Procedures in Collecting Forensic Evidence (Essay Sample)

Apollo Shoes Casebook Road Map: Procedures in Collecting Forensic Evidence Name
Course
Instructor
Date
Procedures to collect accounting evidence
Inspection
Inspection is one of the most widely used methods to collect evidence where comparing supporting documents with information presented makes it easier to identify whether there are any anomalies (Skalak et al., 2011). Equally, the physical examination of assets facilitates search into whether Apollo Shoes, Inc really owns all the assets recorded.
Inquiry and observation
Through seeking information regarding the entity from knowledgeable persons inside and outside the company, information gathered will help to assess whether financial information presented reflects a true and fair view at the same time, corroborating internal evidence with third parties is necessary including debtors circularization.
Computations
It is necessary to verify the figures presented in financial statements as this helps to show whether there is arithmetical accuracy. Hence, independent recalculation of account balances establishes how the accountant arrived at figures.
Analytical review procedures
In order to assess the extent of deviation on reported financial formation in comparison to past trend, analytical procedures are relied upon (Skalak et al., 2011). The use of trend performance and accounting rations enable one to identify fluctuations in financial performance and unusual financial reports.
Sampling tools and techniques
Audit sampling reflect the auditing procedures carried out in some of the items in a class of transactions, account balances in order to assess characteristics of the balances or class (Nigrini, 2011). Hence, designing efficient samples is critical to assessing sufficiency of audit evidence and objectivity of sample results. Since the audit sample should be representative of the population, an auditor needs to take into account the population characteristics. At the same time materiality and risk of misstatements influences the choice of sampling tools and techniques relied upon to evaluate sample results. As such, items that cannot be audited ought to be treated as misstatements when evaluating sample results.
Use of statistical tools of examination
This tool allows the auditor to assess the relevance of evidence as well as efficiency since it reviews on quantitative techniques to evaluate the sample outcomes.
Computer assisted- audit tools and techniques
Auditing applications require understanding how to use both hardware and software, and familiarity with systems makes it easier to use substantive tests. The tools are useful; in analysing accuracy of calculations, database application and at times produce logical flowcharts (Moeller, 2010).
Cash flow
The cash flow method is useful when verifying the reported income and assets since, Apollo Shoes Inc may have unreported sources of income as well as concealed assets. In particular, analysis of bank reports is necessary to trace transactions and there origins
Ratio method
The ratio method is equally important as it allows the auditor to compare expected and predated results through computation of analysis ratios. Hence, the technique utilises the proportion of minimum and maximum values to determine proportions that are reasonable, and is potentially useful to detect frauds.
Relative size factor
This technique focuses on assessing the extent of anomalies when there are subsets through comparing the relative size factor for two subsets. This tool is useful in detecting errors, where the largest amounts contained in a subset are assessed to find out whether the amounts belong to another subset or has been incorrectly recorded (Nigrini, 2011). In conducting the relative size factor the ratio of the largest record versus the second largest in a subset is computed.
Probability sampling
There is a need for probability sampling in auditing Apollo Shoes, Inc allowing the auditor to determine the likelihood that the evidence is essential to reach a conclusion about the validity of financial information and statements.
Benford’s law
This data mining technique helps to detect unusual duplication of amounts and oddities in data in fraud detection the technique has been adopted to show the extent to which frequency of occurrences of amounts appears in financial information (Nigrini, 2011).
Analytical and inferential tools
Analytical and inferential tools are necessary to show flow of data as well and connection of the organizations and other entities. The visual formats of displaying financial information help in breaking down complex situations. Analytical and inferential tools are essential...