When do I choose vouching, tracing, observation, confirmation, or reperformance in an audit?

Question

AcadiFi · Accepted Answer

The best procedure depends on the assertion or risk you are trying to test. Vouching usually moves from recorded data back to supporting evidence and is strong for occurrence. Tracing moves from source documents forward into the records and is strong for completeness. Observation lets you see a process happen, confirmation gathers evidence from an outside party, and reperformance independently redoes a control or calculation.

Suppose Brookfield Services audits travel reimbursements totaling $620,000. If the concern is that fake reimbursements were recorded, vouch expense entries back to receipts and approvals. If the concern is that not all company credit-card charges were recorded, trace statements into the ledger. If you need to understand whether the approver really reviews reports before payment, observe the process. If cash balances are in doubt, confirm them with the bank. If a spreadsheet control recalculates mileage reimbursements, reperformance is often strongest.

```mermaid
flowchart TD
  A[Audit objective] --> B[Occurrence?]
  B -->|Yes| C[Vouch]
  A --> D[Completeness?]
  D -->|Yes| E[Trace]
  A --> F[Process in action?]
  F -->|Yes| G[Observe]
  A --> H[Third-party evidence?]
  H -->|Yes| I[Confirm]
  A --> J[Can you redo it?]
  J -->|Yes| K[Reperform]
```

On the exam, start with the risk, not the procedure list. Once you know what you are proving, the most fitting procedure becomes much easier to spot. Practice more in our CIA question bank.

When do I choose vouching, tracing, observation, confirmation, or reperformance in an audit?

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