Auditing standard number 500: audit evidence

Auditing standard number 500: audit evidence
Auditing Standard No. 500 that we or this standard would like to introduce you to.

Sufficient and appropriate audit evidence:
Audit evidence is the information used by the independent auditor to reach the conclusions that form the basis of his opinion.

Auditing includes information in accounting records, the basis for preparing financial statements and other information.

Sufficiency (audit evidence) is a measure of the quantity of audit evidence.

The quantity of required audit evidence is influenced by the independent auditor’s assessment of the risks of material misstatement as well as the quality of that evidence.

Suitability (audit evidence) is the quality criterion of audit evidence, which means the relevance and reliability of audit evidence in supporting the conclusions that are the basis of the independent auditor’s opinion (paragraph 5).

The independent auditor must design and implement the audit methods in such a way that they are appropriate in the existing conditions, with the aim of obtaining sufficient and appropriate audit evidence (paragraph 6).

Acquiring audit evidence and evaluating it constitutes the major part of the independent auditor’s work to provide an opinion.

Auditing methods for obtaining evidence can include, in addition to inquiry, verification, observation, confirmation, recalculation, re-execution, or analytical methods, which are often a combination of these methods.

Although the inquiry may provide significant audit evidence and even provide evidence of the existence of a misstatement, it usually alone does not provide sufficient audit evidence of the absence of material misstatement at the level of assertions or the effectiveness of the controls. 2).

Sufficiency and appropriateness of audit evidence are interrelated.

Sufficiency is a measure of the quantity of audit evidence.

The amount of audit evidence required is influenced by the auditor’s assessment of the risks of material misstatement (the higher the assessed risks, the more likely more audit evidence is required) and the quality of this evidence (the higher the quality, the less evidence may be required). is needed) is placed.

However, obtaining more audit evidence may not compensate for the low quality of the evidence (paragraph 4).

Appropriateness is the criterion of the quality of audit evidence, which means the relevance and reliability of the supporting evidence for the conclusions that are based on the auditor’s opinion.

Reliability of evidence is influenced by the nature and source of obtaining evidence and also depends on the specific conditions of obtaining evidence (Clause 5).