Did you know that emerging technologies are revolutionizing the way audit evidence is collected? With the adoption of technology in auditing, firms are finding new and efficient ways to gather crucial evidence for their audits. From data analytics software to artificial intelligence (AI) and even drones, these innovative tools are transforming the audit process.
In this article, we will explore the impact of technology adoption in auditing and discuss the best practices for audit evidence collection in the digital age. We will also delve into the key changes introduced by the Statement on Auditing Standards (SAS) No. 142, Audit Evidence, and how auditors can leverage technology to streamline their work. So, join us as we uncover the exciting advancements in audit evidence collection and discover how it can revolutionize the field of auditing.
Key Changes in SAS No. 142
SAS No. 142 brings significant changes to the audit evidence standard, introducing a principles-based approach to guide auditors in evaluating audit evidence. Unlike a step-by-step procedure manual, the new standard provides requirements and guidance that address the evolving business landscape and the need to assess information reliability from various sources.
The principles-based approach emphasizes the importance of auditors exercising judgment in the evaluation of audit evidence. Auditors are encouraged to consider biases and explore evidence that supports or contradicts management’s assertions, promoting a thorough and unbiased evaluation process.
Furthermore, SAS No. 142 highlights the use of automated tools and techniques, enabling auditors to leverage technology for remote work capabilities and analyze larger volumes of data. This integration of technology allows for more efficient and effective audit procedures.
The standard is designed to be forward-looking, ensuring its relevance in the current environment and beyond. It will be effective from December 15, 2022, and promises to revolutionize the audit evidence collection process with its principles-based and technology-driven approach.
Best Practices for Audit Evidence Collection
Proper handling of audit evidence is crucial for auditors to conduct accurate and reliable audits. By following the best practices outlined in an audit evidence collection checklist, auditors can ensure the integrity and effectiveness of their evidence collection process.
The checklist comprises three essential sections: requesting and tracking evidence, gathering and handling evidence, and using and disposing of evidence. When requesting evidence, auditors should identify reliable sources and determine if any assistance is required. It is crucial to be specific about the date ranges and data requirements to ensure accurate and relevant evidence is obtained.
Gathering and handling evidence involves careful consideration of the chain of custody, data security, and organization of both hard copy and digital evidence. Auditors should take steps to protect sensitive data, securely store physical documents, and encrypt digital copies to maintain their confidentiality and integrity.
Once the audit is completed, auditors should follow proper procedures for using and disposing of evidence. This includes scanning final evidence, returning originals to their rightful places, destroying unnecessary copies, and adhering to the audit data retention policies.
Enabling technology in evidence management plays a vital role in supporting the audit evidence collection process. Audit management systems equipped with evidence request, management, and tracking features can significantly enhance auditors’ ability to collect, gather, and utilize audit evidence efficiently.
By combining best practices and leveraging technology, auditors can ensure a robust and streamlined audit evidence collection process, ultimately leading to more accurate and comprehensive audit outcomes.
Nathan Chambers is an audit management expert with over a decade of experience in developing and implementing robust audit strategies for organizations across diverse industries. With a keen eye for detail and a passion for driving operational efficiency, Nathan brings a wealth of knowledge to his writing, offering practical insights and actionable advice to help businesses excel in audit management.