8 Types of Evidence Collection

1. Physical examination
2. Confirmation
3. Inspection
 Vouching
 Tracing
4. Analytical procedures
5. Inquiries of the client
6. Recalculation
7. Reperformance
8. Observation
 Inquiries of Client
• Client inquiries involve obtaining information from the client in
response to auditor questions.
• While such inquiries yield significant evidence, they lack
conclusiveness due to their origin not being independent and
potential bias from the client => weak evidence
• As a result, corroborating evidence is essential and should be
collected through alternative procedures.
 Recalculation
• Recalculation is the process of verifying a subset of calculations
performed by the client.
• This verification entails assessing the accuracy of the client's arithmetic,
encompassing actions such as
extending sales invoices and inventory
summing journals
subsidiary records
confirming calculations related to depreciation expense
prepaid expenses.
• Much of auditors' recalculation work is facilitated through spreadsheet
or audit software tools.
 Reperformance
• Reperformance is the auditor’s independent tests of client accounting
procedures or controls that were originally done as part of the entity’s
accounting and internal control system.
• Whereas recalculation involves rechecking a computation, reperformance
involves checking other procedures.
 Reperformance-Example
• The auditor may compare the price on an invoice to an approved price list,
or may reperform the aging of accounts receivable.
• Another type of reperformance is for the auditor to recheck transfers of
information by tracing information included in more than one place to
verify that it is recorded at the same amount each time.
• For example, the auditor normally makes limited tests to ascertain that the
information in the sales journal has been included for the proper customer
and at the correct amount in the subsidiary accounts receivable records
and is accurately summarized in the general ledger.
 MCQ from Farhat Lectures
• ​Which one of the following audit procedures
provides the most reliable evidence?
A- Confirmation
B- Recalculation
C- Reperformance
D- Observation

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 Observation
• Observation involves witnessing the execution of a process or task by others.
• Touring the client's premises for a general overview or observing individuals
as they carry out accounting duties to assess their adherence to assigned
responsibilities.
• While observation offers insights into process performance, it's constrained
by its time-specific nature.
• Relying solely on observation is problematic due to the potential for client
personnel to alter behavior in response to the auditor's presence.
• They might conform to protocols while being watched, yet revert to normal practices
when out of sight.
• Therefore, initial observations must be complemented with additional
corroborating evidence.