Acca aa s21 Notes

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3. Sufficient, appropriate audit evidence
So now we know the various procedures to obtain audit evidence, but how much audit evidence is 
needed?
ISA 500 states that there should be:
๏
Sufficient
๏
Appropriate
audit evidence, to be able to draw reasonable conclusions on which to base an audit opinion.
Sufficient 
concerns the quantity of audit evidence. 
Appropriate
concerns the quality of audit evidence - its relevance and reliability. With respect to the 
reliability of audit evidence we can say that, in general:
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External evidence is better than the entity's records. For example, looking at a bank statement or 
a bank certificate is very good evidence about how much cash was in the bank account at a 
particular date.
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Evidence obtained directly by the auditor is better than evidence passed on by the clients. The 
problem is that if the evidence is passed on by the client you don’t know if it’s complete. The 
client could be suppressing information they don’t want you to see.
๏
Audit evidence is better if there is an effective system of internal control. This should mean that 
the checking performed by the client reduces the likelihood of fraud and error.
๏
Written evidence is much better than oral. Someone once said "oral evidence isn’t worth the 
paper it is written on”. If evidence is oral what evidence can you, the auditor, show to prove you 
actually received it?
๏
Originals are better than photocopies. Nowadays with scanners and graphics programs it’s very 
easy to alter documents and these alterations are very difficult to spot. Therefore original 
contracts and documents of title should be sighted. The auditors may take a photocopy to keep 
on their audit file, but they should be taken from the original documents.