Audit and Assurance · Audit sampling and other means of testing

Other Means of Testing: Audit Procedures for ACCA Audit and Assurance

Updated 11 October 2026 · Fact-checked

Audit procedures are the methods an auditor uses to gather audit evidence: inspection, observation, inquiry, external confirmation, recalculation, reperformance and analytical procedures. To answer an exam question, name the procedure, say exactly what you do, state what you examine, and link it to the assertion or risk being tested.

Understand Other Means of Testing: Audit Procedures

An auditor must obtain sufficient appropriate audit evidence to support the opinion. Evidence is gathered by performing audit procedures. ISA 500 describes the main ways of doing this. Each one has its own strengths and weaknesses.

The core procedures are:

Inspection: examining records, documents or tangible assets. Inspecting a supplier invoice or a delivery note is document inspection. Looking at a vehicle or a machine is inspection of an asset.
Observation: watching a process or procedure being done by others, such as the client's staff counting inventory. It only proves what happened at the time you watched.
Inquiry: asking questions of management, staff or third parties, inside or outside the entity. Answers are often weak evidence alone, so you corroborate them.
External confirmation: getting a direct written response from a third party, for example a bank, a customer or a lawyer. It is usually reliable because it comes from outside the client.
Recalculation: checking the arithmetic accuracy of documents or records, for example re-adding an inventory listing or recomputing depreciation.
Reperformance: the auditor independently carries out a procedure or control that the client originally performed, for example redoing a bank reconciliation or repeating a credit-approval check.
Analytical procedures: evaluating financial information by studying plausible relationships between financial and non-financial data, and investigating any unexpected fluctuations.

The difference between recalculation and reperformance trips up many students. Recalculation is about numbers: you check the maths. Reperformance is about a process or control: you do the whole thing again yourself, which may include maths but also judgement and following steps.

Auditors also use computer-assisted audit techniques (CAATs), such as audit software and test data. These are not separate types of evidence. They are tools that carry out the procedures above, such as recalculating or analysing a whole population quickly.

Reliability of evidence depends on its source and form. Evidence from external sources, obtained directly by the auditor, and in written or original form is generally more reliable. Inquiry alone is not normally sufficient evidence and is generally less reliable than other evidence.

Key rules to remember

Reliability of evidence (rule of thumb): More reliable: external > internal; direct > indirect; original > copy; written > oral; A general guide, not an absolute rule. Internal evidence from strong controls can be more reliable than external evidence from a weak source.
Recalculation vs reperformance: Recalculation = check the arithmetic; Reperformance = repeat the procedure or control independently; Use the right term in the exam. Redoing a bank reconciliation is reperformance.
Analytical procedure comparison: Expected value vs recorded value → investigate differences above the threshold; Build your expectation first, then compare, then investigate the unexpected differences.

How to solve Other Means of Testing: Audit Procedures questions

Use this method for any question asking you to list or design audit procedures.

1Identify the balance, transaction or area, and the assertion or risk the question targets, such as existence of inventory or completeness of liabilities.
2Choose procedures that suit that assertion. For existence, think inspection, observation or confirmation. For completeness, think from the source documents to the records, and subsequent payments.
3Name the procedure type, such as inspect, observe, confirm or recalculate.
4State the action precisely: what document, which items, which direction, and what you compare it to.
5Say what you are looking for, such as agreement to the ledger, correct dates, authorisation or valuation at the lower of cost and net realisable value.
6Link back to the assertion or risk in a few words, then move to the next procedure. Aim for one clear mark per procedure.

Quickest way: Verb, document, check

When to use it: Use this when a Section B constructed response question or Section A OT case asks for audit procedures and time is short.

Start each point with a verb: inspect, observe, inquire, confirm, recalculate, reperform, compare.
Add the specific item: the supplier invoice, the goods received note, the bank statement.
Finish with the check: agree to the ledger, check the date, check the amount, check authorisation.
Write one line per procedure, and do not describe the theory of the procedure.
For OT questions, match the procedure to its definition: numbers only means recalculation, repeating a control means reperformance, outside third party means confirmation.

Common mistakes in Other Means of Testing: Audit Procedures

Writing vague procedures such as 'check the inventory' or 'review the invoices'.
Students know the area but do not state the action, item or purpose.
Fix: Use the verb, item, check pattern: 'Inspect a sample of sales invoices and agree the price to the approved price list.'
Confusing recalculation with reperformance.
Both involve redoing something, so they look alike.
Fix: If you only check the maths, it is recalculation. If you repeat a control or process independently, it is reperformance.
Relying on inquiry alone as evidence.
Asking management feels easy and quick.
Fix: Treat inquiry as a starting point and corroborate with inspection, confirmation or other evidence.
Describing a procedure for the wrong assertion or direction.
Students do not pause to ask which assertion is at risk.
Fix: For existence, select items from the ledger and trace them to the asset or supporting document. For completeness, select items from the source documents or the physical assets and trace them to the ledger.
Treating CAATs as a separate type of evidence.
CAATs appear as their own topic and sound like a distinct method.
Fix: Explain CAATs as tools that perform procedures, such as recalculation, analysing data or selecting items, across the entire population.
Doing analytical procedures as just a list of ratios.
Students stop once the ratio is calculated.
Fix: Form an expectation, compare to the recorded figure, then investigate the unexpected differences and corroborate explanations.

Worked examples

Example 1

You are auditing a manufacturing company's year-end inventory. State four audit procedures to address the existence of inventory, and name the type of procedure used in each.

Show the solution

The assertion is existence, so we need evidence that the inventory recorded physically exists.
Procedure 1 is observation: attend the year-end inventory count and watch whether staff follow the count instructions.
Procedure 2 is inspection of inventory: perform test counts yourself. Select items from the inventory listing and find them on the warehouse floor, then select items on the floor and trace them to the count records. Agree your counts to the client's count records.
Procedure 3 is confirmation: obtain written confirmation from third parties holding inventory on the company's behalf.
Procedure 4 is inquiry: ask the count supervisor and warehouse manager whether any inventory is held off-site or on consignment, so you can identify items to confirm or exclude. Corroborate the answers with documents.

Answer: Observation of the count, inspection of inventory through test counts, external confirmation of inventory held by third parties, and inquiry about off-site or consignment stock all support existence.

Exam tips

Always give a specific action, item and check in each procedure. Generic phrases earn few marks.
In OT questions, read the definition carefully. Words like 'independently carried out the control' signal reperformance, and 'arithmetical accuracy' signals recalculation.
Match procedures to the assertion. If the question says completeness, do not write existence procedures.
For analytical procedure questions, show the sequence: expectation, comparison, investigation, corroboration.
When asked about CAATs, link them to a task such as recalculating balances, selecting samples or finding duplicates, and mention that the output still needs auditor review.

Other Means of Testing: Audit Procedures: frequently asked questions

What is the difference between recalculation and reperformance in audit?

Recalculation checks the arithmetical accuracy of documents or records. Reperformance means the auditor independently carries out a procedure or control that the client performed. A bank reconciliation redone from scratch is reperformance.

Is inquiry enough audit evidence?

Usually not. Inquiry produces oral evidence from the client, which is less reliable. You should corroborate it with other procedures such as inspection or confirmation.

Are analytical procedures substantive procedures?

They can be used in risk assessment, as substantive procedures, and in the overall review near the end of the audit. The purpose in each stage is different, so state which stage the question is about.

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

Start each with a verb, name the item you examine, and state the check you are making. Keep each procedure to one point and link it to the assertion or risk in the question.