Audit Procedures: Types, Example, List

Auditors examine a company’s financial statements to provide an opinion. However, they must support this opinion through audit evidence. Auditors must collect this evidence to draw reasonable conclusions regarding the fairness and truthfulness of the financial statements. Usually, auditors use various methods or techniques to gather audit evidence. These primarily include audit procedures.

What are Audit Procedures?

Auditing standards require auditors to perform audit procedures to help gather evidence. This process requires them to ensure the audit evidence is sufficient and appropriate. Therefore, audit procedures can be defined as the techniques used to gather audit evidence. Similarly, these procedures allow auditors to determine the quality of the financial information provided by the client.

Audit procedures support auditors in providing or expressing their opinion. Usually, these procedures differ from one client to another. Several factors play a role in the techniques auditors may deem appropriate for use in specific conditions. Usually, auditors prepare these procedures during the audit planning stage. However, these procedures may change as auditors consider their clients’ situations.

What are the types of Audit Procedures?

Audit procedures may involve various techniques or methods. Usually, these techniques may differ based on several factors. Some of these factors include the type and nature of the client, the areas being examined, the materiality, etc. Each audit procedure has its use in specific cases. Auditors must determine which of these to use. The two types of audit procedures include the following.

Substantive Procedures

Substantive procedures are methods used by auditors to evaluate financial statements. Usually, these involve techniques to assist auditors in gathering conclusive evidence. Substantive procedures help auditors verify the various audit assertions used in preparing the financial statements. On top of that, they are crucial in detecting material misstatements in financial statements.

Analytical procedures

Analytical involve evaluations of financial information by analyzing plausible relationships between financial and non-financial data. However, these procedures may not apply to all areas. Nonetheless, analytical procedures are a critical part of any auditing process. These procedures are less complex compared to substantive procedures. They usually include comparisons and logical checks.

List of Audit Procedures

Auditing standards provide a list of audit procedures to use for various items. This list covers all the critical techniques that auditors can use in examining financial statements. Usually, the most common audit procedures that auditors use include the following.


Confirmation requires auditors to collect audit evidence from third-party or internal sources.


Inquiry involves gathering information from the management through verbal communication.


Inspection involves checking every transaction against written steps to ensure accuracy.


Observation involves inspecting specific processes.


Recalculation involves recalculating to check the mathematical accuracy of various calculations.


Reperformance requires auditors to reperform a process to identify weaknesses.


An auditor may evaluate a client’s bank balance through confirmations. This process involves sending written confirmation letters to the bank to confirm the balance. Similarly, auditors may check and compare various expenses with previous years to ensure they fluctuated as expected. They can investigate the variances to identify anomalies.


Audit procedures are techniques and methods used by auditors when collecting audit evidence. These procedures involve various processes to examine the financial statements. Usually, auditors can use two types of audit procedures, including substantive and analytical procedures. Audit procedures may come in various forms. Auditors can decide which method to use in their specific circumstances.

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