For instance, audit evidence is more reliable when it exists in documentary form rather than subsequent oral representation of the matters.
It is stated in ISA 315 (paragraph A.124) that the auditor should use assertions for classes of transactions, account balances, and presentation and disclosures in sufficient detail to form a basis for the assessment of risks of material misstatement and the design and performance of further audit procedures.
Inspection This involves physical examination of supporting accounting documentation, contracts, records and board of director minutes.
For instance, observation of payment of wages and salaries, physical count of inventory or opening of mail.
Recalculation, it means to check the mathematical accuracy of the figures in the book, for e.g; Reculation of Accruals and Prepayments This involves analysis of significant accounting ratios and trend performance including investigations of fluctuations that occur between the current financial performance with the previous one and check whether other information is consistent with such relationship.
For example, the auditor perform vouching to ensure such electricity expense occurred and whether correct amount was booked.