What is Audit Evidence?
Audit evidence is all the information an auditor uses to reach conclusions on which to base their audit opinion. It includes accounting records, supporting documents, written representations, third-party confirmations, and the results of analytical procedures. ISA 500 sets the rules for sufficiency and appropriateness.
How It Works
- Plan the audit and identify the assertions to be tested (existence, completeness, valuation, rights and obligations, presentation).
- Gather evidence using procedures: inspection, observation, confirmation, recalculation, re-performance, analytical review, and inquiry.
- Evaluate the evidence for sufficiency (quantity) and appropriateness (relevance and reliability).
- Document the evidence in the audit file to support the final opinion.
Saudi Context
SOCPA-registered audit firms follow the International Standards on Auditing as adopted in the Kingdom. When auditing Saudi VAT, the auditor often confirms balances with ZATCA and obtains bank confirmations directly from local banks under SAMA-supervised processes.
Example
To verify a SAR 4 million bank balance, the auditor mails a confirmation request directly to the bank and receives a signed reply confirming the amount. This external evidence is more reliable than the company’s own bank statement.