What is persuasive audit evidence?
What is persuasive audit evidence?
Audit evidence is information obtained by the auditor to draw conclusions to support opinion on the Financial statements. Persuasive audit evidence will be those evidence which are good at persuading someone to do or believe something through reasoning or the use of temptation.
What is the meaning of audit evidence?
Auditing evidence is the information collected by an auditor to ascertain the accuracy and compliance of a company’s financial statements. Examples of auditing evidence include bank accounts, management accounts, payrolls, bank statements, invoices, and receipts.
What is the most persuasive audit evidence?
Although the bank statements are in the possession of the client, they originated outside of the client and, relative to the other responses, they are the most persuasive.
Why audit evidence is persuasive rather than convincing?
5-6 Audit evidence is usually persuasive rather than convincing for two reasons. First, since an audit must be completed in a reasonable amount of time and at a reasonable cost, the auditor examines only a sample of the transactions that compose the class of transactions or account balance.
What are the sources of audit evidence?
5 common sources of substantive audit evidence
- Confirmation letters. Auditors send letters to third parties, such as customers or vendors, asking them to verify amounts recorded in the company’s books.
- Original source documents.
- Physical observations.
- Comparisons to external market data.
- Recalculations.
What is good audit evidence?
Appropriateness is the measure of the quality of audit evidence, i.e., its relevance and reliability. To be appropriate, audit evidence must be both relevant and reliable in providing support for the conclusions on which the auditor’s opinion is based.
What is audit evidence and types?
The auditor can obtain different types of audit evidence, and it includes Physical Examination, documentation, analytical procedure, observations, confirmations, inquiries, etc. The type and amount are dependent on the type of organization that is being audited and the required audit scope.
What types of evidence is most persuasive?
Story. This is something from your personal experience. It may not readily prove your contentions, but it brings them to life. Handled well – which is to say, with authenticity – it can be the most powerful form of evidence.
How do you evaluate audit evidence?
Relevance: You measure relevance by assessing the relationship between the documentation and the management assertion you’re testing. Reliability: You measure reliability by deciding whether the evidence is credible. As an auditor, you should adopt an attitude of professional skepticism.
What is least persuasive type of evidence and explain the examples?
Explanation: The copies of sale invoice which are inspected by the auditor is the least persuasive evidence or we can say it is a conclusive evidence that can be used for auditing. It is also an example of persuasive evidence as there is no solid proof for it and it can influence the decisions.
What are the different types of audit evidence?
Physical Examination. Physical examination is where the audit inspects the asset physically and counts them whenever required.
Audit evidence can be derived from the following sources: Customers: Customers of the company are those the company sells its goods and services to. When a sale is made, it is normal for both the seller (the company) and buyer (the customer) to have the transaction recorded in their accounting books.
What is quality audit evidence?
Quality of Audit Evidences: The quality of audit evidence is very importance to make sure that the conclusion that make by auditor is correct. If the information is not strong or low quality, the audit risks of making incorrect audit opinion is high. The Quality of audit evidence is dependence mainly on the form and source of the evidences.
What is objective evidence audit?
Objective Evidence is physical evidence that someone, when reviewing an audit report, can inspect and evaluate for themselves. It provides compelling evidence that the review or audit was actually performed as indicated, and that the criteria for the audit/review was upheld.
