Describe how audit evidence can be collected

What will be an ideal response?

Answer: Since the audit effort revolves around the identification, collection, and evaluation of evidence, most audit effort is spent in the collection process. To identify, collect, and evaluate evidence, several methods have been developed to assist in the effort. These methods include: 1) the observation of the activities being audited; 2) a review of documentation to gain a better understanding of the AIS; 3) discussions with employees about their jobs and how procedures are carried out; 4) the creation and administration of questionnaires to gather data about the system; 5) physical examination of tangible assets; 6) confirmation of the accuracy of certain information; 7) reperformance of selected calculations; 8) vouching for the validity of a transaction by examination of all supporting documentation; and, 9) analytical review of relationships and trends among information to detect items that should be further investigated. It is important to remember that only a sample of evidence is collected for audit purposes, as it is not feasible to perform audit procedures on the entire set of activities, records, assets, or documents that are under the review process in an audit.