Which factor is paramount when evaluating the appropriateness of audit evidence?
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Answer: A. The reliability of audit evidence and its relevance in meeting the audit objective
Explanation
Appropriateness of audit evidence is determined by its reliability and relevance. Relevance ensures the evidence addresses the specific financial statement assertion being tested. Reliability depends on the source and nature of the evidence gathered by the auditor. ISA 500 requires evidence to be both sufficient in quantity and appropriate in quality. Documentary evidence is generally more reliable than oral representations from management. Independent sources provide higher reliability than internal client-generated records.
Evaluating appropriateness prevents auditors from wasting time on irrelevant testing procedures. High-quality evidence strengthens the defensibility of the final audit opinion. Audit partners review working papers to ensure appropriate evidence supports all conclusions. Objectivity and integrity describe auditor characteristics rather than evidence appropriateness. Quantity relates specifically to the sufficiency dimension of audit evidence rather than quality. Independence of the source is a factor in reliability but not the sole definition.
- Subject
- Accounting and Finance
- Category
- Auditing
- Topic
- —
- Difficulty
- medium
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