Auditing and Assurance Services

Seventeenth Edition, Global Edition

Chapter 6
Audit Evidence

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Learning Objectives (1 of 2)
6.1 Contrast audit evidence with evidence used by other
professions
6.2 Identify the four audit evidence decisions that are
needed to create an audit program TWSA 500 查核證據
6.3 Specify the characteristics that determine the
persuasiveness of evidence
6.4 Identify and apply the eight types of evidence used in
auditing(臺灣公報市7種方式)

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Learning Objectives (2 of 2)
6.5 Know the types of analytical procedures and their
purposes分析性程序-SAS50
6.6 Identify how auditors incorporate data analytics and
other advanced technologies in an audit
6.7 Compute common financial ratios
6.8 Understand the purposes of audit documentation
6.9 Prepare organized audit documentation SAS45查核工作
底稿準則

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Learning Objective 6.1
Contrast audit evidence with evidence used by other
professions

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Nature of Evidence
• Evidence is defined as
– Any information used by the auditor to determine
whether the information being audited is stated in
accordance with the established criteria

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Table 6.1 Characteristics of Evidence for a
Scientific Experiment, Legal Case, and
Audit of Financial Statements (1 of 2)
Scientific Experiment
Basis of Legal Case Involving an Audit of Financial
Involving Testing a
Comparison Accused Thief Statements
Medicine
Use of the Determine effects of Decide guilt or innocence Determine whether
evidence using the medicine of accused statements are fairly
presented

Nature of Results of repeated Direct evidence and Various types of audit

evidence used experiments testimony by witnesses evidence generated by
and parties involved the auditor, third parties,
and the client
Party or parties Scientist Jury and judge Auditor
evaluating
evidence

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Table 6.1 Characteristics of Evidence for a
Scientific Experiment, Legal Case, and
Audit of Financial Statements (2 of 2)
Scientific Experiment
Basis of Legal Case Involving an Audit of Financial
Involving Testing a
Comparison Accused Thief Statements
Medicine
Certainty of Vary from uncertain to Requires guilt beyond a High level of assurance
conclusions near certainty reasonable doubt
from evidence

Nature of Recommend or not Innocence or guilt of party Issue one of several

conclusions recommend use of alternative types of audit
medicine reports
Typical Society uses ineffective Guilty party is not Statement users make
consequences or harmful medicine penalized or innocent incorrect decisions and
of incorrect party is found guilty auditor may be sued
conclusions
from evidence

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Learning Objective 6.2
Identify the four audit evidence decisions that are needed to
create an audit program

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Audit Evidence Decisions
• There are four decisions auditor needs to make
about what evidence to gather and how much of it to
accumulate:
– 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
* 中文公報的用語:性質/時間/範圍

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Let’s Discuss (1 of 8)
• List the four major evidence decisions that must be made
on every audit.

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Learning Objective 6.3
Specify the characteristics that determine the persuasiveness
of evidence

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Persuasiveness of Evidence (1 of 4)
• Audit standards require the auditor to accumulate
sufficient appropriate evidence to support the opinion
issued
• The two determinants of the persuasiveness of
evidence are:
– Appropriateness 適切
– Sufficiency 足夠
TWSA 500號第14條:查核證據之足夠性與適切性兩者相
互關聯，足夠性係查核證據數量之衡量，所需查核證據之
數量受查核人員對不實表達風險之評估，以及查核證據之
品質所影響。唯取得較多之查核證據可能無法彌補查核證
據品質不佳之缺陷

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Persuasiveness of Evidence (2 of 4)
• Appropriateness of evidence is a measure of the
quality of evidence, which includes:
– Relevance—evidence must pertain to or be relevant to
the audit objective that the auditor is testing 攸關
– Reliability—the degree to which evidence can be
believable or worthy of trust 可靠
– TWSA 500 第15條，查核證據之可靠性受其來源及性質
影響，與查核證據取得時之情況有關

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Persuasiveness of Evidence (3 of 4)
• The quantity of evidence obtained determines its
sufficiency. It is measured:
– Primarily by the sample size the auditor selects, which
is determined by
▪ Auditor’s expectation of misstatements
▪ The effectiveness of the client’s internal controls

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Persuasiveness of Evidence (4 of 4)
• The persuasiveness of evidence can be evaluated only
after considering the combination of appropriateness and
sufficiency, including the effects of the factors influencing
appropriateness and sufficiency
• In making decisions about evidence for a given audit, both
persuasiveness and cost must be considered

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Table 6.2 Relationships Among Evidence
Decisions and Persuasiveness
Audit Evidence Decisions
Audit procedures and timing
Sample size and items to select
Qualities Affecting Persuasiveness of
Evidence
Appropriateness
Relevance
Reliability
Independence of provider
Effectiveness of internal controls
Auditor’s direct knowledge
Qualifications of provider
Objectivity of evidence
Timeliness
When procedures are performed
Portion of period being audited
Sufficiency
Adequate sample size
Selection of proper population items
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TSSA 500 -查核證據
• 第16條：查核人員對是否以取得足夠及適切之查核證據作出專業
判斷時，應考量下列攸關因素
1. 查核程序之性質、2. 財務報導之及時性、3. 成本與效益之權衡。
• 第41條：查核證據可靠性的原則
 查核證據取自受查者外部獨立來源時，可靠性較高
 查核證據來自受查者內部時，若受查者相關控制有效，可靠性較高。
 查核人員直接取得之證據，較間接取得之證據可靠
 書面形式之查核證據，較口頭取得之證據可靠
 檢查原始文件取得之查核證據，較檢查影印等或轉換為電子文件而取
得之證據可靠

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TSSA 500 -查核證據
• 第20條：查核人員應藉由執行下列程序，取得使其做成合理之結論並據
以表示意見之查核證據
– 風險評估程序
– 近一步查核程序
▪ 控制測試
▪ 證實程序（包含細項測試及證實分析性程序）

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Learning Objective 6.4
Identify and apply the eight types of evidence used in
auditing

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Types of Audit Evidence (1 of 3)
• Physical examination(實體檢查，臺灣公報沒有這項)
– The inspection or count by the auditor of a tangible
asset
• Confirmation 外部函證
– The receipt of a direct written response from a third
party verifying the accuracy of information that was
requested
• Inspection(臺灣把實體檢查跟檢查記錄與文件都算檢查)
– The auditor’s examination of the client’s documents
and records

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Types of Audit Evidence (2 of 3)
• Analytical procedures 分析性程序
– The evaluations of financial information through
analysis of plausible relationships among both
financial and nonfinancial data
• Inquiries of the client 查詢
– The obtaining of written or oral information from the
client in response to questions from the auditor

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Types of Audit Evidence (3 of 3)
• Recalculation 重新驗算
– Rechecking a sample of calculations made by the
client
• Reperformance 重新執行
– The auditor’s independent tests of client accounting
procedures or controls
• Observation 觀察
– Consists of looking at a process or procedure being
performed by others

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不同查核程序可以驗證不同聲明
ex: Physical Examination
• 驗證資產存在-existence objective
• 驗證所檢視的資產是否都已記錄-completeness objective
• 檢視無法判斷資產之所有權-rights and obligations objective
• 檢視無法判斷資產價值-realizable value objective

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不同查核程序可以驗證不同聲明
ex: 檢查
• 第二十五條
– 某些文件可作為資產存在之直接證據，例如股票或債
券即可視為金融工具存在之證明文件，惟檢查此等文
件未必可提供有關所有權及價值之查核證據。此外，
檢查已履行之合約可能提供與受查者所採用會計政策
（如收入認列）攸關之查核證據。
• 第二十六條
– 有形資產之檢查可對該等資產之存在提供可靠之查 核
證據，惟未必可對受查者之權利與義務或資產之 評價
提供可靠之查核證據。對個別存貨項目之檢查，可與
觀察存貨盤點一併進行。

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Figure 6.1 Relationships Among Auditing
Standards, Types of Evidence, and the
Four Audit Evidence Decisions

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Table 6.4 Appropriateness of Types
of Evidence

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Cost of types of evidence
• 成本高：實體檢視、函證
• 成本適中：文書證據、分析性程序、重新執行
• 成本低：觀察、詢問委託人與重新計算
– 觀察可在執行其他程序時一併執行（盤點存貨可順
便觀察客戶員工是否遵循適當的存貨盤點程序）

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 7-28

Terms and Types of Evidence

Terms Type of Evidence

Examine Inspection
Scan Analytical procedures
Read Inspection
Compute Analytical procedures
Recompute Recalculation
Foot Recalculation
Trace Inspection/Reperformance
Compare Inspection
Count Physical examination
Observe Observation
Inquire Inquiries of client
Vouch Inspection

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Table 7-6

名詞與定義 查核程序範例 證據種類

檢視-對文件或紀錄的詳細研 檢視賣方發票，以確定收到之商 檢查
究，以確定有關事實 品或勞務是否合理且為業務所需
瀏覽-對文件或紀錄的粗略審 瀏覽銷貨記錄，尋找大額或異常 分析性程序
核，以確定是否有異常需進 交易
一步調查
閱讀-對書面資訊審核，以確 閱讀董事會會議記錄，並在工作 檢查
定與審計有關的事實 底稿上彙總所有與財務報表相關
的資訊
計算-由獨立於委託人外的查 計算存貨周轉率並與前一年度比 分析性程序
核人員計算 較
重新計算-加總是否正確 重新計算銷貨發票上單價*數量。 重新計算
加總（直加）一個月份的銷貨簿。

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Table 7-6
名詞與定義 證據種類
順查-與文書證據或重新執行 追查銷貨簿中的銷貨交易到銷貨 檢查
有關的指示，該指示指出查 發票，並比對客戶名稱、日期、 （重新執行）
核人員應專查的事項及方向， 銷貨額追查銷貨簿過帳至總分類
通常會連帶下一個指示，像 帳
是予以比較或重算
比較-比較不同處所的資訊， 選出銷貨發票樣本，並將發票上 檢查
該指示應指出比較的事項 的單價與管理階層所批准的單價
表比較。
盤點-在特定時間確定握有之 抽盤100筆存貨樣本，與客戶盤點 實體檢視
資產 及紀錄存貨比較
觀察-觀察的實際行動需與前 觀察兩組盤點存貨小組是否各自 觀察
述證據所稱之查詢一致 獨立盤點及紀錄存貨
逆查-使用文件來驗證已記錄 以紀錄的進貨交易樣本逆查至供 檢查
的交易或金額 應商發票和驗收報告

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Let’s Discuss (2 of 9)
• List the eight types of audit evidence included in this
chapter and give two examples of each.

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Learning Objective 6.5
Know the types of analytical procedures and their purposes

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Analytical Procedures (1 of 2)
• Analytical procedures may be performed at any of
three times during an engagement:
– In the planning phase (required)
– During the testing phase
– During the completion phase (required)

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Analytical Procedures (2 of 2)
• The usefulness of analytical procedures as audit
evidence depends significantly on appropriate
comparison data
• Auditors typically compare client data with:
– Industry data
– Similar prior-period data
– Client-determined expected results
– Auditor-determined expected results

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Table 6.6 Internal Comparisons and
Relationships
Ratio or Comparison
Raw material turnover for a
manufacturing company
Sales commissions divided by net sales
Sales return and allowances divided by
gross sales
Bad debt expense divided by net sales
Each of the individual manufacturing
expenses as a percent of total
manufacturing expense
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Possible Misstatement
Misstatement of inventory or cost of goods
sold or obsolescence of raw material
inventory
Misstatement of sales commission
Misclassified sales returns and allowances
or unrecorded returns or allowances
subsequent to year end
Misstatement in the allowance for bad
debts
Significant misstatement of individual
expenses within a total
Learning Objective 6.6
Identify how auditors incorporate data analytics and other
advanced technologies in an audit

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Audit Data Analytics (1 of 3)
• Audit data analytics (ADA) are:
– The science and art of discovering and analyzing
patterns, identifying anomalies, and extracting other
useful information in data underlying or related to the
subject matter of an audit through analysis, modeling,
and visualization for purpose of planning or
performing the audit.

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Audit Data Analytics (2 of 3)
• Fundamental considerations that need to be made by
the auditor to evaluate the appropriate use of ADAs
as an audit evidence-gathering tool include:
– Accessing the data
– Preparing the data
– Evaluate the relevance and reliability of the data
– Address circumstances in which an ADA identifies a
large number of exceptions for further consideration
– Document use of ADA

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Audit Data Analytics (3 of 3)
• Other advanced technologies that auditors can
leverage to increase the effectiveness and efficiency
of their audit procedures include:
– Artificial intelligence
– Robotics
– Machine learning
– Deep learning

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Learning Objective 6.7
Compute common financial ratios

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Common Financial Ratios (1 of 2)
• Auditors’ analytical procedures often include the use of
general financial ratios during planning and final review
of the audited financial statements
• When using these ratios, auditors must be sure to make
appropriate comparisons

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Common Financial Ratios (2 of 2)
• Some widely used financial ratios categories include:
– Short-term debt-paying ability
– Liquidity activity ratios
– Ability to meet long-term debt obligations
– Profitability ratios

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Let’s Discuss (5 of 9)
• When are analytical procedures required in an audit?
What is the primary purpose of analytical procedures
during each phase of the audit?
• Name the four categories of financial ratios and give an
example of a ratio in each category.
– What is the primary information provided by each
financial ratio category?

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Learning Objective 6.8
Understand the purposes of audit documentation

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Audit Documentation (1 of 2)
• Audit documentation is the record of the audit procedures
performed, relevant audit evidence obtained, and
conclusions the auditor reached
• It provides:
– A basis for planning the audit
– A record of the evidence accumulated and the results
of the tests
– Data for determining the proper type of audit report
– A basis for review by supervisors and partners

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Audit Documentation (2 of 2)
• Audit documentation is the property of the auditor
• A member in public practice shall not disclose any
confidential client information without the specific consent
of the client
• Auditing standards require that records for audits of:
– Private companies be retained for a minimum of 5
years
– Public companies to be retained for a period of not
less than 7 years

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Learning Objective 6.9
Prepare organized audit documentation

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Contents and Organization
• There is logic to the type of audit documentation
prepared for an audit and the way it is arranged in the
files
• Audit files include:
– Permanent files
▪ Contain data of a historical or continuing nature
pertinent to the current audit
– Current files
▪ Include all audit documentation applicable to the
year under audit

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Figure 6.3 Audit File Contents and
Organization

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