An
auditor applies various audit procedure to obtain audit evidence which enables
him to form an opinion whether the documentation of the management system meets
the applicable standard/specification or not.
Audit
Evidence is the information that the auditor uses in arriving at a conclusion
on the basis of which he forms his opinion.
The
auditor should obtain sufficient and appropriate evidence which enables the
auditor to arrive at a conclusion and supports his opinion. Audit evidence
forms the basis for forming an opinion whether the company is eligible for the
applied certification or not.
Evidence
collected by the auditor should support the contents of its audit report.
Sufficiency of audit evidence is the measure of the quantity of audit evidence.
Appropriateness of evidence is the quality of the evidence, i.e., its relevance
and reliability to support the auditor’s opinion.
Audit
evidence includes information provided by the management as well as
information from other sources.
Essentials of good audit evidence:
Sufficient:
Sufficiency is the measure of quantity. Audit evidence is sufficient when they
are available in adequate quantity. An auditor applies different audit
procedures to obtain sufficient audit evidence like test checking.
Reliable:
Evidence obtained by the auditor is persuasive rather than conclusive. We
cannot consider such evidence 100% reliable for forming an opinion. Reliability
of audit evidence depends on its source and nature of such evidence.
Source:
Audit evidence obtained within the enterprise is known as the internal source.
Evidence obtained from an outside enterprise like confirmation from the third
party is known as the external source. We consider the external source to be
more reliable.
Relevance: Whether
the audit evidence obtained by the auditor is relevant or not depends on the
purpose of audit procedures.
Conclusion:
Audit evidence is all the information used by the auditor in
arriving at the conclusions on which the audit opinion is based and includes
the information contained in the accounting records underlying the documentary
evidences and other information. Auditors are not expected to examine all
information that may exist. Audit evidence, which is cumulative in nature,
includes audit evidence obtained from audit procedures performed during the
course of the audit and may include audit evidence obtained from other sources,
such as previous audits and a firm's quality control procedures for client
acceptance and continuance.
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