Review Chapter 2: Audit Evidence (PSP_DAT5Cjune2020)

 Review Chapter 2: Audit Evidence (PSP_DAT5CJUNE2020)



Group Members:

1. Muhammad Hazry Shafiq Bin Zakaria    (10DAT18F1030)
2. Muhammad Faris Hakim Bin Jansari       (10DAT18F1099)
3. Thanesuwari A/P Ravi                              (10DAT18F1068)
4. Nurintan Balqis Binti Roslin                    (10DAT18F1085)
5. Nur Nasuha                                               (10DAT18F1093)

INTRODUCTION

An auditor applies various audit procedure to obtain audit evidence which enables him to form an opinion whether the financial statements of an entity are free from material misstatement and state a true and fair view or not.

Evidence collected by the auditor should support the contents of its audit report. Sufficiency of audit evidence is the measure of the quantity of audit evidence. Appropriateness of evidence is the quality of the evidence, such as its relevance and reliability to support the auditor’s opinion.

Refer to slide for more information: 

https://app.conceptboard.com/board/1fx5-365e-z78r-4s17-3ese

To get more information about audit evidence, do watch this video:

Questions:

Group 1: Define the meaning of audit evidence.
Group 3: Explain the purpose of having audit evidence.
Group 4: Identify the audit evidence source.
Group 5: Explain the procedures to obtain audit evidence.
Group 6: Explain the factors to be considered when collecting the audit evidence.
Group 7: Describe the purpose of setting the assertions.
Group 8: Differentiate types of evidence.

Comments

Aiza Sam said…
Kumpulan 3
Audit evidence refers to information or data that use or collect by auditors as part their audit works to conclude their opinion on whether or not financial statements are prepared in all material respect and in accordance with the applicable financial frameworks.

Before auditors could make the conclusion on the financial statements as a whole or any part, they need to make sure that the evidence they obtain is sufficient enough with appropriate quality to make the conclusion.

Sufficient and appropriate audit evidence is important for the auditor to form audit opinions.
Muhammad Muaz said…
This comment has been removed by the author.
Muhammad Muaz said…
GROUP 1
Audit evidence is evidence obtained by auditors during a financial audit and recorded in the audit working papers. Auditors need audit evidence to see if a company has the correct information considering their financial transactions so a C.P.A. (Certified Public Accountant) can confirm their financial statements.
Group 6-
the risk of material misstatement;
the materiality of the item;
the nature of accounting and internal control systems;
the auditor's knowledge and experience of the business;
the results of controls tests;
the size of a population being tested;
the size of the sample selected to test; and
the reliability of the evidence obtained.
siti aishah said…
This comment has been removed by the author.
siti aishah said…
GROUP 4 :
- External source
- Prepare by auditor
- Prepare by client
- Written form
- Original form
ainaa mastura said…
kumpulan 7

Assertions are characteristics that need to be tested to ensure that financial records and disclosures are correct and appropriate. If assertions are all met for relevant transactions or balances, financial statements are appropriately recorded.

The International Financial Reporting Standards (IFRS) are a set of accounting standards issued by the International Accounting Standards Board (IASB) and the IFRS Foundation aimed towards providing a common set of accounting rules that are consistent, transparent, and comparable internationally.

IFRS developed ISA315, which includes categories and examples of assertions that may be used to test financial records.
TAN YING HUA said…
Kumpulan 5
1. Inspection
It generally includes investigation of an item and referred to as looking at an item. E.g. Auditor examines the existence of vehicles disclosed in the company's books.
2. Observation
It refers to the observation of a certain process within the entity to rely on that process. E.g. The auditor follows the method of measuring inventories.
3. Inquiry / Enquiry
Inquiry is a procedure within or outside the institution to obtain information from a individual concerned. Audit can ask knowledgeable individuals to inquire into such matters and then evaluate the answers that will be followed by corroborating those responses with other audit proof.
4. Confirmation
It is a process of gathering information from the third party (external source of the client’s company). E.g. If an auditor wishes to place reliance on the payable balance of a vendor of the client’s company, an auditor may confirm it directly from the vendor externally.
5. Recalculation
This is a method of testing the mathematical accuracy of the reported transactions by recalculating the sample. For example, an auditor may recalculate the total of sampled individual’s client ledgers.
6. Re-Performance
It is a process of independently carrying out procedures or controls, which were originally performed by the client (e.g. re-performing the aging of year-end trade receivables)
7. Analytical procedure
Analytical procedures is known as the assessment and analysis of financial and/or non-financial data for appropriate ties and examination of unexplained fluctuations. For example, comparing the gross profit percentage of last year with those of this year and ensuring that adjustment is in line with expectations.
Chen Qiao Xin said…
Group 8

1)Inspections of physical /tangible assets
-The record, documents and physical assets inspected by auditors

2)Observation
-The activities withnessed by the audit e.g. the client's policy to segregate two different duties

3)Confirmation
-Documentary evidence from a third party to confirm the accurancy of certain information e.g. Bank confirmation

4)Recalculation
-The result from the recalculation of items in various documents

5)Analytical procedures
-The results from the evaluation of financial information.

6)Reperformance
-The result from the reperformance of procedures or control

7)Equiry
-The written or oral responses from cilents, employees or a third party e.g. information regarding the client's Internal control system

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