Page 103 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Definition: The process of verifying the mathematical accuracy of documents or records.
Methods: Recalculation can be performed either manually or electronically.
Re-performance
Definition: Reperformance involves the auditor’s independent execution of procedures or controls that were
originally performed as part of the entity’s. internal control
Analytical Procedures
Definition: The process of evaluating financial information through the study of plausible relationships among
both financial and non-financial data. This includes investigating identified fluctuations and relationships that
are inconsistent with other relevant information or significantly deviate from expected amounts.
External Confirmation
Definition: Audit evidence obtained directly from a third party through a written response.
Medium: The confirmation can be in paper form, or via electronic or other mediums.

(CNO-SA500.040) Inspection & Inquiry in Detail Evidence
Inspection
Definition Involves examining records and documents whether internal or external. In paper/electronic
form/other media or physical examination of asset
Degree of Reliability: Depends on Reliability of records or documents:
• Source
• Original vs Duplicate
• Directly Received
Example of Use in TOC: Inspection of records to check evidence of authorisation (signature)
Example of Use in TOD:
• Inspect tangible assets gives evidence about existence but may not cover valuation & ownership.
• Inspection of financial instruments gives evidence of existence.
• Inspection of sales contract gives evidence about implementation of accounting policy, which affects many
assertions.
Inquiry (Shortcut: DMRI)
Definition: Inquiry involves seeking information from knowledgeable individuals, both within and outside
the entity, covering financial and nonfinancial data.
Method: Inquiry, which can be formal written or informal oral, is used extensively throughout the audit in
conjunction with other audit procedures.
Responses: Evaluating responses to inquiries is crucial, as they may provide new information, corroborative
audit evidence, or differing (Contradictory) information that may necessitate additional audit procedures.
Evidence about management’s Intent:
• Use Inquiry
• Corroborate responses by-
o Past history of carrying out stated information
o Current reasons for choosing course of action.
o Future ability to pursue specific course of action.
• May Obtain Written Representation

(CNO-SA500.060) Sufficiency and Appropriateness of Audit Evidence
Interrelationship
Interrelation: The sufficiency and appropriateness of audit evidence are interconnected.
Quality Impact: High-quality audit evidence reduces the quantity required.
Increase of Quantity: Increasing the amount of audit evidence cannot compensate for its poor quality.
Sufficiency & Factors Affecting Sufficiency

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