Audit evidence
Encyclopedia
Audit evidence is evidence
obtained during a financial audit
and recorded in the audit working papers
.
Evidence
Evidence in its broadest sense includes everything that is used to determine or demonstrate the truth of an assertion. Giving or procuring evidence is the process of using those things that are either presumed to be true, or were themselves proven via evidence, to demonstrate an assertion's truth...
obtained during a financial audit
Financial audit
A financial audit, or more accurately, an audit of financial statements, is the verification of the financial statements of a legal entity, with a view to express an audit opinion...
and recorded in the audit working papers
Audit working papers
Audit working papers are the documents which record all audit evidence obtained during financial statements auditing, internal management auditing, information systems auditing, and investigations. Audit working papers are used to support the audit work done in order to provide assurance that the...
.
- In the audit engagement acceptance or reappointment stage, audit evidence is the information that the auditor is to consider for the appointment. For examples, change in the entity control environmentControl environmentControl environment also called "Internal control environment". It is a term of financial audit, internal audit and Enterprise Risk Management. It means the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance to the entity...
, inherent risk and nature of the entity business, and scope of audit work.
- In the audit planning stage, audit evidence is the information that the auditor is to consider for the most effective and efficient audit approach. For examples, reliability of internal controlInternal controlIn accounting and auditing, internal control is defined as a process effected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. It is a means by which an organization's...
procedures, and analytical reviewAnalytical ProceduresAnalytical procedures are one of many financial audit processes which help an auditor understand the client's business and changes in the business, and to identify potential risk areas to plan other audit procedures....
systems.
- In the control testing stage, audit evidence is the information that the auditor is to consider for the mix of audit test of control and audit substantive testAudit substantive testSubstantive procedures are those activities performed by the auditor to detect material misstatement at the assertion level....
s.
- In the substantive testing stage, audit evidence is the information that the auditor is to make sure the appropriation of financial statement assertionsManagement assertionsIn a financial audit, management assertions or financial statement assertions is the set of information that the preparer of financial statements is providing to another party...
. For examples, existenceExistenceIn common usage, existence is the world we are aware of through our senses, and that persists independently without them. In academic philosophy the word has a more specialized meaning, being contrasted with essence, which specifies different forms of existence as well as different identity...
, rightsRightsRights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...
and obligations, occurrence, completenessCompletenessIn general, an object is complete if nothing needs to be added to it. This notion is made more specific in various fields.-Logical completeness:In logic, semantic completeness is the converse of soundness for formal systems...
, valuationValuation-Economics:*Valuation , the determination of the economic value of an asset or liability**Real estate appraisal, sometimes called property valuation , the appraisal of land or buildings...
, measurementMeasurementMeasurement is the process or the result of determining the ratio of a physical quantity, such as a length, time, temperature etc., to a unit of measurement, such as the metre, second or degree Celsius...
, presentationPresentationPresentation is the practice of showing and explaining the content of a topic to an audience or learner. Presentations come in nearly as many forms as there are life situations...
and disclosure of a particular transaction or account balance.
- In the conclusion and opinion formulation stage, audit evidence is information that the auditor is to consider whether the financial statements as a whole presents with completeness, validity, accuracy and consistency with the auditor's understanding of the entity.
See also
- International Standards on AuditingInternational Standards on AuditingInternational Standards on Auditing are professional standards for the performance of financial audit of financial information. These standards are issued by International Federation of Accountants through the International Auditing and Assurance Standards Board .-Respective responsibilities:*ISA...
- ISA 500 Audit EvidenceISA 500 Audit EvidenceEditing ISA 500 Audit Evidence is one of the International Standards on Auditing. It serves to expect the auditor is to obtain audit evidence from an appropriate mix of tests of control systems and substantive tests of transaction and balances....
- HKSA 500 Audit Evidence
- Financial statement assertions
External links
- http://www.auditservices.com/aevidence.html
- ISA (UK and Ireland) 500 - Audit Evidence, concept