Problem: The examination of evidence is essential to the audit procedure. International Standard of Auditing (ISA) 500 states that: the auditors should acquire sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base audit opinion. Evidence is accessible to the auditors from sources under their own control, from the management of the company and from third parties. Each of these sources presents the auditors with varying considerations as to quality of the evidence so produced.
Required:
Question1. Briefly describe what are reliable, relevant and sufficient audit evidences.
Question2. Describe the quality of the following kinds of audit evidence, giving two examples of each form of evidence.
(i) Evidence originated by auditors
(ii) Evidence created by third parties
(iii) Evidence created by management of the client.