What is Sufficient Appropriate Audit Evidence in the Audit? (Definition, Explanation, Example, and More)

In practical business affairs, when an auditor conducts an audit of a company’s financial statements, they produce opinions centered around the facts reported. Auditors also have to report whether or not the information provided to the client was true, appropriate, and representing a just view of the company’s financial conditions.

To produce these ideas, however, an auditor needs to verify the credibility of the audit evidence provided. Moreover, without adequate audit proof, an auditor cannot conclude either the company or its financial statements. It is the auditor’s own duty to verify and acquire assurances that perpetuate and support the evidence made accessible.


Appropriate suitable audit proof refers to both the contextual quality and quantity of it. The more transparent the company is with its financial statements, the better it can be evaluated and allow an auditor to produce a fair view of its contents.

The amount of the materials provided corroborates the risk that the company has not mismanaged or misstated its financial provisions. In contrast, the quality ensures that it actually provides utility for the auditor assessing it and generating a conclusion. The auditor should ensure that there is no risk of mishandled or misstated financial records for the quantity of evidence provided. When the risks are larger than usual, the auditor is required to obtain a large quantity of documentation from the company, allowing him to examine it more thoroughly and in a manner that is acceptable to the end-user.

Therefore, assessing the risk factor associated with material misstatement is imperative if the auditor wishes to express solidarity in his conclusion with the evidence provided by the company.

Similarly, for the qualitative side of the aspect, if the evidence supplied is of a higher degree, then the company may choose to supply a lower quantity of it since its quality ensures that the information provided is not only true but also representing a fair view of the company’s financial statements encouraging the auditor to draw their conclusion more comprehensively.

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These are further classified as the following types of evidence:

Sufficient Audit Evidence

The sufficiency of audit evidence narrates the amount of evidence provided. As stated above, the quantity is largely dependent on the risk assessed for the misstatement of materials. Meaning that the auditor themself is accountable for demanding audit evidence as per the requirements stated.

An example of Sufficient Audit Evidence can be seen in fixed assets. An auditor may only need to request one calculation sheet to assess the valuation of the fixed assets should the client have strong internal controls showcasing that the evidence itself is viable enough for the auditor.

Appropriate Audit Evidence

It refers mostly to the quality of the evidence provided. This degree of quality is dependent on the quantity of evidence supplied, co-relating to it. Specific standards are set that define the appropriateness of the audit evidence. These standards set their relevance and reliability in aiding the auditor in drawing the conclusion.


The purpose and declaration against which the audit is being undertaken determine the relevance of the applicable audit evidence. The tests being conducted determine the veracity and relevance of the evidence where they may be required in some cases, while others are unimportant.

An example of this can be that when the existence of certain assets is put into question, the auditor may have to inspect them to clarify the matter further. However, in cases where the obligation or use of the asset is being tested, this factor may be ruled out as irrelevant.

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Another crucial and equally integral factor in determining the correctness of an Audit Evidence is its Reliability. The reliability of any credible material depends on its source, its nature, or the circumstances in which the evidence was obtained. These are crucial elements that define the reliability of evidence without any one of the factors told above. The evidence fails to meet the standards set.

Additionally, there are a few general factors that support the reliability of evidence.

Because this source does not benefit much by faking papers, the Audit Evidence gathered for a third-party source independent of the investigation is more reliable than information obtained from within the organization.

When the Auditor themself obtains evidence by either observation or inspection, that evidence tends to have greater value than the ones provided by the client or their involvement.

Audit evidence that is obtained in black and white is deemed more credible than the one iterated orally. This is also why queries are believed to be insufficient by themselves without any written records alongside them. Another part of this is that original documents rather than photocopies hold more sway in their reliability as evidence compared to the unoriginal.

Factors affecting Sufficient Appropriate Evidence:

Several constituents can often be the distinguishing factor on whether or not auditors are able to achieve their objective of obtaining sufficient appropriate evidence. They involve the following:


There are two types of risks associated with gathering sufficient appropriate evidence. They both correlate to the risk of material misstatement. The inherent risk directs that the greater the chances of misstatement, the more evidence is considered crucial to be provided by the company.

Conversely, the control risk is when internal controls in place are weak or not up to par, in which case the weaker they are, the more evidence is required and in greater quality.

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The greater the materiality, the more evidence is required to support it. It must be sufficient for the auditor to assess it and reach a valid conclusion based on adequate evidence. However, in lower materiality, clients may find ease and may not have to provide as much evidence.

Past Experiences

The auditor’s experience with reference to a client reflects their understanding of the client’s company and its workings. By acknowledging the changes made from the time they were last audited to the current time period, it is more efficient to see how the changes may cause a difference in the audit. Enabling them to perform the audit with sufficiently less evidence as would be required for newer clients.

Source and credibility of Evidence

Based on where the evidence was obtained and the source used helps determine the appropriateness of the evidence. It allows the procedure to be screened comprehensively to gain an insight into the degree of credibility that the evidence offers. Similarly, if an auditor finds an error in the workings of the financial statement, which was not reported, they may have to review their source and the credibility of the evidence to ascertain whether or not that evidence can be used for future references or not.

These factors compromise the sufficient appropriateness of the evidence, and make sure that the material provided is up to par with them is integral to the overall audit procedure. In this manner, the audit can proceed as intended and provide a fair and comprehensive view of the organization’s conditions, allowing the auditor to successfully develop a verdict and report back to the end-user accordingly.

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