In order to perform substantive tests and tests of control, auditors can use a variety of techniques. These are:
- Inspection (examining records, documents or assets).
- Observation (Watching a process or procedure being performed by someone else).
- External Confirmation (confirming something with a third party).
- Re-calculation (checking the mathematical accuracy of documents or records).
- Re-performance (auditor independently re-performs procedures or controls originally performed by the client).
- Analytical procedures (making comparisons of financial information to try to identify fluctuations or unusual results).
Evidence Gathering Technique
You can remember some of these techniques by using the mnemonic AEIOU.
- A analytical Procedures
- E External Confirmation
- I inspection
- O observation