Distinguish between principles of auditing and techniques of auditing.

Auditing and Assurance Revision Questions and Answers

Answer
Auditing principles are the basic principles, which underlie every audit. An auditor has to ensure compliance with these principles in carrying out any audit. To comply with these principles, he has to

design his audit procedures and reporting practices in an auditing situation. These principles provide the benchmark against which an auditor’s performance is evaluated. These principles are:
 Integrity, objectivity and independence
 Confidentiality
 Skills and competence
 Work performed others
 Documentation
 Planning
 Audit evidence
 Accounting system and internal control
 Audit conclusion and reporting

Whereas, the techniques which an auditor collects evidence are known as techniques of auditing. These techniques are:
 Inspection of documents and records
 Physical inspection of tangible assets
 Observation
 Inquiry
 Confirmation
 Computation and re-tracing book-keeping procedures
 Analytical procedures

Thus, auditing principles are of fundamental nature which underlie the conduct of the audit. These principles are not liable to change frequently while audit techniques may vary according to the nature of propositions to be tested. For instance, audit technique to test the existence of cash in hand will be different from the method to verify recover ability of sundry debtors. Further audit techniques may vary from organization to organization depending upon the nature of business but the principles of auditing will remain the same irrespective of the nature of the organization.



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