There Are Seven Types of Audit Evidence: Physical Examination, Confirmation

question 8

Essay

There are seven types of audit evidence: physical examination, confirmation, documentation, observation, inquiries of the client, reperformance, and analytical procedures. For each of the following types of audit tests, indicate the type(s) of evidence that can be obtained through the test: (1) tests of controls, (2) substantive tests of transactions, (3) analytical procedures, and (4) tests of details of balances.

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Definitions:

Internal Control Procedure

Processes undertaken by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Bank Reconciliation

The method of aligning and scrutinizing the numbers in financial records with the ones shown on a bank statement.

Aging of Accounts Receivable

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding, helping to determine credit and collection policies.

Allowance for Doubtful Accounts

A contra asset account used to estimate the portion of a company's accounts receivable that may not be collected.