Basic Concepts
In a nutshell: Audit evidence supports conclusions; documentation shows work performed.
## What Counts as Audit Evidence?
Audit evidence includes all the information auditors use to support their conclusions. This can be physical, documentary, electronic, or testimonial.
## Gathering Evidence
Common procedures:
- **Inspection:** Reviewing documents or assets.
- **Observation:** Watching processes in action.
- **Inquiry:** Asking questions.
- **Confirmation:** Verifying with third parties.
- **Recalculation:** Checking math accuracy.
## Documentation
Auditors must document their work in detailed files. Good documentation:
- Shows what work was done
- Supports audit conclusions
- Allows review by others
## Quality of Evidence
**Sufficiency** (quantity) and **appropriateness** (quality) are key. Reliable evidence is obtained from independent sources and direct auditor observation.
Examples
- An auditor inspects invoices to verify sales.
- A CPA documents the steps taken to test inventory counts.