What is the purpose of an audit procedure?
I keep seeing procedures like inspect, inquire, trace, recalculate, and read minutes. How do I know what each procedure is trying to accomplish?
An audit procedure is an action designed to obtain evidence for a specific objective, risk, assertion, control, or conclusion. The procedure should not exist only because it appeared on last year's checklist.
Start with the conclusion you need to support. If the objective is to determine whether a control operated, the procedure might inspect approvals, reperform the control, or test a sample. If the objective is to determine whether a reported amount is supported, the procedure might trace records to source documents, recalculate amounts, or perform analytics.
A useful mental sequence is:
For CIA exam purposes, the strongest answer links procedure to purpose. A procedure is good when it produces relevant, reliable, and sufficient evidence for the conclusion being made.
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