Page 104 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Interrelationship between Sufficiency (Quantity) and Appropriateness (Quality)
• Higher Quality may lead to lower Quantity.
• Higher Quantity may not lead to lower Quality
Factors affecting Sufficiency: Shortcut -- (MRP)
• Materiality-> Direct Relationship
• ROMM-> Direct Relationship
• Population-> Direct Relationship
Nature of Population:
- Homogeneous- less
- Heterogenous- more

(CNO-SA500.080) Reliable & Relevant
When designing and performing audit procedures, the auditor shall consider the reliability & relevance of the
information to be used as audit evidence

Reliability
Shortcut -- (Think about external confirmation)
1A. Source: Audit evidence is more reliable when obtained from independent external sources.
1B. Form: Evidence in documentary form, such as paper or electronic records, is more reliable than oral
representations.
1C. Nature: Original documents provide more reliable audit evidence than photocopies, facsimiles, or
digitized versions. The reliability of transformed documents depends on the control over their preparation and
maintenance.
1D. Direct Acquisition: Evidence obtained directly by the auditor, such as through observation, is more
reliable than evidence obtained indirectly or by inference.
2. Internally generated audit evidence: The reliability of internally generated audit evidence increases when
the entity's related controls, including those over its preparation and maintenance, are effective.

(CNO-SA500.100) Using the Work of a Management's Expert
Steps before relying on Management's Expert.
Expert Evaluation: The auditor should assess the competence, capabilities, and objectivity of the expert.
Understanding Expert's field Work: The auditor needs to understand the work performed by the expert.
Evaluate the appropriateness of work: The auditor should evaluate the appropriateness of the expert's work
as audit evidence for the relevant assertion.
Competence, Capabilities and Objectivity – Sources of Evidence
Documents
Expert's Qualifications: The auditor can gain knowledge about the expert's competence, capabilities, and
objectivity from their qualifications.
Published Works: The auditor can refer to papers or books written by the expert.

Experience
Past Experience: Personal experience with the expert's previous work can provide valuable insights.
Expert Discussions: Engaging in discussions with the expert can help assess their competence and objectivity.
Third-party Opinions: Discussions with others familiar with the expert's work can also provide useful
information.
Understanding field of Expert
Obtain an understanding of the work of that expert through:
• Aspects of Mgt expert field

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