May give evidence of ownership (rights and obligations), e.g. title deeds May give evidence that a control is operating, e.g. invoices stamped paid or authorised for payment by an appropriate signature.

**SA 500 Audit Evidence identifies eight types of evidence gathering procedure that the auditor can adopt to obtain audit **evidence.** **Inspection of documents and records** -May give evidence of ownership (rights and obligations), e.g. title deeds -May give evidence that a control is operating, e.g. invoices stamped paid or authorised for payment by an appropriate signature. -May give evidence about cut-off, e.g. the dates on invoices, despatch notes, etc. -Confirms sales values and purchases costs (i.e. by inspecting the invoice) -Inspection of tangible assets -Will usually give pretty conclusive evidence of existence! -May give evidence of valuation, e.g. obvious evidence of impairment of inventory or non-current assets. **Observation** -Involves looking at a process or procedure. -May well provide evidence that a control is being operated, e.g. double staffing or a cheque signatory. -You need to remember that this is only evidence that the control was operating properly at the time of the observation, and the auditor's presence may have had an influence on the client's staff's behaviour. -Observation of a one-off event, e.g. an inventory count, may well give good evidence that the procedure was carried out effectively. **Enquiry** -Whilst a major source of evidence, the results of enquiries will usually need to be corroborated in some way through other audit procedures. This is because responses generated by the audit client are considered to be of a low quality due to their inherent bias. -The answers to enquiries may themselves be corroborative evidence. In particular they may be used to corroborate the results of analytical procedures. -Management representations are part of overall enquiries. These involve obtaining written responses from management to confirm oral enquiries. These are considered further in chapter on completion and review. **Confirmation** -This refers to the auditor obtaining a direct response (usually written) from an external, third party. -Examples include: * circularisation of receivables; *confirmation of bank balances in a bank letter; *confirmation of actual/potential penalties from legal advisers; and *confirmation of inventories held by third parties. -May give good evidence of existence of balances, e.g. receivables confirmation. -May not necessarily give reliable evidence of valuation, e.g. customers may confirm receivable amounts but, ultimately, be unable to pay in the future. **Recalculation** -This involves checking the arithmetical accuracy of the client's calculations, e.g. depreciation amounts. **Reperformance** -This involves reperforming client procedures, e.g. test checking inventory counts. **Analytical procedures** -These involve the comparisons of sets of data to identify trends and understand the relationships between the sets of data.

May give evidence of ownership (rights and obligations), e.g. title deeds May give evidence that a control is operating, e.g. invoices stamped paid or authorised for payment by an appropriate signature. May give evidence about cut-off, e.g. the dates on invoices, despatch notes, etc. Confirms sales values and purchases costs (i.e. by inspecting the invoice) Inspection of tangible assets

ISA 500 Audit Evidence identifies eight types of evidence gathering procedure that the auditor can adopt to obtain audit evidence. Inspection of documents and records May give evidence of ownership (rights and obligations), e.g. title deeds May give evidence that a control is operating, e.g. invoices stamped paid or authorised for payment by an appropriate signature. May give evidence about cut-off, e.g. the dates on invoices, despatch notes, etc. Confirms sales values and purchases costs (i.e. by inspecting the invoice) Inspection of tangible assets Will usually give pretty conclusive evidence of existence! May give evidence of valuation, e.g. obvious evidence of impairment of inventory or non-current assets. Observation Involves looking at a process or procedure. May well provide evidence that a control is being operated, e.g. double staffing or a cheque signatory. You need to remember that this is only evidence that the control was operating properly at the time of the observation, and the auditor's presence may have had an influence on the client's staff's behaviour. Observation of a one-off event, e.g. an inventory count, may well give good evidence that the procedure was carried out effectively. Enquiry Whilst a major source of evidence, the results of enquiries will usually need to be corroborated in some way through other audit procedures. This is because responses generated by the audit client are considered to be of a low quality due to their inherent bias. The answers to enquiries may themselves be corroborative evidence. In particular they may be used to corroborate the results of analytical procedures. Management representations are part of overall enquiries. These involve obtaining written responses from management to confirm oral enquiries. These are considered further in chapter on completion and review. Confirmation This refers to the auditor obtaining a direct response (usually written) from an external, third party. Examples include: circularisation of receivables; confirmation of bank balances in a bank letter; confirmation of actual/potential penalties from legal advisers; and confirmation of inventories held by third parties. May give good evidence of existence of balances, e.g. receivables confirmation. May not necessarily give reliable evidence of valuation, e.g. customers may confirm receivable amounts but, ultimately, be unable to pay in the future. Recalculation This involves checking the arithmetical accuracy of the client's calculations, e.g. depreciation amounts. Reperformance This involves reperforming client procedures, e.g. test checking inventory counts. Analytical procedures These involve the comparisons of sets of data to identify trendS and understand the relationships between the sets of data

Method of obtaining evidence 1. Inspection This is the main method of getting the evidence of audit . Inspection means checks all records , documents , and physical assets and satisfy with their trust 2. Observation Observation is also main method of audit evidence . In this way auditor gets the Testimony of witnesses. After this auditor can reach on the pin points of truth . 3. Inquiry and Confirmation → Inquiry is research of internal and outside information relating to accounting. → Confirmation consists to responses on inquires . After true confirmation, auditor can trust and audit evidence . 4. Computation Computation is calculation of correctness of accounting data. 5. Analytical Review With the medium of Ratio analysis , auditor can check the accounting information , this is called analytical review.