Explore a quick reference for Standards on Auditing (SA) 500 – Audit Evidence. Learn about the scope, objectives, and key considerations, ensuring sufficient and appropriate audit evidence for a reliable opinion.
Scope of the SA: This SA deals with the auditor’s responsibility to design and perform audit procedures to obtain sufficient and appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion. This SA is applicable to all the audit evidence obtained during the course of audit.
Overall Objectives of the Auditor: To design and perform audit procedures in such a way as to enable the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base auditor’s opinion.
Audit Evidence: Information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based. It includes both information contained in the accounting records underlying the Financial statements and other information.
Appropriateness: It is the measure of quality of audit evidence.
Sufficiency: It is the measure of quantity of audit evidence.
Information to be used as audit evidence:
1. The auditor shall consider the relevance and reliability of the information to be used as audit evidence.
2. When information from management expert is used, the auditor shall evaluate the competence, objectivity of the expert, appropriateness of the expert’s work.
3. When using information produced by the entity, the auditor shall evaluate the reliability, completeness, accuracy of the information.
Audit evidence to draw reasonable conclusions on which to base the auditor’s opinion is obtained by performing:
1. Risk Assessment procedures.
2. Further audit procedures comprising of; Test of controls and Substantive procedures.
The auditor shall determine what modifications or additions to audit procedures are necessary to resolve the matter and shall consider the effect of the matter, if any, on other aspects of the audit.
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