Reliable audit evidence is information that can be trusted and believed by the auditor when forming conclusions. Based on your Audit Planning 3B notes, reliable information has the following key characteristics:
1. Objectivity
- Different auditors examining the same evidence are likely to reach similar conclusions.
- The evidence is free from bias or personal influence.
2. Independence of the Information Provider
- Evidence obtained from external, independent sources is more reliable than evidence generated internally.
- Example: Bank confirmations are more reliable than internal cash records.
3. Effectiveness of the Client’s Internal Control (IC)
- Audit evidence is more reliable when the client’s internal control system is effective.
- Strong controls reduce the risk of errors or manipulation in records.
4. Documented Evidence
- Written or documented evidence is more reliable than verbal explanations.
- Example: A signed contract is more reliable than a verbal agreement.
Summary
Reliable audit evidence is information that is:
- Objective
- Obtained from independent sources
- Supported by effective internal controls
- Documented rather than oral
These characteristics increase the persuasiveness and quality of audit evidence and strengthen the auditor’s conclusions.
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