A5 Sufficient Appropriate Evidence Flashcards
Audit Evidence
All info the auditor uses to arrive at conclusions is audit evidence. Evidence is considered sufficient & appropriate when it is reliable and adequate to support the auditor’s conclusion. Auditors rely on evidence that’s persuasive.
Sufficiency
Sufficiency refers to the information obtained from mgmt, specialists, or other external sources.
Sufficient Appropriate Evidence
Refers to the quantity & quality of evidence that has to be enough to form a reasonable basis for an audit opinion, & relevant enough to be reliable in a way that preserves integrity.
Client Provided Information
When auditors is provided with information from client they must determine if it is sufficiently reliable for audit purposes. To be reliable the client information should be accurate, complete, & contain sufficient detail for the auditor’s purpose. What is not required is the info being consistent with prior year’s audit.
Types of Audit Evidence
Accounting records (entries, ledgers, checks, etc.)
Corroborating Evidence (meeting minutes, confirmations, etc.)
Increase in RMM
Increase in RMM = Decrease in DR
Decrease in DR
Decrease in DR requires more persuasive evidence. Auditor must then change the NET
Auditor Bias
Includes availability bias, confirmation bias, overconfidence bias, anchoring bias, & automation bias.
Availability Bias
Tendency to place more weight on events that are more recent or readily available.
Confirmation Bias
Tendency to place more weight on information that corroborates rather than contradicts.
Overconfidence Bias
Overestimating one’s ability to make accurate assumptions
Anchoring Bias
Using initial info as an anchor against which subsequent information is assessed
Automation Bias
Favoring information generated from automated systems
