The Milli Majlis [Parliament] of the Republic of Azerbaijan shall determine its regulations of work and establish its appropriate bodies, as well as elect its Chairperson and Deputy Chairpersons, organize standing and other committees, establish the Chamber of Accounts.

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I. General provisions


1.1 These standards were prepared in compliance with the Law of the Republic of Azerbaijan “On the Chamber of Accounts”, the By-Laws of the Chamber of Accounts, the principles recommended by INTOSAI (International Organization of Supreme Audit Institutions) and Audit evidence standards.
1.2 The objective of these standards is to determine the nature, source, types and collection procedures of audit evidence.
1.3 Audit evidence is data obtained in the course of activities of financial and budgetary control by the Chamber of Accounts of the Republic of Azerbaijan.

II. Source and types of audit evidence

2.1 Audit evidence can be obtained from internal (prepared by an auditee) or external (received from third parties) sources. The audit evidence obtained from external sources and directly from an audit team is more reliable than that prepared by an auditee.
2.2 By its nature audit evidence can be in written, oral and factual forms. Written (documented) evidence holds superiority over oral ones. Oral evidence shall be more thoroughly described in the working papers of an audit team (look at the standard HP-AS № ………).

III. Procedures for collecting audit evidence

3.1. It is important for the members of an audit team to understand such tools and procedures as inspection, observation and certification from the point of view of collection of audit evidence. They shall be sure that significant deviations, errors and cases of violation of regulatory acts are evaluated and properly removed.
3.2. Audit evidence can be collected via the following audit procedures:

• Actual control (inspection)
• Certification
• Documentation
• Observation
• Inquiry from an auditee or a third party
• Analytic procedures
• Control calculations

3.3 An audit team can use independent procedures for collecting additional audit evidence in addition to the procedures described in Clause 3.2. Independent procedures are the procedures of control designed to collect audit evidence about the scope, structure and proper use of allocations.

3.4 The members of an audit team shall make sure that audit evidence corresponds to predefined quality criteria. The quality of evidence shall be determined through its proximity to actual developments, identification of difference between evidence and actual financial or economic transactions, correspondence of applied procedures to financial or economic transactions and reliability of sources of evidence collection.

IV Application of procedures for collecting audit evidence


4.1. Violation of the requirements of the existing legislative acts and regulatory documents and cases of deviation from approved indicators or ungrounded reassignment of revenues and expenses of the State Budget and extra budgetary state funds (institutions) shall be established via audit evidence.
4.2. Audit evidence, including the bases and scope of application of an audit work plan, work done and audit data, shall be properly documented in working papers by the head or members of an audit team.
4.3. Data obtained following collection of audit evidence shall be reflected in working papers of an audit team and documented in the following way:

• explanations from officials;
• acts of reconciliation with purchasing and client organizations;
• schedules of comparison;
• interim acts and certificates;
• schedules reflecting the results of inventory taking;
• copies of relevant documents;
• queries and replies to them;
• reconciliation with debtors and creditors ;
• expert opinions.

4.4. The relevant documentation is important to resolve some issues and is used for the following:

• approving and defending reports and opinions of auditors;
• increasing the efficiency and effectiveness of the audit;
• drafting reports and using them as a source of information for queries from an auditee or any other party;
• improving planning and control mechanisms;
• helping increase professional level of employees conducting control activities;
• helping do the work in a satisfactory manner;
• providing working evidence for future research.

4.5. An audit group shall bear in mind that the content and procedures of working papers reflect competency, experience and awareness of the audit team. These papers shall be substantiated enough to make sure that an experienced auditor who has no previous connection with conducted audit (control activity) can declare after becoming familiar with those papers that the results are in harmony with the audit.