List and explain FOUR factors that will influence the auditor’s judgement regarding the sufficiency of the evidence obtained. (6 marks)
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- Materiality
Material items will require more evidence to support them than immaterial items, which might be tested by comparative analytical review only. - Risk
The sufficiency of audit evidence required is affected by the level of risk in the area being audited. - Source and quality of evidence
If the evidence is high quality, then less may be required than if it were of poorer quality. In general, audit evidence from external third parties is more reliable than that from the client’s record because it is independent. Similarly evidence generated by the auditor is more reliable than that from the client. Original documents are more reliable than copies which can be tampered with. - Internal control system
Evidence obtained from the client’s records is more reliable when the related control system is operating effectively (as tested by the auditor).