ISA 500 identifies seven types of audit procedure that the auditor uses to obtain audit evidence:

#	Procedure	Description	Example
1	Inspection	Examining records, documents, or tangible assets. Provides evidence of existence and, depending on what is inspected, of rights and obligations, valuation, and completeness.	Inspecting a title deed for ownership of land; inspecting a sales invoice for details of a transaction; physically inspecting inventory for condition/damage.
2	Observation	Watching a process or procedure being performed by others. Provides evidence of how a process is performed at a point in time — but not that it is always performed that way.	Observing the entity's inventory count procedures; observing segregation of duties in the cash receipts process.
3	Inquiry	Seeking information from knowledgeable persons, both financial and non-financial, inside or outside the entity. Can be formal (written) or informal (oral).	Asking management about accounting policies; inquiring of legal counsel about pending litigation; asking warehouse staff about inventory procedures.
4	Confirmation	Obtaining a direct written response from a third party (the confirming party) verifying information. A specific type of inquiry. Provides strong external evidence.	Bank confirmation letter (confirming bank balance, loans, securities held); trade receivable circularisation (asking customers to confirm balances owed); confirmation from a solicitor regarding litigation.
5	Recalculation	Checking the mathematical accuracy of documents or records. Can be performed manually or electronically (e.g., using CAATs).	Recalculating depreciation charges; checking the casting (addition) of a trial balance; verifying the extensions on a sales invoice (quantity × unit price).
6	Reperformance	The auditor's independent execution of procedures or controls that were originally performed by the entity's personnel.	Re-performing a bank reconciliation prepared by the client; re-performing the ageing of trade receivables; re-performing a three-way match (purchase order, GRN, invoice) in the purchases cycle.
7	Analytical procedures	Evaluating financial information by studying plausible relationships among both financial and non-financial data. Involves identifying and investigating significant fluctuations, unusual items, and unexpected relationships.	Comparing current year revenue to prior year and to budget; calculating gross profit margin and comparing to prior year (investigating significant changes); computing the payroll cost as a function of headcount and average salary; comparing monthly revenue patterns for seasonality.

When are analytical procedures used?

Risk assessment stage (ISA 315): Mandatory — to help identify risks of material misstatement. Preliminary analytical procedures compare current year data to prior year, budget, industry benchmarks, and expected relationships.
Substantive testing (ISA 520): Optional — substantive analytical procedures can be used as a substantive procedure to obtain evidence about an assertion (e.g., proving the reasonableness of depreciation by independently calculating it).
Overall review (ISA 520): Mandatory at the completion stage — the auditor must perform analytical procedures near the end of the audit to form an overall conclusion as to whether the financial statements are consistent with the auditor's understanding of the entity.

Assurance