AUDIT EVIDENCE Meaning and
Definition
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Audit evidence refers to the information, records, and documents that auditors gather and evaluate during the process of conducting an audit. It encompasses all the relevant data and facts that are sufficient to support the auditor's conclusions and opinions about the financial statements and accounts being examined. This evidence is vital in enabling auditors to form an independent and objective opinion on the accuracy and fairness of the financial information presented by an entity.
Audit evidence can be obtained through various sources, such as inquiring management, performing analytical procedures, inspecting documents and physical assets, and observing procedures being performed. It can also be acquired from external parties, such as banks, customers, suppliers, and legal counsel, to corroborate the financial information provided by the organization under audit.
The quality and reliability of audit evidence depend on its relevance, sufficiency, reliability, and the method used to obtain it. Relevance refers to the degree of connection between the evidence and the audit objective, while sufficiency relates to the quantity of evidence required to support the auditor's opinion. Reliability refers to the credibility and trustworthiness of the evidence, considering its source and nature, and the method used to obtain it.
In summary, audit evidence is the foundation upon which auditors base their judgments and conclusions. It serves as the basis for forming an opinion on the accuracy and fairness of the financial statements and ensuring that the audit has been conducted in compliance with relevant auditing standards and regulations.
Etymology of AUDIT EVIDENCE
The term "audit evidence" is composed of two words: "audit" and "evidence".
The word "audit" originated from the Latin word "audire", which means "to hear". Over time, the meaning of "audit" evolved to include the sense of examining something carefully. In the context of modern usage, an audit refers to an official inspection or examination of financial accounts, systems, records, or processes.
The word "evidence" comes from the Latin word "evidentia", meaning "proof" or "clearness". It signifies the available information, data, or facts that can be used to establish the truth or support a statement, claim, or argument.
Therefore, "audit evidence" refers to the information, data, or facts collected during an audit that serve as proof or support for the audit findings, conclusions, or opinions.
