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Glossary/Audit procedures

Inquiry

Inquiry is an audit procedure that seeks information from knowledgeable people inside or outside the entity, in formal written or informal oral form, and is rarely enough evidence on its own.

CORAA TeamUpdated November 5, 2026

Definition

Inquiry ranges from a written questionnaire to a casual question at a walkthrough. Answers can give the auditor new information, explain unusual items, or corroborate other evidence. Under AU-C 500, inquiry is a recognized procedure, but responses are only as reliable as the person giving them and the incentives behind them.

Why it matters in an audit or review

Inquiry alone is not enough to test the operating effectiveness of controls, and answers on significant matters need corroboration from other evidence. Inquiry remains the main procedure in review engagements and a core part of risk assessment and fraud inquiry.

Example

The auditor asks the sales manager whether any customers have been allowed to return goods after year end (illustrative). The answer is "just routine returns." The auditor then reads the January credit memo register and finds $62,000 of returns from three customers on December shipments. The inquiry pointed to the area; the register provided the evidence.

Common mistakes

  • Recording the answer as a conclusion with no follow-up.
  • Asking only the people who prepared the numbers.
  • Inconsistent answers from different people not being resolved.

FAQ

Does a written representation replace inquiry?

No. Written representations confirm management's responses. They do not replace other evidence.

Sources

  • AICPA, AU-C Section 500, Audit Evidence
  • AICPA, AU-C Section 330 (inquiry alone does not provide sufficient evidence of operating effectiveness of controls)
  • AICPA, AU-C Section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (as revised by SAS No. 145)
  • AICPA, AU-C Section 240 (fraud inquiries of management and others)
  • AICPA, AR-C Section 90, Review of Financial Statements

Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error

Standards

AU-C 500AU-C 330

Related terms

  • Inspection
    Inspection is an audit procedure that examines records or documents, internal or external, in paper, electronic or other form, or physically examines an asset such as inventory or equipment.
  • Observation
    Observation is an audit procedure that consists of looking at a process or procedure being performed by others, such as a physical inventory count or the handling of cash receipts.
  • Tests of controls
    Tests of controls are audit procedures that evaluate whether a control operated effectively throughout the period, and they are required when the auditor plans to rely on controls or substantive tests alone cannot suffice.
  • Walkthrough
    A walkthrough follows a single transaction from initiation through processing to recording in the financial statements, to confirm the auditor's understanding of a process and whether its controls are in place.

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