SA 500: Audit Evidence#
Definition#
Audit evidence is information used by the auditor to draw conclusions on which to base the auditor's opinion.
Sufficient and Appropriate#
- Sufficient: Adequate in quantity
- Appropriate: Relevant and reliable
Types of Audit Evidence#
1. Documentary Evidence
- Invoices
- Contracts
- Bank statements
- Correspondence
2. Computations
- Calculations made by client
- Auditor's recomputation
3. Observation
- Observation of processes
- Physical inspection
4. Representations
- Written representation from management
- Oral statements
5. Analytical Procedures
- Ratio analysis
- Trend analysis
Factors Affecting Evidence#
- Nature of assertion
- Risk of material misstatement
- Quality of evidence
- Relevance and reliability
Audit Procedures for Evidence#
- Inspection
- Observation
- Inquiry
- Confirmation
- Recalculation
- Reperformance
- Analytical procedures