BY PRESLEY S. FORD, JR. Partner, Tulsa Office
Presented before the Tulsa Chapter of The Institute of Internal Auditors—January 1958
THIS evening we continue our survey entitled "Operation Internal Auditing" with a discussion of the auditing techniques that the auditor employs in his work. Let's define our terms.
The word "audit" comes to us from the Latin, from the word "auditus," meaning "hear." The words "audio," "auditory," and "auditorium" are derived from the same source. In the dim dawn of history authorities heard accounts rendered by stewards by word of mouth. Hence the association of auditing and hearing. The connection
is not as remote as one might think. The auditor is not a finder of fact. His function is to express professional opinions with respect to accounting data. His work is to review, to "hear," if you like, the evidence supporting accounting data and to formulate a professional opinion concerning the data he has examined.
The word "technique" comes to us from the Greek, from the word "technikos," meaning "art." Traditionally the word "technique" has had reference to manner of artistic performance, as when we refer to a musician's or a painter's technique. In our time the word "technique" has taken on the broader meaning of working methods in art, science, industry, and other fields.
Consequently, when we speak of "auditing techniques" we have reference to the auditor's art, to the working methods by which he examines accounting evidence and formulates an opinion with respect thereto. Consider the implications of the proposition that auditing is an "art." Auditing is not mechanical, routine checking. Auditing is not a set of rules to be memorized and followed. Auditing is not a standard work program to be universally applied. Auditing is the mind of man bringing ingenuity, education, training, and experience to bear on the critical review of accounting data. Auditing techniques
are the tools of this art, a set of skills the auditor has mastered; to each audit he brings that combination of techniques he believes will most efficiently lead him thought by thought to the formulation of a sound professional opinion.
According to my personal view, there are ten types of auditing techniques. Three of these techniques are commonly used in the