The Sample - Types of Audit Evidence

In this episode of THE SAMPLE, Leita Hart-Fanta, CPA discusses the three types of audit evidence and gives an example of each.
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Welcome to The Sample, a quick discussion of auditing concepts and terms that will help you do your work. Conducting an audit in accordance with auditing standards is no small feat and I want to support you. We'll be referring to the GAO (https://www.gao.gov), IIA (https://na.theiia.org/Pages/IIAHome.aspx) and AICPA (https://www.aicpa.org) literature to bolster our conversations. Let's get started.

In this episode we answer the question, "What are the three types of audit evidence?" Now I love the auditing profession because we are a fact-based profession. We don't say things unless we can back it up with evidence, and I love that. We also are making a promise to the readers of our audit report that our opinions and conclusions are valid. Look at this paragraph that we put into our audit reports. If you're a performance auditor following Yellow Book standards, even if you're not, it's worth looking at the second sentence. We're promising here that we plan to perform this audit to obtain sufficient, appropriate evidence as a basis for our findings and conclusions based on our objectives.

Now there's a lot of learning that can come out of that sentence, but today let's just work on the evidence piece. Let's say that we're auditing a transit system for a city, and we want to put a number in our audit report that tells the reader how many people ride the bus on a monthly basis. We could go after the first type of audit evidence, which is testimonial evidence. We can ask the managers of the bus system, "How many people ride the bus?"

Read the rest at: https://yellowbook-cpe.com/types-of-a...
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