## Audit Procedures
Audit procedures are specific acts performed by the auditor to gather audit evidence. There are seven core procedures — memorise them as I² O E R² A.
| # | Procedure | What the auditor does |
|---|---|---|
| 1 | Inspection | Examines records/documents (paper, electronic) or physically examines an asset |
| 2 | Inquiry | Seeks information from knowledgeable persons — inside or outside the entity |
| 3 | Observation | Looks at a process or procedure being performed by others |
| 4 | External Confirmation | Obtains a direct written response from a third party (confirming party) |
| 5 | Reperformance | Independently re-executes procedures or controls originally done by the entity |
| 6 | Recalculation | Checks mathematical accuracy of documents/records — manually or electronically |
| 7 | Analytical Procedures | Evaluates financial information by studying plausible relationships among financial and non-financial data |
### Key distinctions to remember
- Inquiry alone is insufficient — it must be corroborated by other procedures because a response can be biased.
- Observation is limited to the point in time at which it is applied; the process may change when the auditor is not present.
- Reperformance ≠ Recalculation: Reperformance re-executes controls/procedures; Recalculation checks arithmetic.
- External Confirmation provides high-quality evidence because it comes directly from a third party, bypassing the client.