How to Gather Audit Evidence

An auditor investigates a company’s finances and operations to determine whether the company’s records are accurate. In most cases, a CPA or certified auditor conducts an audit. If you are a business owner facing an audit, understanding how audit evidence is gathered can help you prepare for your upcoming audit. If you go through your records and company operations before the auditor arrives, the audit process may run more smoothly.[1]

  1. 1 Review records for completeness. All spaces of a financial ledger or form should be filled in, and each entry should have a verifiable date. If any spaces are blank, there should be some notation or explanation as to why the information wasn’t filled in.[2]
    • For records of meetings or interviews, the entry should include the action that was taken as a result and any other follow-up actions that were taken later.
    • Include the names of anyone involved in an entry, and their role in the company, if applicable. For example, if you have a list of deposits made into an account, each entry should include the names of the managers or employees who made the deposit.
  2. 2 Compare account balances and transactions to banking records. Financial ledgers are attached to a business banking or investment account. The company’s ledgers should reconcile against the bank’s records.[3]
    • In some cases, further investigation may be required. For example, if the company’s records note a $1,000 sale to a client, but only $500 was deposited into the company’s…
Sasha Harriet

Sasha Harriet

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Sasha Harriet

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