Can Anyone Explain Different Audit Techniques?


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Amen Bukhari Profile
Amen Bukhari answered
Inspection is concerned with review or examination of records, documents or tangible assets. The auditor can check many documents in order to examine the business transactions. Every entry is supported by vouchers. Inspection of record is made to note recording, authority and validity of data. This technique is commonly used by auditor. Observation means looking at an operation or procedures being performed by others to determine the manner of its performance. The auditor can observe the physical stock taking by management. He can see that accounting principles are applied in preparing accounting records. Observation is commonly used by the audit staff.

Inquiry means obtaining relevant information either written or oral from resource person within or outside the enterprise through formal or informal manner. The auditor can be collect data from debtors, creditors, bankers and other experts in the field to form an opinion. Confirmation is a response to an inquiry to prove certain data recorded in the books of business concern. The auditor can ask the management to inform the debtors for confirmation of their account balances. The auditor can collect information from debtors to ensure the accuracy of data. He can write letters to bank for supply of account balance kept by bank.

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