Audit Evidence is persuasive rather than Conclusive - QS Study
QS Study

Audit Evidence is persuasive rather than Conclusive

Audit evidence is evidence obtained during a financial audit and recorded in the audit working papers. In the audit engagement acceptance or reappointment stage, audit evidence is the information that the auditor is to consider for the appointment.

In the words of AICPA-

“Audit evidence is evidence obtained during a financial audit and recorded in the audit working papers.”

Audit evidence is different in different stages of auditing.

(a) Audit engagement acceptance or reappointment stage: Audit evidence is the information that the auditor is to consider for the appointment. For examples, change in the entity control environment, inherent risk and nature of the entity business, and scope of audit work.

(b) Audit planning stage: Audit evidence is the information that the auditor is to consider for the most effective and efficient audit approach. For examples, a reliability of internal control procedures, and analytical review systems.

(c) Control testing stage: Audit evidence is the information that the auditor is to consider for the mix of audit test of control and audit substantive tests.

(d) Substantive testing stage: Audit evidence is the information that the auditor is to make sure the appropriation of financial statement assertions. For examples, existence, rights, and obligations, occurrence, completeness, valuation, measurement, presentation, and disclosure of a particular transaction or account balance.

(e) Opinion formulation stage: Audit evidence is in that the auditor is to consider whether the financial statements as a whole presents with completeness, validity, accuracy, and consistency with the auditor’s understanding of the entity.

For the above reasons, it is said that Audit evidence is persuasive rather than conclusive.