Basic methods commonly used in audit process

Commonly used audit methods include general methods and technical methods. The general method of audit is to divide the order of audit work and the scope or details of audit work. The technical method of audit refers to the technical means used in collecting audit evidence.

General methods of audit:

First, the sequence inspection method and reverse inspection method

According to the relationship between the sequence of audit work and accounting business processing procedures, the general methods of audit can be divided into sequential audit method and reverse audit method.

(1) follow-up method. Also known as the positive check method, it is a method of classified inspection according to the accounting business processing procedure, that is, it is checked according to the time sequence of all original vouchers and checked one by one. First check the original voucher, check and recheck the accounting voucher, then check the journal, general ledger and subsidiary ledger according to the voucher, and finally check and analyze the accounting statements with the general ledger and subsidiary ledger, and conduct a general inspection from beginning to end along the accounting processing procedure of "making documents-posting-closing-trial calculation".

This method is meticulous, comprehensive and complete. Because it is a step-by-step review, it is easy to be ignored and omitted. Therefore, the sequential audit method is more suitable for the audited units with imperfect internal control system, chaotic accounts and many problems. Its shortcomings are heavy workload, time-consuming and laborious, which is not conducive to improving audit efficiency and reducing audit costs.

(2) Reverse investigation method. Also known as the reverse check method, it is a method of checking against the bookkeeping procedure in the process of checking according to the opposite procedure of accounting business processing. Usually, we first check from the terminal of the bookkeeping program, find clues and doubts from the accounting statements or account books, and then check against the bookkeeping program. For example, from accounting statements to accounting books, to accounting vouchers, and finally to the original vouchers, that is, from the audit analysis of accounting statements, according to the always found and doubtful points, determine the audit focus, and then audit and check the relevant accounting books and vouchers, without having to audit all the items in the statements one by one.

Generally speaking, at the beginning of the audit, it is advisable to adopt the method of reverse audit, and grasp the key links of accounting errors and disadvantages by checking the accounting statements that reflect the comprehensive situation, and then determine the accounting books that need to be checked according to the determined key links for detailed investigation. When checking accounting vouchers and account books, in order to confirm whether there are accounting errors or clues, we can start with direct checking method and combine with reverse checking method. In a word, sequential query and reverse query can be used interchangeably. Reverse query in sequential query and sequential query in reverse query are combined and infiltrated with each other.

Second, detailed survey methods and sampling methods

Audit methods vary according to the scale of reviewing economic and business data and the scope of collecting audit evidence. There are two methods: detailed investigation and sampling.

(1) Detailed investigation method. Detailed audit, also known as detailed audit, refers to an audit method that examines all accounting data (including vouchers, account books and statements) of the audited entity in detail to judge and evaluate the legitimacy, authenticity and efficiency of the economic activities of the audited entity. The advantages of this method are easy to find problems, low audit risk and more correct audit results. Disadvantages are heavy workload and high audit cost. Therefore, in practical work, this method is generally not often used except for small enterprises and institutions with serious problems and incomplete inspection and few economic activities.

(2) Sampling method. Sampling audit, also known as sampling audit, refers to an audit method that extracts a part of the accounting data (including vouchers, account books and statements) of the audited entity for review, so as to infer whether there are errors and frauds in the whole, and then judge and evaluate the legitimacy, authenticity and efficiency of the economic activities of the audited entity. If sampling audit is adopted, if no obvious mistakes and disadvantages are found in the sampling samples, the accounting data that have not been extracted may not be rechecked. On the contrary, we should expand the sampling range or adopt the method of detailed investigation. The advantage of this method is that it can reduce the workload and cost of audit. The disadvantage is that it has great limitations. If the sample selection is improper, the auditor will make a wrong conclusion and the audit risk is greater. In order to avoid this situation, auditors usually need to evaluate the internal control system of the audited entity when adopting this method, so as to make the audit conclusion more reliable.

Technical methods of audit:

First, check

Inspection is the auditor's examination and verification of the reliability of audit records and other written documents.

(1) Review accounting records and written documents

Auditors shall examine the vouchers, account books, statements and other written documents of the audited entity. Through the review, we can find out the problems and doubts as audit clues, so as to further determine the audit focus and audit procedures. Specifically includes the following aspects:

1. Audit of accounting vouchers. Accounting vouchers include original vouchers and accounting vouchers, and the key point is to review the original vouchers.

2. Book review. Account books include general ledger, subsidiary ledger, journal and various auxiliary account books. Among them, the key is to review the subsidiary ledger and journal. The general ledger not only has the function of checking with subsidiary ledger and journal, but also can't find the problem itself. Because the registration basis of the general ledger is mainly the summary table of various accounting vouchers, which reflects the summary figures, it is not easy to find problems.

3. Review the report. The review report should focus on the balance sheet, income statement, cash flow statement, etc.

4. Review other records. Although other records are not an important part of accounting information, sometimes some problems can be found from them for audit clues. Such as factory certificate, quality inspection record, contract and agreement.

(2) Check the accounting records

Auditors should also check the reconciliation vouchers, account tables, account tables and account facts. Verify whether the records of both parties are consistent, and confirm whether the accounts are consistent through verification. If any discrepancy is found, other audit methods should be further adopted for follow-up audit. The contents of the inspection are as follows:

1, check the account table. It refers to checking report items with relevant account books to verify the authenticity and correctness of report indicators.

2. Check the accounts. Refers to the cross-checking with various related account books. Such as reconciliation between general ledger and subsidiary ledger and journal. Check whether the records of both parties are consistent through reconciliation. If it is inconsistent, it is necessary to check it further. There are some books to check. For example, check whether the total debit balance of each account in the general ledger is equal to the total credit balance. If it does not match, it means that there is an error in posting, and the account voucher should be further checked.

3. Check the accounts and vouchers. It refers to checking the records of subsidiary ledger and journal with accounting vouchers. Through verification, it is proved whether all vouchers have been recorded in the relevant account books, whether there are duplicates or omissions, and whether the contents and amounts recorded in the account books are consistent with the accounting vouchers as the basis of accounting. Generally speaking, if the account check result is normal, you can no longer check the account voucher.

4. Check the accounts. It refers to checking the sub-ledger records with the physical objects to find out whether the account amount is consistent with the actual amount. If not, the book records should be adjusted according to the actual amount. When checking, two people can cooperate, that is, one person looks at the accounts and one person reconciles them. In this way, we can find re-boarding, missing boarding and errors. For the accounts that have been checked correctly, the auditors should make certain marks on the right side of the original records to avoid repeated checking in the future. Inconsistent accounts should also be marked for further review by the original auditor or other successors in the future.

Second, the regulatory sector

Inventory supervision means that auditors supervise physical assets, cash, securities, etc. Conduct on-site inspection of the audited entity and conduct appropriate spot checks. Counting assets is an important method to verify whether the accounts are consistent.

Inventory methods include surprise inventory and notification inventory. The former is generally applicable to cash on hand, securities and valuables. The latter applies to the inventory of fixed assets, products in process, finished products and other property and materials. If the inventory objects are scattered in several places, they should be counted at the same time to prevent the audited units from having enough time to move east and west. Items that have been counted should be marked to avoid repeated counting.

Third, observe

Observation refers to the on-site observation of the audited entity's business premises, physical assets, related business activities and the implementation of its internal control.

Four. Asking and confirming

Inquiry is a written or oral inquiry made by auditors to relevant personnel.

Confirmation is a letter sent by the auditor to a third party to confirm the matters contained in the accounting records of the audited entity. If there is no reply or the auditor is not satisfied with the reply result, the auditor shall implement an alternative audit procedure to obtain the necessary audit evidence.

Verb (abbreviation for verb) calculation

Calculation refers to the auditor's checking calculation or other calculation of the data in the original vouchers and accounting records of the audited entity. Auditors often need to recalculate the number of vouchers, account books and statements in the audit process to verify their accuracy. Although the calculation work is complicated mechanically, it is of great significance and cannot be taken lightly, because the error of digital calculation or the intentional distortion of calculation results will have a great impact on the correctness of accounting data.

Intransitive verb analyzer

The analysis procedure is the auditor's analysis of the important ratios or trends of the audited entity, including the investigation of abnormal changes and the differences between these important ratios or trends and the expected amount and related information. Generally speaking, in the whole audit process, auditors will use the method of analytical review. For projects with abnormal changes, auditors should reconsider the appropriateness of the audit procedures adopted and increase the audit procedures when necessary to obtain necessary audit evidence.