What is sufficiency and appropriateness of audit evidence?
Sufficiency is the measure of the quantity of audit evidence. Appropriateness is the measure of the quality of audit evidence; that is, its relevance and its reliability in providing support for the conclusions on which the auditor’s opinion is based.
What is the meaning of sufficient and appropriate evidence?
Sufficient audit evidence here mainly refers to the number of audit evidence. And the appropriate here refers to the quality of evidence. Sufficient here can refer to the number of sampling they select, the procedures they use, as well as documents that they obtain.
What are the five factors that determine the sufficiency of an audit evidence?
However, when determining whether they have enough evidence on file the auditor must consider:
- the risk of material misstatement;
- the materiality of the item;
- the nature of accounting and internal control systems;
- the auditor’s knowledge and experience of the business;
- the results of controls tests;
What is the meaning of audit evidence?
Auditing evidence is the information collected by an auditor to ascertain the accuracy and compliance of a company’s financial statements. Examples of auditing evidence include bank accounts, management accounts, payrolls, bank statements, invoices, and receipts.
What are the characteristics of audit evidence?
Characteristics of Evidence in an Audit
- Nature refers to the type of information received.
- Relevance refers to the pertinence of the information to provide an opinion.
- Reliability refers to determining whether the material can be trusted or relied upon to form an opinion.
What is meant by appropriate 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 in books of accounts as well as information from other sources.
What is the importance of audit evidence?
Audit evidence is important because it is all the information that an auditor gathers to reach his audit opinion about an organization’s financial statements and/or internal control environment.
What are the 7 types of audit evidence?
Terms in this set (8)
- Physical examination. Is the inspection or count by the auditor of a tangible asset.
- Confirmation.
- Documentation.
- Analytical procedures.
- Inquiries of the Client.
- Recalculation.
- Reperformance.
- Observation.
What are the characteristics of reliable audit evidence?
Audit evidence is information needed by the auditor in order to reach the conclusion on whether financial statements show a true and fair view. The qualities of good audit evidence are determined in relation to its relevance, reliability, and Sufficiency.
What is hierarchy of audit evidence?
Terms in this set (16) Auditor’s direct personal knowledge (observation, physical examination or recalculation External Evidence Internal Evidence Oral evidence/inquiry
What is appropriate audit evidence?
Appropriateness is the measure of the quality of audit evidence. The quality of audit evidence depends on whether it is relevant and reliable in providing support to the conclusions on which the auditor’s opinion is based. Whether evidence is reliable also depends on its source; for instance,…
What is quality audit evidence?
Quality of Audit Evidence: The quality of audit evidence is very important to make sure that the conclusion that makes by the auditor is correct. If the information is not strong or low quality, the audit risks of making incorrect audit opinion are high. The Quality of audit evidence is dependent mainly on the form and source of the evidences.
What does audit evidence consist of?
Audit evidence consists of both information that supports and corroborates management’s assertions regarding the financial statements or internal control over financial reporting and information that contradicts such assertions.”. Nov 18 2019