Audit evidence, assertions, sampling and transaction cycles
Evidence must answer a question
A procedure is useful because it addresses an assertion or criterion, not merely because it appears on a standard checklist. Inspecting an asset can support existence but does not necessarily establish ownership, complete recording or appropriate valuation. Tracing source documents into records can address completeness, while selecting recorded items and examining support can address occurrence. Direction matters, and the exact design depends on the population and engagement.
Sufficiency and quality
The amount of evidence and its relevance and reliability are related but different considerations. More copies of the same weak representation do not automatically overcome a quality problem. Source, circumstances, controls over preparation and the possibility of manipulation matter. External evidence can be valuable, but an external-looking document is not automatically authentic. Resolve contradictions rather than selecting only evidence supporting an early conclusion.
Tests and substantive work
Tests of controls investigate whether identified controls operated as required during the relevant period. Substantive procedures address the amounts and disclosures or other subject matter directly. A walkthrough can help understand a process but does not by itself prove year-long operating effectiveness. Inquiry alone may be insufficient for a conclusion requiring corroboration. Reperformance, recalculation, inspection, observation and analytical procedures provide different kinds of evidence.
Sampling and coverage
Define the population, unit, objective and selection method before interpreting a sample. An error found in selected items can require investigation of its cause, pattern and possible implications beyond those items. A large sample does not remove selection bias or an incomplete population. Statistical methods require the appropriate assumptions; a nonstatistical approach still requires disciplined judgment and a defensible connection to the objective.
Cycles and cut-off
Sales and collection work can examine occurrence, completeness, cut-off, rights and recoverability. Purchase and payment work needs attention to unrecorded liabilities and appropriate periods. Inventory work links quantities, condition, ownership and costing rather than treating a count as proof of every valuation claim. Bank evidence requires the correct entity, date and nature of the account or arrangement.
Controlled example
In a fictional audit, a team observes ten items on a warehouse floor and finds each in the ledger. That direction supports completeness for the observed items. It does not establish that every recorded item exists elsewhere or that all costs are recoverable. State what the evidence supports, identify its limits and design further work for the remaining questions.