What is the purpose of performing a walkthrough during an audit?

Performing a walkthrough during an audit serves the primary purpose of providing reasonable assurance that material items will be addressed effectively. A walkthrough involves tracing a transaction or process through the accounting or control systems, from initiation to completion, which allows auditors to observe firsthand whether procedures are being followed and controls are working as intended. By doing so, auditors can assess the reliability and integrity of the processes, verify compliance with established policies, and ensure that potential risks are being managed adequately.

In achieving this, the walkthrough provides insights that help auditors to identify areas of concern or material misstatements, ultimately fortifying their understanding of the audit subject. This detailed examination is essential for collecting evidence that supports the overall audit opinion and contributes to the reliability of the financial statements or operational processes being reviewed.