Chapter 6 notes.docx

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Published on 7 Oct 2012
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ADMS 4552
Chapter 6 notes
Evidence Gathering
- Inspection
- Observation
- Inquiry
- Confirmation
- Recalculation
- Reperformance
- Analytical procedures
- Inspection - physical examination
o Verifying that the asset actually exists, the quality and description
o Inventory/cash but others as well
o Not sufficient for the rights and obligations objective
- Documentation - object has no inherent value
- Observation - use senses to assess activities (tour the plant, watch people perform tasks)
- Inquiry - written/oral confirmation, etc
- Confirmation - negative/positive
- Recalculation -
- Reperformance/parallel simulation
- Analytical procedures - comparisons and relationships between financial and non-financial
information
- Integrated test facility - test environment that does not affect client records
- Generalized audit software - package used by auditor to run routines
- Internal documentation - used and retained within the client’s organization without ever going to
an outside party
- External document - vendor invoice, etc. currently in the hands of the client or is easily accessible
- Vouching - use of documents to support recorded transactions or amounts

Document Summary

Inspection - physical examination: verifying that the asset actually exists, the quality and description, not sufficient for the rights and obligations objective. Documentation - object has no inherent value. Observation - use senses to assess activities (tour the plant, watch people perform tasks) Analytical procedures - comparisons and relationships between financial and non-financial information. Integrated test facility - test environment that does not affect client records. Generalized audit software - package used by auditor to run routines. Internal documentation - used and retained within the client s organization without ever going to an outside party. External document - vendor invoice, etc. currently in the hands of the client or is easily accessible.