Forms of Evidence

• Observation, is mostly witnessing internal book-keeping procedures and system control. It involves attendance at wages pay out. Observation of stock-take, opening of receipting and mail and issuing procedures on the stores warehouse.
• Inspection: examining of physical assets to confirm their condition and their existence such an aid in determining their significance for accounts purposes. Perhaps it includes examining the records to ensure which internal control procedures have been carried out and book-keeping.
• Testimony from independent third parties. These are obtaining bank letters, debtor's circulation, lawyer's letters etc.
• Review of authoritative documents: like as e.g title deeds, loan and share certificates, contract, leases, supplier's invoices, , internal sales invoices and minutes of board meetings.
• Testimony from employees and management: This can be formal e.g. a letter of informal or representation for example replies to questions in questionnaires.
• Satisfactory internal control: Whether the volume of transaction is large for example sales, wages and salaries, purchases, receipts and payments so this may be the most require evidence.
• Calculations performed through the auditor: These provide him evidence of the correctness of many figures.
• Review of post balance sheet events: In most cases the final audit is performed well after the finish of the year and although the present is a function of the future many assertions can be verified through reference to subsequent events.
• Relationship evidence: Evidence confirming truth concern one item may confirm the truth regards another, for example verifying the expense rates confirms to several extent ownership and existence of the property.
• Agreement along with expectation: comparison and computation of ratios and absolute magnitude along with those achieved in the past, through other companies, or else budgeted can assist in confirmation. Inconsistencies, odd else abnormal or unexpected items also that can alert the auditor.
• External events: The auditor has to consider external events in requiring his knowledge of current events to assist him in the assessment of such company's accounts. Therefore he must consider prevailing economic circumstances which affect his client; so he must consider the political legislation and situation also.