Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p8
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 8/21)
Character Range: 29933–33004

auditor obtains from audit evidence that is generated internally, such as evidence existing within the accounting records, minutes of meetings, or a management representation.

A13.         Information from sources independent of the entity that the auditor may use as audit evidence may include confirmations from third parties and information from an external information source, including analysts' reports, and comparable data about competitors (benchmarking data).

Audit Procedures for Obtaining Audit Evidence

A14.         As required by, and explained further in, ASA 315 and ASA 330, audit evidence to draw reasonable conclusions on which to base the auditor's opinion is obtained by performing:

(a)                Risk assessment procedures; and

(b)                Further audit procedures, which comprise:

(i)                 Tests of controls, when required by the Australian Auditing Standards or when the auditor has chosen to do so; and

(ii)               Substantive procedures, including tests of details and substantive analytical procedures.

A15.         The audit procedures described in paragraphs A18‑A29 below may be used as risk assessment procedures, tests of controls or substantive procedures, depending on the context in which they are applied by the auditor.  As explained in ASA 330, audit evidence obtained from previous audits may, in certain circumstances, provide appropriate audit evidence where the auditor performs audit procedures to establish its continuing relevance.[12]

A16.         The nature and timing of the audit procedures to be used may be affected by the fact that some of the accounting data and other information may be available only in electronic form or only at certain points or periods in time.  For example, source documents, such as purchase orders and invoices, may exist only in electronic form when an entity uses electronic commerce, or may be discarded after scanning when an entity uses image processing systems to facilitate storage and reference.

A17.         Certain electronic information may not be retrievable after a specified period of time, for example, if files are changed and if backup files do not exist.  Accordingly, the auditor may find it necessary as a result of an entity's data retention policies to request retention of some information for the auditor's review or to perform audit procedures at a time when the information is available.

Inspection

A18.         Inspection involves examining records or documents, whether internal or external, in paper form, electronic form, or other media, or a physical examination of an asset.  Inspection of records and documents provides audit evidence of varying degrees of reliability, depending on their nature and source and, in the case of internal records and documents, on the effectiveness of the controls over their production.  An example of inspection used as a test of controls is inspection of records for evidence of authorisation.

A19.         Some documents represent direct audit evidence of the existence of an asset,