In the audit process, gathering reliable evidence is crucial to forming an accurate conclusion. Auditors apply various methods—inquiry, observation, inspection/examination, recalculation, reperformance, validation/confirmation, and analysis—to collect and assess evidence. Audit sampling is often used alongside these methods to test a representative portion of the data, enabling auditors to form conclusions about the entire population without examining every item.

For example, in an internal audit of the payroll process, the auditor begins with inquiry, asking HR and finance personnel about payroll procedures and controls. This is followed by observation, where the auditor watches the payroll run process to understand how data is processed and verified. To test the accuracy of employee payments, the auditor selects a sample of 30 employee records for inspection, examining salary slips, timesheets, and approval documents.

Next, the auditor performs recalculation on the sampled records, verifying gross pay, deductions, and net pay manually. To test system accuracy, reperformance is conducted by running a parallel payroll for a small group and comparing it with actual outputs. For validation/confirmation, the auditor may send confirmation letters to a sample of employees to confirm amounts received and reported. Lastly, analytical procedures are applied, such as comparing payroll trends over several months to detect unusual spikes.

This multi-method approach, supported by audit sampling, ensures that the evidence gathered is varied, sufficient, and reliable. It enhances audit quality by combining quantitative data with qualitative insights, ultimately helping auditors reach well-supported conclusions