Audit and Assurance · Assertions and audit evidence

Audit Procedures to Obtain Evidence in ACCA AA

Updated 11 October 2026 · Fact-checked

Audit procedures are the methods an auditor uses to gather evidence: inspection, observation, external confirmation, recalculation, reperformance, analytical procedures and inquiry. To answer exam questions, name the procedure, say exactly what you do, say which item you test, and link it to the assertion or risk.

Understand Audit Procedures to Obtain Evidence

Audit evidence is the information the auditor uses to reach an opinion. You cannot just look at the financial statements and give an opinion. You must collect evidence, and audit procedures are the ways you collect it.

There are seven procedures you must know:

Inspection: examining records, documents or physical assets. Looking at an invoice, or at a vehicle.
Observation: watching a process being performed by others, such as an inventory count.
External confirmation: getting a direct written reply from a third party, such as a bank or a customer.
Recalculation: checking the arithmetic accuracy of documents or records yourself.
Reperformance: you independently carry out a procedure or control that the client performed, such as re-matching an order to an invoice.
Analytical procedures: evaluating information by studying relationships and trends, and investigating unusual movements.
Inquiry: asking questions of management, staff or outside parties.

Procedures differ in reliability. Evidence from outside the client, in writing, and obtained directly by the auditor is more reliable. Inquiry alone is weak, because people may be wrong or biased. So inquiry should be backed up with other evidence.

Procedures are used for two purposes. Tests of controls check that a control operated effectively. Substantive procedures check that figures and disclosures are not materially misstated. They include tests of detail and substantive analytical procedures. Observation and reperformance are often used for controls. Confirmation, inspection and recalculation are common for balances.

In the exam, a good procedure is specific. It says what document or item, which direction, and what you are looking for. Link it to an assertion such as existence, completeness or valuation.

Key rules to remember

Seven procedures: Inspection, Observation, External confirmation, Recalculation, Reperformance, Analytical procedures, Inquiry; Learn the list. Each can be used in tests of controls or substantive procedures.
Good procedure sentence: Verb + specific item + source/document + what you are checking (assertion); Example: Inspect the title deed to confirm the entity owns the building (rights and obligations).
Control test vs substantive: Tests of controls = did the control operate? Substantive = is the figure right?; Tests of controls address control risk. Substantive procedures address risk of material misstatement in the figures.
Direction of testing: Existence/occurrence: from the ledger or records to supporting documents or the physical asset. Completeness: from independent sources or documents to the ledger.; Pick the starting point that fits the assertion.

How to solve Audit Procedures to Obtain Evidence questions

Use this method for any question asking you to describe procedures or to state which procedure fits.

1Read the requirement. Decide if it asks for tests of controls or substantive procedures.
2Identify the item (for example inventory, receivables or a control) and the risk or assertion involved.
3Choose the procedure type that gives the best evidence for that assertion.
4Write the procedure as an instruction: start with a verb such as inspect, observe, confirm, recalculate or reperform.
5Name the exact document, record or party, and the sample or period.
6State what you are looking for, such as agreement to the ledger, correct amount, or proper authorisation.
7Check you have given different procedures, not the same one repeated.
8Where marks allow, link to the assertion in a few words.

Quickest way: Verb, item, purpose

When to use it: Use under time pressure when a question asks for a list of procedures for one balance or control.

Write the list of seven procedures on your rough sheet.
For each one that fits, write one line: verb + item + purpose.
Aim for one mark per distinct procedure, so vary the type.
Put external confirmation or inspection first for balances, observation and reperformance first for controls.
Skip generic lines like 'check the figure'.

Common mistakes in Audit Procedures to Obtain Evidence

Writing vague procedures such as 'check the invoices'.
Students know the topic but do not say what is checked or why.
Fix: State the document, what it is compared to and the purpose. For example, agree the sales invoice to the despatch note and ledger to confirm occurrence.
Confusing reperformance with recalculation.
Both involve doing the work again.
Fix: Recalculation checks arithmetic. Reperformance repeats a control or procedure the client carried out, such as a reconciliation or matching process.
Using inquiry as the only evidence.
It is easy to write 'ask management'.
Fix: Treat inquiry as a starting point. Pair it with inspection, observation or confirmation.
Mixing up tests of controls and substantive procedures.
The same procedure types appear in both.
Fix: Ask what you are testing. If it is whether a control worked, it is a test of controls. If it is whether a balance or transaction is right, it is substantive.
Describing observation of a count as proof of ownership or valuation.
Students over-credit the procedure.
Fix: Observing a count mainly supports existence and condition. Use purchase documents for rights and obligations and cost or sales records for valuation.
Testing in the wrong direction.
Students forget which assertion they target.
Fix: For completeness, start from an independent source and trace to the records. For existence, start from the records and trace to the asset or document.

Worked examples

Example 1

You are auditing trade receivables of $2.4 million at a manufacturing client. Describe four audit procedures that provide evidence on the existence of the receivables balance.

Show the solution

Existence means the receivables are real. Choose procedures that link ledger balances to outside or physical proof.
Procedure 1 is external confirmation. Select a sample of customer balances and send confirmation requests directly from the audit team, then agree replies to the ledger.
Procedure 2 is inspection of sales documents. For non-replies, inspect the sales invoices and customer orders to prove the sale was ordered and billed.
Procedure 3 is inspection of after-date cash receipts. Agree payments received after the year end to the remittance advice and bank statement. Payment by the customer is strong evidence that the receivable was real.
Procedure 4 is inspection of proof of delivery. For sales recorded shortly before the year end, inspect despatch notes and signed proof of delivery to confirm the goods were despatched or delivered before the year end, so the receivable existed at that date.

Answer: Send external confirmations to a sample of customers and agree replies to the ledger. For non-replies, inspect sales invoices and customer orders. Inspect post year-end cash receipts against bank statements and remittance advices. For sales recorded near the year end, inspect despatch notes and proof of delivery to confirm the goods were despatched before the year end.

Example 2

A client requires a manager to approve every purchase order over $5,000 and signs the order. Describe how you would test this control and one substantive procedure on purchases.

Show the solution

This is a control test, so choose procedures that show the control operated: inspection, reperformance and observation.
Select a sample of purchase orders over $5,000 from the period. Inspect each for the manager's signature. This tests operation of the control.
Check the approver's authority against the authorisation limits for the order amount and supplier. Then reperform the control: independently re-check each sampled order against the limits and redo the approval check, and compare your result with the approval given. Note any exceptions.
Inquire of the manager about the process and observe an order being approved, as supporting evidence.
Substantive: select a sample of purchase invoices and agree to goods received notes, order and ledger entries, and recalculate the invoice totals. This addresses occurrence and accuracy.

Answer: Test of controls: inspect a sample of orders over $5,000 for manager approval and reperform the approval check against limits, supported by inquiry and observation. Substantive: agree sampled purchase invoices to orders and goods received notes, recalculate the totals and agree them to the ledger.

Exam tips

In Section B (constructed response), procedure requirements are usually marked at about one mark per specific, distinct procedure. Give separate, specific procedures and avoid repeats.
Start each procedure with a verb. It forces you to be specific.
In OT questions, match the procedure to the assertion. External confirmation is strong for existence of receivables and bank balances.
If asked to distinguish tests of controls from substantive procedures, define each in one line and give one example of each.
Do not list definitions when the requirement says 'describe procedures'. Marks go for what you would actually do.

Audit Procedures to Obtain Evidence in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Audit Procedures to Obtain Evidence: frequently asked questions

What is the difference between a test of control and a substantive procedure?

A test of controls checks whether a control operated effectively during the period. A substantive procedure checks whether a transaction, balance or disclosure is materially misstated. Both can use inspection, reperformance and other procedures.

What is the difference between recalculation and reperformance?

Recalculation is checking the arithmetic accuracy of documents or records. Reperformance is independently carrying out a procedure or control the client performed, such as a bank reconciliation or matching process.

How do I write audit procedures in the ACCA AA exam?

Begin with a verb, name the document or item, state the sample or source and say what you are checking. Link it to the assertion if the question asks. Keep each procedure separate.

Is inquiry enough audit evidence?

Usually not. Inquiry is useful but is weaker evidence on its own. Corroborate it with inspection, observation, confirmation or other procedures.