Demystifying,the,Auditor,Gathe business, insurance Demystifying the Auditors Gathering of Evidence: Part Three
As we all know to live in this world we have to perform some activity by which we can earn money. There are many activities by which we can earn money and meet the standards to live in this society. And from one of them is franchise. Franc Small offices have unique needs, and thatincludes document shredding. Designed with the smaller business inmind, the Dahle 20314 is a cross-cut shredder that offers Level 3security and brings you into compliance with federal regulations. The
On the other hand, sufficiency of evidential matter relates to the quantity of evidence the auditors should obtain. As previously mentioned, there are no fast rules fixing the number of evidence the auditor should have. In this aspect, the auditor exercises professional judgment, taking in consideration the circumstances in the particular case and the cost of obtaining the evidence. The following principles may aid the auditor in determining the quantity of evidence he may gather:1. The more competent the evidential matter, the less amount of evidence is needed to support his opinion. If the internal control on the processing of credit sales has been evaluated to be effective, from the time sales has been recognized to the eventual payment of the receivable, the auditor could put more confidence that the eventual recording of the transaction is likewise proper. The substantive testing needed for the Receivables and Sales accounts could be reduced to the minimum.2. The more material a financial statement item is, the greater the need for competent evidence. The Salaries and Wages account normally gets more attention from the auditor than Representation or Office Supplies Expense because the former is usually the bulk of a companys expenditure. Depending on the nature of the business, the ordinary and direct expenses related to the income-generating activity of the client are more material than the incidental costs of the business.3. As the risk of material misstatement associated with a particular engagement increases, the more evidence the auditor gathers. If the auditors are engaged to determine if there is fraud involved, the accounting records may not be reliable at all. The risk involved will cause the auditors to assign different weights to various types of evidence than they otherwise would.In evaluating the evidential matter, the auditor considers whether specific audit objectives have been achieved. These objectives are the backbone of the audit procedures the auditor would accomplish in order to have a reasonable basis for his opinion. In doing so, his mind set should be geared on the possibility that there may be material misstatements in the financial statements, and the audit procedures designed should be sufficient to determine such. Having considered relevant evidential matter, regardless of whether it corroborates or contradicts the assertions in the financial statement, the auditor should obtain first sufficient competent evidence before issuing an opinion.
Demystifying,the,Auditor,Gathe