The auditor‘s operational standard states, ―The auditor should obtain relevant and reliable audit evidence sufficient to enable him to draw reasonable conclusions thereon‖. Required: What factors would influence the judgment of the auditor with regard to sufficiency of audit evidence?

According to ISA 500 ―Audit evidence‖ the auditor‘s judgment as to what is sufficient appropriate audit evidence is influenced by factors such as:
i. The auditor‘s assessment of the nature and level of inherent risk at both the financial statement level and the account balance or class of transactions level.
ii. Nature of the accounting and internal control systems and the assessment of control risk.
iii. Materiality of item being examined.
iv. Experience gained during previous audits
v. Results of audit procedures including fraud or error, which may have been found.
vi. Source and reliability of information available.

NB: Sufficiency of audit evidence refers to the quantity of audit evidence. Audit evidence is considered to be sufficient if auditor can be able to reach a conclusion on an audit objective based on that information.

Appropriate audit evidence refers to the quality of audit evidence, which is assessed in terms of the relevance, and reliability of the evidence.

Relevant audit evidence provides the auditor with audit evidence and information regarding
management‘s assertions of the financial statements. These assertion include:

i. Existence: An asset or liability exists at a given date.
ii. Rights and obligations: An asset or liability pertains to the entity at a given date.
iii. Occurrence: A transaction or event took place, which pertains to the entity during the period.
iv. Completeness: There are no unrecorded assets, liabilities, transactions or undisclosed items.
v. Valuation: An asset or liability is recorded at an appropriate carrying value.
vi. Measurement: A transaction or event is recorded at the proper amount and revenue or expenses are allocated to the proper period.
vii. Presentation and disclosure: An item is disclosed, classified and described in accordance with the applicable financial reporting framework.



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