Question

Discuss any three of the following characteristics of the reliability of evidence. Be sure to explain how the listed characteristic affects the reliability of evidence. 1. Independence of provider 2. Effectiveness of client's internal controls 3. Auditor's direct knowledge 4. Qualification of individuals providing the information 5. Degree of objectivity 6. Timeliness

Answer 1

Ans- Reliability:

Reliability refers to the extent to which a piece of information can be trusted to be accurate or trustworthy. An object can be considered reliable if it produces consistent results on multiple occasions. It is a vital element in the validity of a scientific process or measurement.Reliability is defined as the probability that a product, system, or service will perform its intended function adequately for a specified period of time, or will operate in a defined environment without failure.

How the characteristics affects the reliability of evidence?

2.Effectiveness of client's internal controls — When a client's internal controls are effective,evidence obtained is more reliable than when they are weak.

3.Auditor's direct knowledge — Evidence obtained directly by the auditor through physical examination, observation, computation and inspection is more competent than information obtained indirectly.

5.Degree of objectivity — Objective evidence is more reliable than evidence that requires considerable judgment to determine whether it is correct.

6.Timeliness — The timeliness of audit evidence can refer either to when it is accumulated or to the period covered by the audit. Evidence is usually more reliable for balance sheet accounts when it is obtained as close to the balance sheet date as possible.