unrecorded assets, liabilities, business transactions or events or undisclosed accounting items;
valuation- reflection in the financial (accounting) statements of the proper balance sheet value of the asset or liability;
precise measurement- the accuracy of reflecting the amount of a business transaction or event with the attribution of income or expenses to the corresponding period of time;
presentation and disclosure- explanation, classification and description of the asset or liability in accordance with the rules for its reflection in the financial (accounting) statements.

Audit evidence, as a rule, is collected, taking into account each premise of the preparation of financial (accounting) statements. Audit evidence relating to one assertion, such as the existence of inventory, cannot compensate for the lack of audit evidence relating to another assertion, such as a valuation. The nature, timing and extent of verification procedures essentially depend on the assertion being tested. During tests, the auditor may obtain evidence related to more than one assertion, for example, when checking the settlement of receivables, he may identify audit evidence both about their existence and about their size (valuation).

The reliability of audit evidence depends on its source (internal or external), as well as on the form of its presentation (visual, documentary or oral). When evaluating the reliability of audit evidence, depending on the specific situation, proceed from the following:

audit evidence obtained from external sources (from third parties) is more reliable than evidence obtained from internal sources;
audit evidence obtained from internal sources is more reliable if existing systems accounting and internal controls are effective;
audit evidence collected directly by the auditor is more reliable than evidence obtained from the entity being audited;
Audit evidence in the form of documents and written statements is more reliable than statements presented orally.

Audit evidence is more persuasive if it is obtained from different sources, has different content, and does not contradict each other. In such cases, the auditor may provide a higher degree of assurance than would be obtained by considering the audit evidence individually. Conversely, if audit evidence obtained from one source is inconsistent with evidence obtained from another, the auditor should determine what additional procedures need to be performed to determine the reasons for such a discrepancy.

The auditor should weigh the costs associated with obtaining audit evidence against the usefulness of the information obtained. However, the complexity of the work and the costs are not sufficient grounds for refusing to perform the necessary procedure.

If there are serious doubts about the reliability of the reflection of business transactions in the financial (accounting) statements, the auditor should try to obtain sufficient appropriate audit evidence to eliminate such doubt. If it is not possible to obtain sufficient appropriate audit evidence, the auditor should express his opinion with an appropriate qualification or disclaim an opinion.

Types of Audit Evidence. To substantiate your opinion about the reliability financial statements The auditor should obtain sufficient audit evidence to do so based on the following audit procedures:

detailed verification of the correctness of the reflection in the accounting of turnover and balance of accounts;
analytical procedure;
verification (test) of internal controls.

The audit program should provide for what audit procedures and to what extent must be performed to collect audit evidence.

The amount of information required for audit estimates is not strictly regulated. The auditor, on the basis of his professional judgment, is obliged to independently decide on the amount of information necessary to draw up an opinion on the reliability of the financial statements of an economic entity. When selecting methods for obtaining evidence, it should be borne in mind that financial information may be materially misstated.

Audit evidence can be internal, external and mixed.

Internal Audit Evidence include information received from an economic entity in writing or orally.

External Audit Evidence include information received from a third party in writing (usually at the written request of the audit organization).

Mixed Audit Evidence include information received from an economic entity in writing or orally and confirmed by a third party in writing.

The greatest value and reliability for the audit organization are external evidence, then mixed and internal.

Audit evidence must be reliable and sufficient. Their sufficiency in each particular case is determined by the auditors independently on the basis of an assessment of the internal control system and the magnitude of their audit risk. To draw up an objective and reasonable conclusion, the auditor must collect a sufficient amount of qualitative evidence.

The evidence obtained by the audit organization itself is usually more reliable than the evidence provided by the economic entity.

Evidence in the form of documents and affidavits is usually more reliable than oral evidence.

The collected evidence is reflected by the auditor in his working papers, drawn up in the form of records on the study and evaluation of the accounting and organization of internal control, as well as forms, tables and protocols reflecting the planning, implementation and presentation of the results of audit procedures. The data of the evidence obtained are used in the preparation of an audit report and a report to the management of the audited enterprise based on the results of the audit.

Sources of Audit Evidence. The sources of obtaining audit evidence (evidence) are:

primary documents of an economic entity and third parties;
accounting registers of an economic entity;
results of the analysis of financial and economic activity of an economic entity;
oral statements of employees of the economic entity and third parties;
comparison of some documents of an economic entity with others, as well as comparison of documents of an economic entity with documents of third parties;
the results of the inventory of the property of the economic entity, conducted by the employees of the economic entity;
financial statements.

The quality of evidence depends on its sources. The most valuable audit evidence is evidence obtained by the auditor directly as a result of the study of business transactions.

The determination of the sufficiency of audit evidence depends on the specific circumstances of the audit.

Audit risk is reduced if the auditor uses evidence obtained from various sources and in different forms of presentation. If evidence obtained from one source contradicts evidence obtained from another source, the auditor needs to use additional audit procedures to resolve the conflict and be confident in the reliability of the evidence collected and the validity of the conclusions reached.

If the economic entity does not provide the audit organization with the existing documents in full and it is not able to collect sufficient audit evidence on any account and (or) transaction, the audit organization is obliged to reflect this in the report (written information to the management of the economic entity) and may consider on the preparation of an audit opinion other than unconditionally positive.

The audit organization and the individual auditor (hereinafter referred to as the auditor) must obtain sufficient appropriate evidence in order to formulate sound conclusions on which the auditor's opinion is based.

Uniform “requirements for the quantity and quality of evidence that must be obtained during the audit of financial (accounting) statements, as well as for procedures performed in order to obtain evidence, are established by federal rule (standard) of audit activity No. 5 “Audit evidence”.

Source documents;

Accounting records that are the basis of financial (accounting) statements;

Written explanations of authorized employees of the audited entity;

Information obtained from various sources (from third parties).

Audit evidence must be sufficient and of an appropriate nature.

Sufficiency is a quantitative measure of audit evidence. Appropriate nature is the qualitative side of audit evidence, which determines their coincidence with a specific premise of the preparation of financial (accounting) statements and its reliability. Typically, the auditor finds it necessary to rely on audit evidence that only provides evidence to support a particular conclusion, and is not exhaustive, and often collects audit evidence from different sources or from documents of different content in order to support the same business transaction or group of business operations of the same type.

The auditor's judgment about what is sufficient appropriate audit evidence is influenced by the following factors:

Auditor's assessment of the nature and magnitude of audit risk both at the level of financial (accounting) statements and at the level of the balance of funds in accounting accounts or business transactions of the same type;

The nature of accounting and internal control systems, as well as risk assessment of internal controls;

The materiality of the audited item of the financial (accounting) statements;

Experience gained during previous audits;

The results of audit procedures, including the possible discovery of fraud or error;

Source and reliability of information.

Audit evidence can be:

Internal (received from an economic entity);

External (received from third parties);

Mixed (received from an economic entity, but confirmed by third parties).

The reliability of audit evidence depends on its source (internal or external), as well as on the form of its presentation (visual, documentary or oral). In evaluating the reliability of audit evidence, consideration should be given to the following:

Audit evidence obtained from external sources (from third parties) is more reliable than evidence obtained from internal sources;

Audit evidence obtained from internal sources is more reliable if existing accounting and internal control systems are effective;

Audit evidence collected directly by the auditor is more reliable than evidence obtained from the entity being audited;

Audit evidence in the form of documents and written statements is more reliable than statements presented orally.

The collected evidence is reflected by the auditor in his working papers in the form of records on the study and evaluation of the accounting and organization of internal control, as well as in the form of forms, tables and protocols reflecting the planning, implementation and presentation of the results of audit procedures. They are used in the preparation of the auditor's report and report.

The sources of audit evidence are:

Financial and accounting reporting: balance sheet(form No. 1), income statement (form No. 2), appendix to the balance sheet (form No. 5);

Accounting registers(accounting and control): order journals, general ledger, business transaction journal, cash book, settlement and payment statements for wages etc., turnover, balance and chess statements;

Primary documents of the economic entity and third parties;

Statistical reporting;

Reporting on contributions to extrabudgetary funds;

tax reporting;

Statutory documents, contracts, orders and other administrative documents;

Results of the analysis of financial and economic activity;

Oral statements of employees of the economic entity and third parties;

The results of comparing some documents of an economic entity with others, as well as comparing documents of an economic entity with documents of third parties;

Inventory results;

Explanations of the management of the audited subject in oral and written form.

The most valuable evidence the auditor receives in the study of business transactions.

Audit risk is reduced if the auditor uses evidence obtained from different sources and in different forms of presentation. When evidence from different sources is inconsistent, the auditor should use additional procedures.

The most commonly used audit evidence is the following: audit procedures(methods):

Verification of mathematical (arithmetic) calculations of the checked economic entity;

Inventory - a technique that allows you to obtain accurate information about the availability of property of an economic entity;

Checking compliance with the rules for accounting for individual business transactions (control over accounting work performed by the accounting department of the organization);

Confirmation in writing from an independent third party about the reality of the balance on the accounting accounts (in the form of a response to a request on behalf of the management of the economic entity or on behalf of the audit organization);

Oral questioning of personnel, management of an economic entity and an independent third party (drawn up in the form of protocols or a brief synopsis);

Inspection (verification of documents) - the auditor (audit organization) must verify the reality of a certain document;

Tracking - a procedure during which the auditor (audit organization) checks the primary documents, reflects the data of the primary documents in the registers of synthetic and analytical accounting, finds the final correspondence of the accounts and makes sure that the relevant business transactions are reflected in the accounting correctly or incorrectly;

Analytical procedures - analysis and evaluation of the information received by the auditor (audit organization), study of the most important financial and economic indicators of the audited entity in order to identify business transactions incorrectly reflected in accounting, identifying the causes of errors (distortions).

audit evidence.

Audit evidence is the information obtained by the auditor during the audit, and the result of the analysis of this information, on which the auditor's opinion is based. Audit evidence includes:

primary documents and accounting records;

written explanations of authorized employees of the audited entity;

information obtained from various sources (from third parties).

Types of audit evidence:

internal - information received from the client in writing or orally

external - information received from a third party in writing (usually at the written request of the auditor)

mixed - information received from the client in writing or orally and confirmed in writing by a third party.

Sources of Audit Evidence

Audit evidence is obtained from tests of internal controls and substantive procedures.

Tests of internal controls are activities carried out to obtain audit evidence regarding the proper organization and effectiveness of the accounting and internal control systems.

Substantive procedures are performed to obtain audit evidence of material misstatements in the financial statements.

Audit Evidence Requirements

There are two main requirements for audit evidence: adequacy and proper character. Sufficiency is a quantitative measure of audit evidence. Appropriateness is the quality of audit evidence that determines whether it is consistent with a specific assertion in the preparation of financial statements and is reliable. Typically, the auditor finds it necessary to rely on audit evidence that only provides evidence to support a particular conclusion, and is not exhaustive, and often collects audit evidence from different sources or from documents of different content in order to confirm the same business transaction or group. similar business transactions.

The auditor's judgment about what is sufficient appropriate audit evidence is influenced by the following factors:

audit assessment of the nature and magnitude of audit risk both at the level of financial (accounting) statements and at the level of the balance of funds in accounting accounts or similar business transactions;

the nature of the accounting and internal control systems, as well as the assessment of the risk of internal controls;

the materiality of the item being checked in the financial (accounting) statements;

experience gained during previous audits;

the results of audit procedures, including the possible discovery of fraud or error;

source and reliability of information.

Assertions in the preparation of financial statements are assertions made by the management of the entity, whether implicit or explicit, that are reflected in the financial statements. These prerequisites include the following elements:

Existence- availability as of a certain date of an asset or liability reflected in the financial (accounting) statements;

rights and obligations- belonging to the audited entity as of a certain date of an asset or liability reflected in the financial (accounting) statements;

occurrence- a business transaction or event that took place during the relevant period;

completeness- the absence of unrecorded assets, liabilities, business transactions or events or undisclosed accounting items;

valuation- reflection in the financial (accounting) statements of the proper balance sheet value of the asset or liability;

precise measurement- the accuracy of reflecting the amount of a business transaction or event with the attribution of income or expenses to the corresponding period of time;

presentation and disclosure- explanation, classification and description of the asset or liability in accordance with the rules for its reflection in the financial (accounting) statements.

audit evidence obtained from external sources (from third parties) is more reliable than evidence obtained from internal sources;

audit evidence obtained from internal sources is more reliable if existing accounting and internal control systems are effective;

audit evidence collected directly by the auditor is more reliable than evidence obtained from the entity being audited;

Audit evidence in the form of documents and written statements is more reliable than statements presented orally.

Procedures for Obtaining Audit Evidence

The auditor obtains audit evidence by performing the following substantive procedures: inspection, observation, inquiry, confirmation, recalculation (checking the entity's arithmetic calculations), and analytical procedures.

Inspection is a review of records, documents or tangible assets. Verification of tangible assets includes not only verification of their presence, but also verification of documents regarding the ownership of them and their valuation.

Observation is the auditor's tracking of a process or procedure performed by others (for example, the auditor's observation of inventory counts carried out by employees of the entity being audited, or the monitoring of internal control procedures for which there is no audit trail).

Request is seeking information from knowledgeable persons within or outside the entity being audited. The request in the form can be either a formal written request addressed to third parties or an informal verbal question addressed to employees of the entity being audited. Answers to inquiries (questions) may provide the auditor with information that he did not previously have or that confirm audit evidence.

Confirmation represents a response to a request for information contained in accounting records (for example, the auditor usually requests confirmation of receivables directly from debtors).

Recalculation is a verification of the accuracy of arithmetic calculations in primary documents and accounting records or the performance of independent calculations by the auditor.

Analytical procedures are the analysis and evaluation of the information received by the auditor, the study of the most important financial and economic indicators of the audited entity in order to identify unusual and (or) incorrectly reflected business transactions in accounting, identify the causes of such errors and distortions.

abstract

By discipline: "Audit"

Topic: "Audit Evidence"

Completed by: 3rd year student

BEZD groups 36-3

Larionov Dmitry

Moscow 2014

Introduction ………………………………………………………………………….. 3

§1 Audit evidence ……………………………………………….4

1.1 The nature of the audit evidence ………………………………….. 4

§2 Types and sources of obtaining audit evidence .................................... 10

§3 Procedures for Obtaining Audit Evidence ……………………..13

Conclusion ………………………………………………………………….....18

Bibliographic list…………………………………………………….20

Introduction

Audit activity (audit services)- activities for conducting an audit and providing services related to the audit, carried out by audit organizations, individual auditors.

Audit - independent verification accounting (financial) statements of the audited entity in order to express an opinion on the reliability of such statements. For the purposes of this federal law the accounting (financial) statements of the audited entity are understood to be the statements provided for by the Federal Law of November 21, 1996 N 129-FZ "On Accounting" or regulatory documents issued in accordance with it legal acts, as well as reporting similar in composition, provided for by other federal laws or regulatory legal acts issued in accordance with them. (as amended by Federal Law No. 136-FZ of July 1, 2010)

The list of services related to the audit is established by federal standards of audit activity.

Federal auditing standards:

1) determine the requirements for the procedure for carrying out audit activities, as well as regulate other issues provided for by this Federal Law;

2) are developed in accordance with international auditing standards;

3) are mandatory for audit organizations, auditors, as well as self-regulatory organizations of auditors and their employees.

(as amended by Federal Law No. 136-FZ of July 1, 2010)

Audit Evidence

The nature of audit evidence

This federal rule (standard) of audit activity, developed taking into account international standards audit, establishes uniform requirements for the quantity and quality of evidence that must be obtained during the audit of financial (accounting) statements, as well as for procedures performed to obtain evidence.

Audit Evidence- this is the information obtained by the auditor during the audit, and the result of the analysis of this information, on which the auditor's opinion is based. Audit evidence includes, in particular, source documents and accounting records, which are the basis of financial (accounting) statements, as well as written explanations of authorized employees of the audited entity and information obtained from various sources (from third parties).

Tests means internal controls means the activities carried out to obtain audit evidence about the proper organization and effectiveness of the accounting and internal control systems.

(as amended by Decree of the Government of the Russian Federation of 07.10.2004 N 532)

Substantive Procedures conducted in order to obtain audit evidence of material misstatements in the financial (accounting) statements. These verification procedures are carried out in the following forms:

Detailed tests that evaluate the correctness of the reflection of transactions and the balance of funds on the accounts of accounting;

analytical procedures.

The objects of assessment of accounting and internal control systems, regarding which the auditor collects audit evidence, include:

organization- the arrangement of accounting and internal control systems to ensure the prevention and (or) detection, as well as the correction of material misstatements;

functioning- the effectiveness of the accounting and internal control systems during the relevant period of time.

When obtaining audit evidence using tests of internal controls, the auditor should consider the sufficiency and appropriateness of that evidence to support an assessment of the level of risk of internal controls.

The concepts of sufficiency and appropriateness are interrelated and apply to audit evidence obtained as a result of tests of internal controls and substantive audit procedures. Adequacy is a quantitative measure of audit evidence.

Proper character is the qualitative side of audit evidence, which determines their coincidence with a specific premise for the preparation of financial (accounting) statements and its reliability. Typically, the auditor finds it necessary to rely on audit evidence that only provides evidence to support a particular conclusion, and is not exhaustive, and often collects audit evidence from different sources or from documents of different content in order to confirm the same business transaction or group. similar business transactions.

(as amended by Decree of the Government of the Russian Federation of 07.10.2004 N 532)

The auditor's judgment about what is sufficient appropriate audit evidence is influenced by the following factors:

· audit assessment of the nature and magnitude of audit risk both at the level of financial (accounting) statements and at the level of the balance of funds in accounting accounts or similar business transactions;

• the nature of the accounting and internal control systems, as well as the assessment of the risk of internal controls;

(as amended by Decree of the Government of the Russian Federation of 07.10.2004 N 532)

the materiality of the item being checked in the financial (accounting) statements;

experience gained during previous audits;

the results of audit procedures, including the possible discovery of fraud or error;

(as amended by Decree of the Government of the Russian Federation of 07.10.2004 N 532)

source and reliability of information.

Prerequisites for the preparation of financial (accounting) statements - statements made by the management of the audited entity in an explicit or implicit form, reflected in the financial (accounting) statements. These prerequisites include the following elements:

Existence - availability as of a certain date of an asset or liability reflected in the financial (accounting) statements;

rights and obligations - belonging to the audited entity as of a certain date of an asset or liability reflected in the financial (accounting) statements;

occurrence - related to the activities of the entity being audited, a business transaction or event that took place during the relevant period;

completeness - the absence of unrecorded assets, liabilities, business transactions or events or undisclosed accounting items;

valuation - reflection in the financial (accounting) statements of the proper balance sheet value of the asset or liability;

accurate measurement - the accuracy of reflecting the amount of a business transaction or event with the attribution of income or expenses to the corresponding period of time;

presentation and disclosure - explanation, classification and description of the asset or liability in accordance with the rules for its reflection in the financial (accounting) statements.

The nature, timing and extent of substantive testing procedures depend on the assertion being tested. During tests, the auditor may obtain evidence related to more than one assertion, for example, when checking the collection of receivables, he may identify audit evidence both about their existence and about their size (valuation).

audit evidence obtained from external sources (from third parties) is more reliable than evidence obtained from internal sources;

· audit evidence obtained from internal sources is more reliable if the existing accounting and internal control systems are effective;

audit evidence obtained directly by the auditor is more reliable than evidence obtained from the audited entity;

Audit evidence in the form of documents and written statements is more reliable than statements presented orally.

Audit evidence is obtained as a result. Sources and Procedures for Obtaining Audit Evidence

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