Audit Procedures; To an auditor, internal audit procedures are the working tools used and applied for identification and examination of that evidence which have been traced by audit techniques. A comprehensive catalog of audit procedures is not easy to prepare. Judgment, with a range of experience, remains the basis for the determination of the type and extent of audit procedures.


The meaning of the word ‘procedure’ is ‘method of conducting an affair’ and that of ‘technique’ is the method of performance or execution’ or ‘course of action taken or an act performed’. Techniques are more or less rigid and limited, but procedures can be many and varied depending on objective considerations for the acts to be performed or actions to be taken.


The following may be known as the principal of audit procedures:

  1. Reviewing, testing and evaluating the internal accounting controls relating to inventories, purchases, payroll, sales invoice preparation, stock valuation, depreciation accounting and analysis, routing of invoices etc.
  2. Inspecting, counting and calculating the different assets relating to cash, stocks, investment, plant and equipment, furniture;and determining that the inventory is calculated properly at the lower of cost or market price in accordance with generally accepted accounting principles consistently applied; and obtaining confirmation in regard to the validity of debtors and creditors balances, etc.
  3. Obtaining the proof of accuracy – A copy of final inventory listing can be obtained and its clerical accuracy checked and tested; obtaining the earnings records of employees and checking the same for accuracy with the original copies of appointment-cum-increment letters; Similarly, appropriation of profit and the board’s resolutions.
  4. Reconciling, comparing and confirming – Sales vouchers may be prepared to accept with the full charges to customers. The reconciliation between the actual cost account records and the books of financial accounts is an example. The Bank reconciliation statement provides a good determine of confirmation. The truth that the inventory is in the right place to the client and that any lien on the inventory is disclosed properly can be evaluated and confirmed from the minutes of the board of directors for indications of pledges or assignments.
  5. Observation and investigation about any excess, slow-moving, superseded, or indisputable inventory.
  6. Accounting of all pre-numbered inventories label before and after the physical stock-taking.
  7. Verification as to the evidences relating to the ownership of assets and existence of assets and liabilities, as a part of auditing practices and procedures, is the principal duty of the auditor before he certifies that the assets and liabilities that appear in the balance sheet exhibit ‘true and fair view’ of the state of affairs of the business.


Now, we can draw distinctions between auditing procedures and auditing techniques as follows:

  • A comprehensive catalog of audit procedures cannot be organized as these are deal with the varying audit objectives, but such catalog can be sketched out for audit techniques.
  • Auditing procedures are traditions of applying (auditing) techniques to exacting phases of a fastidious audit.
  • The procedures of audit adopted in several engagements outcome from the considered application of the obtainable techniques (of audit).
  • Audit procedure, in fact, is bothered with the wide-ranging assertions like: existence or incidence,rights and responsibility, completeness, assessment or allotment, and appearance and revelation that may be made relating to an account; whereas audit techniques are apprehensive with the examination of that evidence which has been traced as such by audit procedures.