Audit Evidence


The recent reminder from the Chartered Accountants Ireland Professional Standards Department about findings on audit review visits, could have been written ten years ago or more. The same issues keep coming up. They are essentially about the lack of adequate evidence and lack of documentation of the audit work performed.

There are some critical concepts involved in the ISAs on audit documentation (ISA 230) and audit evidence (ISA 500).  Space does not allow us room to list all the requirements but a brief reminder of the key ones is contained here:

Audit documentation:

  • Ensure the documentation is sufficient to allow an experienced auditor, having no previous connection with the audit, to understand the audit work done, the evidence obtained and the results derived from that work (including the assembly of the audit file within 60 days from the date of the audit report);
  • Understand the significant matters arising and the conclusions and significant professional judgements made in arriving at the conclusions (e.g. going concern during CORONAVIRUS (COVID-19).
  • Even where audit work is performed as part of accounts preparation procedures (there is nothing wrong with this per se), the audit evidence obtained from accounts preparation work, must be documented in line with ISA 230.

Audit evidence

It is critical that audit evidence is collected during audits with scepticism in mind.

As is the case in most SME audits, the auditor has few other options but to rely on information produced by the client entity or client personnel. In this case, the auditor must evaluate whether the information is sufficiently robust for the auditor’s purposes and assess whether it is sufficiently accurate/complete and whether it is sufficiently precise/detailed for the auditor’s purposes.

Too often firms fail to get this right, as they rely too heavily on management supplied data, when neither the Directors nor their personnel are not trained or sufficiently experienced to adequately satisfy this purpose.

We have an Audit Update webinar available on our website to remind you of the requirements of the ISAs and how to prepare a good audit file. We also have several audit template letters on this page, up to date for the GDPR and the Coronavirus (COVID-19)

For a full list of all our webinar recordings, please got to our webinar site here. They may be viewed at any time for 12 months after the date of purchase.

We also have a complete set of letters of representation in our publications store, updated for the Coronavirus (COVID-19), and letters of engagement for immediate download here.