Question

Identify the Organizational functions to collect auditing evidences?

Answer 1

Collecting audit evidence is one of the main step while carrying out audit. On the basis of these evidences auditor concludes his report. Various ways of collecting audit evidence are

Inspection: it involves examining records or documents,whether internal or external, in paper form,electronic form,or other media, or a physical examination of an asset. Inspection of tangible assets may provide reliable audit evidence with respect to their existence,but not necessarily about the entity's rights and obligations or the valuation of assets.

Observation: it is a process where one observes how the things are carried out for e.g,auditor's observation of  the cash counting process of a bank. in this the actual job is performed by other people its the auditor who observes the whole process.

External confirmation: In this auditor asks for a written confirmation from a third party it can be in paper form or electronic mode. for e.g confirming from vendors about actual unit dispatched.

Recalculation: Arithmetical accuracy of documents or records is checked. it can be performed manually or electronically.

Inquiry: It consists of seeking information from persons both inside and outside the entity. inquiry is carried out throughout the audit in order to gain knowledge about the entity activities and procedures. it can be a formal written inquiry or an informal oral inquiries.