Audit Evidence: Definition & Types  

After the audit is done, auditors are required to produce an audit report based on the audit evidence stating the financial standing of a client or an organisation. 

Auditing and the processes involved with it sound really intimidating for most people and businesses. Many think that getting audits done doesn’t predetermine the future of a business. Auditing, though regarded as a taxing duty, is helpful in discovering potential measures you can do to grow your business or perhaps your SMSF.

An audit is a methodical and independent inspection of financial statements, asset records, and documents of an organisation as presented in the annual report. The audit’s purpose is to establish whether the information presented is fair and that it reflects the financial position of an organisation.

SMSF audits are done to ensure that these funds are in compliance with the Australian Tax Office (ATO)  regulations and ASIC  guidelines. 

What Is Audit Evidence?

Audit evidence refers to facts or data used by auditors as part of their audit process to draw their judgment on whether or not financial statements are compiled in all substantive terms and in compliance with the financial mechanisms applicable.

In order to justify the audit evidence, an auditor undergoes different procedures and audit processes to form a credible opinion on an organisation's financial climate.

Process in Obtaining an Audit Evidence

Auditing is not a one step process. Some basic and simple audits take hours to complete, while more complex audits take weeks or even months. Auditors, may it be for SMSFs or organisations use many ways to obtain audit evidence to draw a comprehensive conclusion.

These procedures include  audit enquiry, audit observation, audit inspection, analytical procedure, audit recalculation, audit confirmation, and  lastly re-performance.


This is one of the major sources of evidence. Results gathered from audit enquiries need to be verified through different audit procedures. Why do we need to verify results from audit enquiries? It is because answers generated from audit enquiries tend to be biased and are deemed to be low quality. 

Corroborative evidence may be the result of the investigations themselves. In addition, the results of analytical procedures can be corroborated.

Representations from executives are part of general inquiries. Which requires that management receive written responses to validate oral inquiries. These are also listed in the completion and analysis section.

Audit Inspection 

There are two types of audit inspection procedures: inspection of documents and records and inspection of tangible assets

Inspection of documents and records

Inspection of tangible assets


This refers to an external entity or  third party’s direct response. Audit confirmation usually comes from customers or banks. This includes bank balances in a bank letter, circularisation of receivables, confirmation of inventories held by third parties.and customer receivables.


This involves checking the financial accuracy of the client's calculations. It is in identifying clients’ computation of its value, depreciation, asset gains, and losses, auditors know if a client is fair in accounting its financial standing.


This procedure usually involves an auditor reperforming client procedures such as est checking inventory counts and other operations to measure if the declared quality and number are valid.

Analytical procedures

To perform an analytical procedure, an auditor compares sets of current data to identify trends and analyze the relations across the corroborated data gathered from various audit evidence. 

Types of Audit Evidence

Many SMSF auditors use audit evidence in multiple and different forms and sources. An audit evidence could be physical or intangible data or information secured by the auditor or provided by the client or organisation . Below are some examples of audit evidence:


The quality of an audit evidence is vital in the auditing processes. Many clients have produce and provide auditors the necessary information but not all are of quality. The quality of an audit evidence is often based on its for and source. High quality audit evidence are usually prepared by expert auditors and low quality audit evidence are often testimonials and non-written accounts.


A seasoned auditor treats every auditing case with utmost confidentiality and prudence. At Super Audits, we have licensed and registered auditors for all your auditing needs. 


If you have any queries regarding our auditing services, please email us or phone 1300 AUDITOR (1300 283 486) during office hours Monday to Friday.

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