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CA Ravi Taori

Audit Evidence Old Course -(P16M/M18R/N18R/M19M/N19R/
QNO Bhaskar CNO SA500.020 N19R/N22R/N23R)
500.01
New course – (N23E)
You are the senior member of the engagement team of M/s BB·& Associates. Before starting the audit, you
explained to other junior assistants about the meaning of Audit evidence. One of the junior assistant is of
the view that audit evidence includes only information contained in the accounting records and no other
information. You are of the opinion that a combination of tests of accounting records and other information
is generally used by the auditor to support his opinion on the financial statements.

In the above context, illustrate with two appropriate examples of each:
(i) Information contained in the accounting records.
(ii) Other information that authenticates the accounting records

OR

Audit evidence includes both information contained in the accounting records underlying the financial
statements and other information. Discuss.
OR
What is “Audit Evidence”?
Answer A combination of tests of accounting records and other information is generally used by the auditor to support
his opinion on the financial statements.

Information contained in the accounting records: Accounting records include
• the records of initial accounting entries and supporting records, such as checks and records of
electronic fund transfers;
• invoices;
• contracts;
• the general and subsidiary ledgers, journal entries and other adjustments to the financial statements
that are not reflected in journal entries; and
• records such as work sheets and spreadsheets supporting cost allocations, computations,
reconciliations and disclosures.

Other information that authenticates the accounting records and also supports the auditor’s rationale behind
the true and fair presentation of the financial statements: Other information which the auditor may use as
audit evidence includes, for example
• minutes of the meetings,
• written confirmations from trade receivables and trade payables,
• manuals containing details of internal control etc.

QNO-- Case Study - Corroborative / Contradictory / Absence of Information New Course – (M24M)
500.01.50 Bhaskar CNO – SA 500.040

Suniti, a CA student, is part of an engagement team conducting audit of a company TIM Private Limited.
According to audit programme, she is responsible for verifying purchases and PPE items appearing in books
of accounts from records/bills of company. Besides, she has also been entrusted responsibility to obtain
written representation from management regarding carrying out of physical verification of inventories
during the year. During course of her work, she finds that:

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