Auditing techniques are the practical methods of investigation and testing that the public accountant uses to verify the reasonableness of financial information that allows him to express his professional opinion.
The audit techniques are as follows:
1.- GENERAL STUDY
Appreciation of the physiognomy or general characteristics of the company, of its financial statements of the important, significant or extraordinary items and items. This assessment is made by applying the professional judgment of the Public Accountant, who based on his training and experience, will be able to obtain from the data and information of the company that he is going to examine, important or extraordinary situations that may require special attention. For example, the auditor can realize the fundamental characteristics of a balance, by simply reading the wording of the accounting entries, evaluating the relative importance of the charges and credits recorded. In this similar way, the auditor may observe the existence of extraordinary operations,by comparing the income statements of the previous year and the current one. This technique serves as an application guideline before any other.
The general study should be applied with care and diligence, so it is recommended that its application be carried out by an auditor with preparation, experience and maturity, to ensure a sound and comprehensive professional judgment.
2.- ANALYSIS
Classification and grouping of the different individual elements that make up an account or a given item, in such a way that the groups constitute homogeneous and significant units.
The analysis is generally applied to accounts or items of the financial statements to know how they are integrated and are as follows:
a) Balance analysis
There are accounts in which the different movements that are recorded in them are compensation for each other, for example, in a customer account, credits for payments, returns, bonuses, etc., are total or partial compensation of sales charges. In this case, the account balance is made up of a net that represents the difference between the different items that were recorded in the account. In this case, only those items that are part of the account balance can be analyzed. The detail of the residual items and their classification into homogeneous and significant groups is what constitutes the balance analysis.
b) Movement analysis
On other occasions, account balances are formed not by offsetting items, but by accumulating them, for example, in income statements; and in some accounts of cleared movements, it may happen that it is not feasible to relate the credit movements against the debit movements, or else. For particular reasons it should not be done. In this case, the account analysis must be done by grouping, according to homogeneous and significant concepts of the different debtor and creditor movements that make up the account balance.
3.- INSPECTION
Physical examination of tangible assets or documents, in order to verify the existence of an asset or a transaction registered or presented in the financial statements.
On various occasions, especially with regard to asset balances, accounting data are represented by tangible assets, credit instruments or other types of documents that constitute the materialization of the data recorded in accounting.
Similarly, some of the operations of the company or its working conditions may be covered by titles, documents or special books, in which, in a reliable way, the proof of the operation carried out remains. In all these cases, the authenticity of the account balance, the operation carried out or the circumstance that is being verified can be verified, by means of the physical examination of the goods or documents that protect the asset or the operation.
4.- CONFIRMATION
Obtaining a written communication from a person independent of the company examined and who is able to know the nature and conditions of the operation and, therefore, confirm in a valid way.
This technique is applied by requesting the audited company to address the person to whom the confirmation is pruned, so that they can reply in writing to the auditor, giving the information that is requested and can be applied in different ways:
- Positive.- Data is sent and they are asked to answer, whether they are satisfied or not. This type of confirmation is used, preferably for the asset. Negative.- Data is sent and a reply is requested, only if they are dissatisfied. It is generally used to confirm liabilities or credit institutions.
5.- INVESTIGATION
Obtaining information, data and comments from the officials and employees of the company itself.
With this technique, the auditor can obtain knowledge and form a judgment on some balances or operations carried out by the company. For example, the auditor can form his opinion on the accounting of debtor balances, through information and comments obtained from the heads of the company's credit and collections departments.
6.- DECLARATION
Declaration in writing with the signature of the interested parties, of the result of the investigations carried out with the officials and employees of the company.
This technique is applied when the importance of the data or the results of the investigations carried out warrant it.
Even though the statement is a convenient and necessary auditing technique, its validity is limited by the fact that it is data provided by people who participated in the operations carried out or had interference in the formulation of the financial statements that are being examined.
7.- CERTIFICATION
Obtaining a document in which the truth of a fact is assured, generally legalized, with the signature of an authority.
8.- OBSERVATION
Physical presence of how certain operations or events are carried out.
The auditor makes sure of the way in which certain operations are carried out, noticing visually how the company's personnel carry them out. For example, the auditor can obtain the conviction that the physical inventories were carried out in a satisfactory way, observing how the work of preparing and carrying them out is carried out.
9.- CALCULATION
Mathematical verification of some game.
There are items in the accounting that are the result of computations performed on predetermined bases. The auditor can ensure the mathematical correctness of these items by independently calculating them.
In the application of the calculation technique, it is convenient to follow a different procedure from the one originally extended in the determination of the items. For example, the amount of interest earned originally calculated on the basis of monthly calculations on individual operations, can be verified by a global calculation by applying the annual interest rate to the average of the investments of the period.
BIBLIOGRAPHY
Audit standards and procedures. 21st. Edition. Editorial: Instituto Mexicano de Contadores Públicos AC Audit Standards and Procedures Committee
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