Module: Audit and Assurance
Lecture 6 – Audit Evidence/Quality Control/Audit Documentation
Audit Evidence ISA 500
Auditors should obtain sufficient appropriate audit evidence to be able to draw
reasonable conclusions on which to base the audit opinion.
If there isn’t enough evidence, then it’s enough for us to fail the audit.
Evidence has to be sufficient and appropriate for you to draw a conclusion.
Audit Evidence
Sufficiency relates to the quantity of audit evidence
How many ways can you confirm a particular transaction or account balance
in the financial statement?
Just doing a physical inspection may not be ok. You may need to look at the
logbook and invoices.
Appropriateness relates to the quality or reliability of audit evidence
How reliable and relevant is the evidence you are looking at?
For your evidence to be credible, it needs to be appropriate and sufficient.
Appropriate is split into two further areas:
(1) Is the appropriate evidence relevant?
(2) Appropriate evidence has to be reliable – it has to be trustworthy and
persuasive. Is it strong or weak? That will depend where you got it from.
Evidence is a crucial ingredient to audit. If there’s no evidence, then you can’t give
an opinion.
Audit Evidence – Auditors’ Judgement
What is the nature of the risk that has been identified?
How bad is that risk?
In order to cover yourself, you’ve got to ensure you satisfy what you need to
do and what needs to be done to draw a reasonable conclusion.
Nature of accounting/internal control systems if the system is recent and up
to date and work really well and has integrated into the systems within the
organisation, then you as an auditor will feel comfortable and satisfied that
this client has really strong controls in place. This in turn will determine the
amount of evidence you require.
Lecture 6 – Audit Evidence/Quality Control/Audit Documentation
Audit Evidence ISA 500
Auditors should obtain sufficient appropriate audit evidence to be able to draw
reasonable conclusions on which to base the audit opinion.
If there isn’t enough evidence, then it’s enough for us to fail the audit.
Evidence has to be sufficient and appropriate for you to draw a conclusion.
Audit Evidence
Sufficiency relates to the quantity of audit evidence
How many ways can you confirm a particular transaction or account balance
in the financial statement?
Just doing a physical inspection may not be ok. You may need to look at the
logbook and invoices.
Appropriateness relates to the quality or reliability of audit evidence
How reliable and relevant is the evidence you are looking at?
For your evidence to be credible, it needs to be appropriate and sufficient.
Appropriate is split into two further areas:
(1) Is the appropriate evidence relevant?
(2) Appropriate evidence has to be reliable – it has to be trustworthy and
persuasive. Is it strong or weak? That will depend where you got it from.
Evidence is a crucial ingredient to audit. If there’s no evidence, then you can’t give
an opinion.
Audit Evidence – Auditors’ Judgement
What is the nature of the risk that has been identified?
How bad is that risk?
In order to cover yourself, you’ve got to ensure you satisfy what you need to
do and what needs to be done to draw a reasonable conclusion.
Nature of accounting/internal control systems if the system is recent and up
to date and work really well and has integrated into the systems within the
organisation, then you as an auditor will feel comfortable and satisfied that
this client has really strong controls in place. This in turn will determine the
amount of evidence you require.
