Reperformance in auditing is when the auditor independently re-executes a procedure or control that the client’s own staff originally carried out, then compares the result. The Public Company Accounting Oversight Board defines it in AS 1105 as “the independent execution of procedures or controls that were originally performed by company personnel.” It produces strong evidence because the auditor is doing the work, not reading about it or asking whether it happened.
The Two Jobs Reperformance Does
Reperformance serves two different purposes, and the auditor’s goal determines what counts as a passing result.
The first is testing whether an internal control actually works. If a company requires a supervisor to approve every vendor payment by matching the purchase order, receiving report, and invoice before funds are released, the auditor re-executes that match on a sample of payments. The point is not the dollar amount. The point is confirming the control operated as designed throughout the period. Payments that went through without a proper match are a control failure even if the amounts were correct.
The second is substantive testing of a recorded number. The auditor takes the same inputs the client used, applies the same methodology, and sees whether the output matches. If the company recorded $42,000 of depreciation on a group of assets, the auditor pulls the asset register, applies the company’s depreciation policy, and checks whether the math produces $42,000. A mismatch points to either an error in the client’s work or a misapplied accounting policy.
How an Auditor Performs Reperformance
The mechanics follow the same pattern whether the target is a control or a calculation.
Select what to reperform. The choice flows from risk assessment. Areas with higher risk of material misstatement, or weaker controls, get more attention. A complex revenue recognition policy applied to thousands of transactions is a more likely target than a straightforward bank reconciliation.
Gather the exact inputs the client used. For a depreciation test, that means the fixed asset register with original cost, salvage value, useful life, and in-service dates. For a three-way match, it means the purchase order, receiving report, and vendor invoice for each sampled transaction. The whole exercise depends on running the same process against the same data.
Execute the procedure independently. In practice this often means building a spreadsheet or using audit software to apply the client’s documented policy to the gathered data. The auditor does not use the client’s system to re-run the calculation; they build their own version. For automated processes, computer-assisted audit techniques can test entire populations rather than samples, filtering large volumes of transactions for anomalies that manual testing would miss.
Compare and investigate. If the numbers match, the procedure or control passed. If they do not, the auditor investigates. A small difference might trace to a rounding convention. A large one could indicate a data entry error, a misapplied accounting policy, or a control that didn’t function. Material variances require the auditor to determine the root cause and decide whether an audit adjustment is needed.
Documentation runs alongside each step. The workpaper should show the inputs gathered, the methodology applied, the auditor’s independently computed result, the comparison to the client’s figure, and, where a variance existed, how it was resolved. AS 1215 requires auditors to “document a final conclusion for every audit procedure performed, if that conclusion is not readily apparent based on documented results of the procedures.” Matching numbers alone are not a conclusion.
How Reperformance Differs From Recalculation and Inspection
These three procedures overlap enough in casual conversation to cause confusion, but each one tests something fundamentally different.
Recalculation checks arithmetic and nothing else. AS 1105 defines it as “checking the mathematical accuracy of information.” If a client adds a column of invoice totals to $150,000, the auditor re-adds the column. That answers one narrow question: did you add correctly? It says nothing about whether the right invoices were included, whether the amounts on each one were valid, or whether the accounting policy was applied properly.
Inspection means examining records, documents, or physical assets. Looking at a signed approval form confirms someone signed it. Physically counting inventory confirms the items exist. Inspection provides evidence about existence, authenticity, or condition, not about whether a process worked end to end.
Reperformance covers the whole process. Take a company depreciating a fleet of delivery trucks. Recalculation checks whether the depreciation formula was computed correctly. Inspection might confirm the asset register lists the trucks. Reperformance means the auditor independently pulls the original cost, salvage value, useful life, and in-service date for each truck, applies the company’s depreciation policy, and compares the result to what the company recorded. It tests the logic, the inputs, and the output together.
The practical difference: recalculation catches math errors, inspection catches missing or fabricated documents, and reperformance catches flawed processes. An auditor who only recalculates might confirm that a wrong number was computed correctly. Reperformance catches the wrong number itself.
Why Reperformance Is Considered Strong Evidence
Not all audit procedures carry the same weight. PCAOB standards rank the common types of tests by the strength of evidence they ordinarily produce, from weakest to strongest: inquiry, observation, inspection of relevant documentation, and reperformance of a control. Reperformance sits at the top because the auditor is doing the work rather than relying on what someone said happened or what a document appears to show.
AS 2301 specifies that testing the operating effectiveness of controls involves “a mix of inquiry of appropriate personnel, observation of the company’s operations, inspection of relevant documentation, and re-performance of the control.” For controls tied to significant risks, auditors lean more heavily on the procedures that produce stronger evidence, and reperformance is the strongest single-procedure option. The same logic runs through AS 2201 for internal control audits: walkthroughs that combine inquiry, observation, and reperformance “might provide sufficient evidence of operating effectiveness, depending on the risk associated with the control being tested,” but higher-risk controls push the auditor toward more reperformance and less reliance on the weaker procedures.
Where Reperformance Shows Up in Practice
Inventory Valuation
When a company uses FIFO, weighted average, or another cost flow assumption, the auditor selects a sample of inventory items and independently applies the same method to the same purchase and production data. The goal is to confirm the company correctly tracked which costs attach to which units. Inventory valuation is a frequent target because the calculations get complex and the balances are often material.
Accruals and Estimates
Warranty reserves, allowance for doubtful accounts, and similar estimates layer judgment on top of calculation. For a warranty reserve, the company typically applies historical claim rates to current-period sales to project future liability. The auditor re-executes that calculation using the company’s own historical data and methodology, then checks whether the recorded reserve matches. Because estimates involve judgment, reperformance here also tests whether the methodology itself is reasonable and consistently applied.
Payroll
Payroll involves statutory rates that create a clear right answer for each employee. Auditors reperform tax withholding and employer contribution calculations for a sample of workers, verifying that the payroll system applied current federal and state rates correctly. Errors in payroll compound quickly across hundreds or thousands of employees, so this is an efficient area for reperformance to surface systemic problems.
Lease Liabilities Under ASC 842
Lease calculations have become a common reperformance target since ASC 842 required companies to recognize most leases on the balance sheet. The auditor needs the full payment schedule, the lease term including any renewal options the company determined it would reasonably exercise, and the discount rate. The auditor independently computes the present value of remaining lease payments and compares it to the recorded liability. With dozens or hundreds of leases in a typical portfolio, small methodology errors can produce material misstatements in the aggregate.
The Three-Way Match
For the expenditure cycle, reperforming the three-way match is one of the most straightforward applications. The auditor independently matches the purchase order, receiving report, and vendor invoice for a sample of payments. This tests both the control (did someone actually verify these documents agreed before authorizing payment?) and the recorded amount (does the payment match what was ordered and received?). It produces strong evidence about the accuracy and completeness of accounts payable.
What Reperformance Does Not Catch
Reperformance produces strong evidence, but it has blind spots.
The first is sampling. Reperformance typically covers a sample, not every transaction. A control might pass on every sampled item and fail on others. AS 2315 notes that this risk “varies inversely with sample size: the smaller the sample size, the greater the sampling risk.” Statistically designed samples manage this risk but never eliminate it unless the auditor tests the whole population.
The second is that reperformance uses the client’s own inputs. If management has manipulated those inputs, the auditor will re-execute the calculation and arrive at the same wrong answer. AS 2401 puts the point directly: “Management has a unique ability to perpetrate fraud because it frequently is in a position to directly or indirectly manipulate accounting records.” A company that inflates its asset register will show inflated depreciation whether the auditor or the client runs the numbers. Reperformance confirms process accuracy, not input integrity, which is why auditors pair it with fraud-focused procedures like examining journal entries, reviewing estimates for bias, and evaluating unusual transactions.