Audit techniques are tools, methods or processes by means of which an auditor collects the necessary evidence to support his opinion in respect of the propositions or assertions submitted by the client to him for his examination. The techniques of auditing are concerned with the collection of adequate, valid and relevant evidence.
Kinds of Audit Techniques :
Audit techniques to be applied in collecting the required evidence by the auditor to support his opinion will differ from situation to situation.
The auditor must from time to time review, amend and modify his audit techniques in the light of each audit objective, nature and circumstances because no audit technique is final and suitable for all situations. The audit techniques may possible be classified into the following categories:-
1- Posting Verification: Tracing selected items recorded in one source to another source to establish the propriety and consistency of the recording process.
2- Extension Verification: Multiplying two or more amounts to prove the accuracy of the total.
3- Vouching: A careful examination of all original evidence such as invoices, statements, receipts, correspondence, minutes, contracts, etc., with a view to proving the accuracy of the entries in the books of account and to ascertaining so far as possible that no transactions have been omitted from the books.
4- Confirmation : An independent confirmation by the auditor with a third party to ascertain the correctness of the figures and validity of the clients’ records. The auditor obtains written statements and certificates from debtors and lenders, etc. The auditor adopts direct mail method.