Page 105 - CA Inter Audit PARAM

CA Ravi Taori
an inappropriate opinion when the financial statements are materially misstated) to an acceptably low
level. The sufficiency and appropriateness of audit evidence are interrelated.

Types of Audit Procedures & Methods of Collecting Audit evidence Old Course (N22E)
QNO Bhaskar CNO SA500.070/ SA500.080
500.04

The objective of auditing is to design and perform audit procedures in such a way as to enable the auditor
to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base

the auditor's opinion. This can be obtained by performing which procedures? Name the types of audit
procedures the auditor can perform to obtain audit evidence?
Answer ➢ Audit Procedures to Obtain Audit Evidence: Audit evidence to draw reasonable conclusions on which to
base the auditor’s opinion is obtained by performing:
(I) Risk assessment procedures; and
(II) Further audit procedures, which comprise:
i. Test of controls, when required by the SAs or when the auditor has chosen to do so; and
ii. Substantive procedures, including tests of details and substantive analytical procedures.

➢ Audit procedures to obtain audit evidence can include
(a) Inspection
(b) Observation
(c) External Confirmation
(d) Recalculation
(e) Reperformance
(f) Analytical Procedures
(g) Inquiry

Methods of Collecting Audit Old Course --(P16M/M16M/M17R/N17M/M18R/M18M/N18M/N18R/
QNO Evidence M19R/N19R/N19E/N22E)
500.05 Bhaskar CNO SA500.080/
SA500.100/ SA500.140
What are the various audit procedures to obtain audit evidence? Mention the same in brief.
OR
Mr. A was appointed statutory auditor of P Ltd., but he was not able to gather the sufficient audit evidences.
Discuss how he should proceed to gather more audit evidences.
OR
What are the audit procedures to be performed by the Auditor to obtain Audit Evidence to draw
reasonable conclusions on which he can base the audit opinion
OR
Inquiry is one of the audit procedures to obtain audit evidence.
OR
Evaluating responses to inquiries is an integral part of the inquiry process. Explain
OR
“Inquiry consists of seeking information of knowledgeable persons, both financial and non- financial, within
the entity or outside the entity. Inquiry is used extensively throughout the audit in addition to other audit
procedures”. Explain.
OR
Inquiry is used extensively throughout the audit in addition to other audit procedures. Explain.
Answer ➢ Observation
Observation consists of looking at a process or procedure being performed by others, for example, the
auditor’s observation of inventory counting by the entity’s personnel, or of the performance of control
activities. Observation provides audit evidence about the performance of a process or procedure but is
limited to the point in time at which the observation takes place, and by the fact that the act of being
observed may affect how the process or procedure is performed.

➢ Inspection
• Definition
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