Sufficiency - sources of evidence, Auditing

Sufficiency - Sources of evidence

The audit evidence should in total enable the auditor to form an opinion on the financial statements.  Sufficiency is a measure of evidence obtained of the quantity.  How much evidence to obtain, what source to use, and the form the evidence should take is an issue left to the auditor to exercise his judgment in the light of the opinion called for under the terms of his engagement.  Of crucial importance however, he will be influenced by the materiality of the matter to be examined, the reliability and relevance of evidence available from each source and the cost and time involved in obtaining it. 

Quite frequently when the auditor obtains evidence from some sources that put when together gives him the necessary assurance.  Factors that affect sufficiency are usually dictated by the degree of risk of misstatement.  The risk itself is affected by the nature of the item, the adequacy of internal control, the nature of the business carried on by the entity, situations which may exact an unusual influence on management, the financial position of the entity, the materiality of the item in relation to the financial statements taken as a whole, the auditor's experience as to the reliability of the management staff of the enterprise and its records, the results of auditing procedures including fraud or error which may have been found and the type of information available.

Posted Date: 1/24/2013 7:20:22 AM | Location : United States







Related Discussions:- Sufficiency - sources of evidence, Assignment Help, Ask Question on Sufficiency - sources of evidence, Get Answer, Expert's Help, Sufficiency - sources of evidence Discussions

Write discussion on Sufficiency - sources of evidence
Your posts are moderated
Related Questions
Valuation - Long Term Contracts The basis of valuation should be cost plus attributable profit as benefits less foreseeable losses and progress payments both receivable and re

Recording the Audit - ISA 230 Purpose of working papers It is necessary which all audit work is documented - the working papers are the tangible evidence of the work co

Audit Procedures - Intangible Assets The auditor's process as far as goodwill is relating would involve as: a) Vouching for details as per the buy agreement of the values

Experts as a source of Audit Evidence Mostly the auditor's work on evidence obtained from along within the entity supported through confirmations from third parties will provi

assume that auditors lost a civil lawsuit for damages and the court found total losses of $5 million. if the auditors were determined to be 30 percent at fault and were the only so

Managements interest in the accounting system Management needs complete and accurate books of accounts because: There is no other way the business can be controlled; Rec

The most effective means for an AUDITOR to confirm his understanding how internal control over financial reporting is designed and operates to test and evaluate its effectiveness.

Interim and Final Audits Whereas the split between the systems and balance sheet audits is concerned with thetype of work covered, that between the interim and final audits is

For each of the following independent situations, state whether you agree or disagree, and briefly explain your answer. (a) Materiality is used only at the planning stage of the

Stock Taking - Audit Process The procedures for carrying out physical stock taking vary in detail according to the circumstances and size of the business and the life of its