Audit Evidence
Purpose
To establish standards and provide guidance on the quality and quantity of audit evidence to be obtained when auditing financial statements and the procedures for obtaining that audit evidence.
Audit Evidence (AE)
"Audit evidence" means the information obtained by the auditor which includes source documents and accounting records underlying the financial statements and corroborating1 information from other sources.
The auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. Sufficiency is the measure of the quantity of audit evidence; appropriateness is the measure of the quality of audit evidence and its relevance to a particular assertion and its reliability.
The auditor's judgement as to what is sufficient appropriate audit evidence is influenced by following factors:-
Nature and level of inherent risk at both the financial statement and the account balances level,
Nature of the accounting and internal control systems and the assessment of control risks,
Materiality of the item being examined,
Experience gained during previous audits,
Results of audit procedures, including fraud or error and
Source and reliability of information available.
If the auditor is unable to obtain sufficient appropriate audit evidence, he should express a qualified opinion or a disclaimer of opinion.
The auditor should consider the sufficiency and appropriateness of audit evidence to support financial statement assertions2. Financial statement assertions are assertions by management, they can be categorized as follows:
(a) Existence: An asset or a liability exists at a given date;
(b) Rights and Obligations: An asset or a liability pertains to the entity at a given date;
(c) Occurrence: A transaction or event took place which pertains to the entity during the period;
(d) Completeness: There are no unrecorded/undisclosed assets,
To establish standards and provide guidance on the quality and quantity of audit evidence to be obtained when auditing financial statements and the procedures for obtaining that audit evidence.
Audit Evidence (AE)
"Audit evidence" means the information obtained by the auditor which includes source documents and accounting records underlying the financial statements and corroborating1 information from other sources.
The auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. Sufficiency is the measure of the quantity of audit evidence; appropriateness is the measure of the quality of audit evidence and its relevance to a particular assertion and its reliability.
The auditor's judgement as to what is sufficient appropriate audit evidence is influenced by following factors:-
Nature and level of inherent risk at both the financial statement and the account balances level,
Nature of the accounting and internal control systems and the assessment of control risks,
Materiality of the item being examined,
Experience gained during previous audits,
Results of audit procedures, including fraud or error and
Source and reliability of information available.
If the auditor is unable to obtain sufficient appropriate audit evidence, he should express a qualified opinion or a disclaimer of opinion.
The auditor should consider the sufficiency and appropriateness of audit evidence to support financial statement assertions2. Financial statement assertions are assertions by management, they can be categorized as follows:
(a) Existence: An asset or a liability exists at a given date;
(b) Rights and Obligations: An asset or a liability pertains to the entity at a given date;
(c) Occurrence: A transaction or event took place which pertains to the entity during the period;
(d) Completeness: There are no unrecorded/undisclosed assets,