Audit Evidence

3580 Words Mar 15th, 2011 15 Pages
Audit Evidence

This chapter deals with the types of evidence decisions auditors make, the evidence available to auditors, and the use of that evidence in performing audits.

NATURE OF EVIDENCE • Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. • Evidence includes information that is highly persuasive, such as the auditor's count of marketable securities, and less persuasive information, such as responses to questions of client employees. • The use of evidence is not unique to auditors. Evidence is also used extensively by scientists, lawyers, and historians. • The auditor also gathers evidence to draw conclusions.
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• Example on page 420 in Table 13-4. The right side of the audit program also includes the balance-related audit objectives for each procedure, as studied in Chapter 6.


• The third standard of field work requires the auditor to accumulate sufficient appropriate evidence to support the opinion issued. • Because of the cost of collecting evidence, auditor will not be completely convinced that the opinion is correct. However, the auditor must be persuaded that the opinion is correct with a high level of assurance. • The two determinants of the persuasiveness of evidence are appropriateness and sufficiency, which are taken directly from the third standard of field work. o Appropriateness of evidence is measured by its relevance and reliability in meeting audit objectives for classes of transactions, account balances, and related disclosures. ▪ Relevance Evidence must pertain to or be relevant to the audit objective that the auditor is testing before it can be reliable. For example, assume that the auditor is concerned that a client is failing to bill customers for shipments (completeness objective). A relevant procedure would be to trace a sample of shipping documents to related duplicate sales invoices to determine whether each had been billed, not to trace duplicate sales invoices to shipping documents. ▪ Evidence may