Audit evidence is typically persuasive rather than conclusive because of the way that it is collected and the results that it gives. Rather than be absolute, auditors prefer to be reasonable in their assurance. This means that they will collect evidence from a number of different sources to support the same assertion. In comparison to conclusive evidence, auditors will not examine all of the information available to them when collecting their persuasive evidence. They are able to draw reasonable conclusions and arguments about a financial statement assertion by using a variety of means of collecting data.
The persuasive evidence is collected using a combination of sufficiency and appropriateness. The two are interrelated and apply to audit evidence that is collected either through substantive procedures or tests of control. While sufficiency measures the quantity of audit evidence, appropriateness measures its quality and reliability as well as its relevance. When seeking audit evidence from tests of control, auditors need to consider the sufficiency and appropriateness of the audit evidence to support the assessed level of control risk. If the audit evidence is being acquired from substantive procedures, auditors need to consider the extent to which the evidence, alongside any other evidence from tests of control, supports the relative financial statement assertions.
The judgments made by an auditor about how sufficient or appropriate evidence are dependent on a number of factors. These include; the materiality of the item being examined, the source and reliability of the information available, the experience gained during previous audits, the findings of the audit procedures, the assessment and of the nature and degree of risk of misstatement and the nature of the accounting and the internal control systems.
For all of these reasons, audit evidence is therefore typically persuasive rather than conclusive. The main aim of audit evidence is to be reasonable and not necessarily absolute.
The persuasive evidence is collected using a combination of sufficiency and appropriateness. The two are interrelated and apply to audit evidence that is collected either through substantive procedures or tests of control. While sufficiency measures the quantity of audit evidence, appropriateness measures its quality and reliability as well as its relevance. When seeking audit evidence from tests of control, auditors need to consider the sufficiency and appropriateness of the audit evidence to support the assessed level of control risk. If the audit evidence is being acquired from substantive procedures, auditors need to consider the extent to which the evidence, alongside any other evidence from tests of control, supports the relative financial statement assertions.
The judgments made by an auditor about how sufficient or appropriate evidence are dependent on a number of factors. These include; the materiality of the item being examined, the source and reliability of the information available, the experience gained during previous audits, the findings of the audit procedures, the assessment and of the nature and degree of risk of misstatement and the nature of the accounting and the internal control systems.
For all of these reasons, audit evidence is therefore typically persuasive rather than conclusive. The main aim of audit evidence is to be reasonable and not necessarily absolute.
