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audit-evidence

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10 views

audit-evidence

Summary

Uploaded by

karryl barnuevo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Audit Evidence refers to the information collected and evaluated by an auditor to form the basis of their

opinion on the financial statements of an entity. It includes records, documents, and other information
that support the assertions made by management in the financial statements.

Audit evidence can come in various forms, such as:

 Physical evidence (e.g., invoices, receipts)

 Documentary evidence (e.g., contracts, bank statements)

 Testimonies or statements from management or employees

 Observations made by the auditor

 Recalculation or analysis performed by the auditor

Qualities of Audit Evidence:

The evidence gathered during an audit must meet certain qualities to be deemed reliable. These include:

1. Sufficiency:

o The quantity of evidence collected must be enough to provide a reasonable basis for the
auditor's opinion. More complex or higher-risk areas may require more evidence.

2. Appropriateness:

o This refers to the relevance and reliability of the evidence. Evidence must be directly
related to the audit objective, and it should be credible.

3. Relevance:

o The evidence should directly support the assertions made in the financial statements.
Irrelevant evidence can distort the audit findings.

4. Reliability:

o Evidence from independent sources outside the organization is generally more reliable
than evidence obtained from within the organization. Also, evidence obtained through
direct observation or re-performance of procedures tends to be more reliable than third-
party documents.

5. Timeliness:

o Evidence should be obtained close to the date of the financial statements being audited.
Outdated evidence may not reflect the true financial condition of the entity.

6. Verifiability:

o Evidence must be capable of being corroborated through another source or by the


auditor themselves.

These qualities help ensure that the audit evidence is sufficient and appropriate for forming a well-
supported audit opinion.

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