Audit procedures are essential for verifying the accuracy and reliability of financial statements. These procedures include analytical methods where auditors form expectations based on their understanding of the company and its environment.
select from source documents and then go and find in the accounting records
Vouching
select sample items from accounting records and then get source documents to support these transactions
Confirmations
Reliable because it comes from an independent source
Communicating with a 3rd party through a hard copy letter
Physical Examination
Considered very reliable
Extremely relevant to PPE, inventory, and cash on hand
Analytical Procedures
Moderately reliable
Auditors develop expectations about what will be reported in the financial statements based on their knowledge of the company, its industry, and the environment it operates in
Recomputation
Consists of footing and crossfooting
Very Reliable
Testing the mathematical accuracy and consistency of internal accounting records