Audit evidence
Audit evidence is the documentation collected by an auditor as part of his or her review of the financial accounts, internal controls, and other matters needed to certify a client’s financial statements. The amount and type of audit evidence collected vary by client, depending on the type of industry, the condition of the client’s financial system, and the type of audit. The amount of evidence collected must provide a reasonable basis for the auditor’s opinion. Once collected, the audit evidence is assembled into the auditor’s working papers. The types of audit evidence gathered usually encompass the items noted below [AccountingTools]. The goal of any audit is to determine whether a company's financial statements comply with generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), or another set of accounting standards applicable to an entity's jurisdiction. Publicly traded companies are generally required to present fully audited financial statements to shareholders periodically; thus, the compilation and organization of auditing evidence are essential for auditors and accountants to do their work. In short, auditing evidence is meant to provide auditors with the information to judge whether or not financial statements are accurate and true. Auditing evidence is defined as a term to protect investors by promoting transparent, accurate, and independent audit reports.
The Public Company Accounting Oversight Board (PCAOB), created by the Sarbanes-Oxley Act of 2002, defines auditing evidence as all the information that can be used by auditors to make their decision on the quality and accuracy of a company's financial statements. The auditing evidence supports and verifies the final information provided by management in the financial statements. It can also contradict it if there are errors or fraud. Examples of auditing evidence include bank accounts, management accounts, payrolls, bank statements, invoices, and receipts[Investopedia].
Audit evidence definition. AccountingTools. Retrieved from: https://www.accountingtools.com/articles/audit-evidence
Auditing Evidence: Definition, Characteristics, Example. Investopedia. Retrieved from: https://www.investopedia.com/terms/a/auditing-evidence.asp