What Is Audit Evidence?

The Audit Evidence is one of the International Standards on Auditing. It expects that the auditor is to obtain audit evidence from an appropriate mix of control systems and substantive tests of transactions and other balances.
The strength is that it requests the auditor to obtain sufficient and appropriate audit evidence in order to draw reasonable conclusions.

The audit evidence is however more reliable when it exists in documentary form compared to subsequent oral representation of the matters. The auditors consider reliability of information but involves less authentication of evidence.

Sufficiency and appropriateness are interrelated and supply to evidence obtained from both compliance and substantive procedures. Sufficiency is the measure of the quantity of audit evidence obtained, appropriateness of audit evidence relates to its relevance and reliability. Normally the auditor finds it necessary to relying evidence that is persuasive rather than conclusive. He may often seek evidence from different sources or of a different nature to support the same assertion.

The audit evidence should in total enable the auditor to form an opinion on the financial information. In forming such an opinion the auditor does not normally examine all the information that is available to him because e can reach a conclusion about an account balance, class of transactions or a control by way of judgemental or statistical sampling procedures. The auditor's judgement as to what is sufficient appropriate audit evidence is influenced by such factors as:

• The degree of risk of misstatement.
• The materiality of the item in relation to the financial information taken as a whole.
• The experience gained during previous audits.
• The results of auditing procedures including fraud or error which may have been found.
• The type of information available.

So this is all about audit evidence.

Audit evidence are the information used by the auditor in arriving the opinion on the financial statement

Persuasive
documentation
physical