Audit procedures versus audit evidence
The difference between an audit procedure and the evidence it produces, how to link both to an assertion, and how a working paper should record each.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
"Receivables circularisation performed, see attached." Attached is the list of customers who were sent letters. There are no replies, no follow-up and no conclusion, and the step is ticked as complete.
That paper records an action and nothing else. It is one of the most common gaps a reviewer finds, and it comes from blurring two things the standards keep apart: the procedure, which is what the auditor did, and the evidence, which is what the auditor got. A working paper needs both, and it needs them linked to the reason the work was done.
The procedure is the action; the evidence is the result
ACCA explains that audit procedures are the actions auditors carry out, while audit evidence is what the auditor obtains as a result of a procedure. Its example is the receivables circularisation: performing it is a procedure, and the replies from customers are evidence. ACCA's article on examining audit evidence develops the idea and is worth giving to new trainees in their first week.
The distinction sounds academic until a reviewer asks, "So what did you find?" A procedure answers "what did we do?" Evidence answers "what do we now know?" A paper with only the first cannot support a conclusion.
Confirmations, inspection, recalculation and more
| Procedure (the action) | Evidence (the result) |
|---|---|
| Sending confirmation requests to customers | The replies, reconciled to the ledger, and for non-replies the results of alternative work such as receipts after year end |
| Inspecting title deeds | The deed, with the owner, description and any bond or charge noted |
| Recalculating depreciation | The recalculation and its inputs, compared with the client's charge, with any difference explained |
| Observing the stock count | Notes of what was seen, test counts in both directions and cut-off details |
| Asking the financial director about litigation | The answer, who gave it and when, plus the attorneys' letter that corroborates it |
| Analytical review of payroll | The expectation and its inputs, the comparison, and the corroborated explanation of differences |
In every row, the left column can be finished without learning anything. The right column is where the audit happens.
Linking evidence to an assertion
Evidence only counts in relation to something. As quoted by ACCA, paragraph 6 of ISA 330 requires the auditor to design and perform further audit procedures whose nature, timing and extent are based on and responsive to the assessed risks of material misstatement at the assertion level. ACCA describes the assertions as those implicit when the directors state that the statements give a true and fair view: attributes that must be true for that view to hold.
So a complete paper follows a chain: the risk, the assertion it threatens, the procedure designed for it, the evidence obtained and the conclusion. Breaking the chain anywhere weakens the file. A confirmation reply, for instance, is good evidence that a customer exists and acknowledges the balance; it says much less about whether the customer will pay. If the risk was valuation, the confirmation alone has not answered it.
Done means a written response and its documents, in Achekam
In Achekam, each work item lists the procedures to perform and the documents required, and a step is marked done only with a written response and its documents, or set aside with a reason. Steps are never deleted. That rule builds the distinction into the file: the step is the procedure, while the response and the attached documents are the evidence. A step cannot be closed on the action alone.
ACCA explains that, under ISA 230, the auditor must record the identifying characteristics of the items tested, who performed the work and when it was completed, and who reviewed it and the date and extent of that review. The written response is the place for the identifying characteristics, such as invoice numbers, customer names and dates. Review is recorded in the paper's stages: each working paper moves through preparation, manager review, partner review, an optional engagement quality review, completion and lock, the preparer cannot also review it, and Achekam refuses any sign-off made by an AI. Sending a paper back for missing evidence needs a written reason, so the gap and its fix both stay on the record. Working paper review stages explains the sequence.
A common gap: procedure ticked, evidence missing
Patterns a reviewer sees again and again:
- confirmations sent, but replies neither attached nor reconciled to the ledger;
- "documents inspected" with no reference to which documents;
- a sample list with no results column;
- "agreed without exception" with no identifying details of the items agreed;
- a recalculation done mentally, with nothing to reperform;
- an answer from management recorded with no corroboration.
Each of them leaves a reviewer unable to tell whether the work supports the conclusion, which in practice means it does not.
Wording a conclusion
A conclusion should be short and should follow from the evidence above it. A useful structure has four parts: what was done, to what, what was found, and what it means for the assertion.
In words: "We sent confirmation requests to the selected customer balances listed on this paper. Replies agreed for most; the differences on the rest were timing items cleared by receipts after year end, and alternative procedures on the non-replies found no exceptions. We conclude that receivables exist at year end. Valuation is addressed on the impairment paper."
Avoid conclusions that could sit on any paper, such as "the balance appears fairly stated". They tell the reviewer nothing the heading did not. For the documentation standard as a whole, see audit documentation under ISA 230.
Next time you review a paper, cover the procedure column with your hand and read only the evidence. If you cannot tell what the team learned, the work is not finished.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
