Question

Explain Audit Evidence in particular

(i)     Sufficient Audit Evidence
    (ii)    Relevant Audit Evidence
    (iii)    Reliable Audit Evidence

Answer 1

Sufficiency (of audit evidence) – The measure of the quantity of audit evidence. The quantity of the audit evidence needed is affected by the auditor’s assessment of the risks of material misstatement and also by the quality of such audit evidence.

Sufficiency is the measure of the quantity of audit evidence. Appropriateness is the measure of the quality of audit evidence, that is, its relevance and
its reliability in providing support for, or detecting misstatements in, the classesof transactions, account balances, and disclosures and related assertions. The
auditor should consider the sufficiency and appropriateness of audit evidenceto be obtained when assessing risks and designing further audit procedures.The quantity of audit evidence needed is affected by the risk of misstatement
(the greater the risk, the more audit evidence is likely to be required) and alsoby the quality of such audit evidence (the higher the quality, the less the audit
evidence that may be required). Accordingly, the sufficiency and appropriateness of audit evidence are interrelated. However, merely obtaining more audit
evidence may not compensate if it is of a lower quality.