A, Introduction
Internal Auditing Criterion No. 3, also known as “Audit Evidence,” is one of the most important Audit Criteria. Established by The Institute of Internal Auditors, the criterion is intended to strengthen the internal audit process by helping internal auditors obtain the necessary evidence to support the conclusions of their audits. This paper will provide an overview of this Criterion and discuss its importance.
B, Overview of the Criteria
Audit Evidence allows auditors to conduct a thorough investigation of a company’s operations. The goal of the Criterion is to ensure effective and reliable auditing processes by providing auditors with the necessary tools to gather sufficient evidence in a systematic manner. This includes the use of internal controls, interviewing personnel, and obtaining supporting documents or other evidence.
The Criterion outlines the responsibilities of the auditor and the procedures to be followed. It states that the auditor must assess the reliability of evidence and obtain sufficient evidence to support the decisions and opinions of the audit. The criteria also require the auditor to ensure that the evidence has been examined in accordance with the Institute’s Standards of Professional Practice.
C, Importance of the Criteria
The importance of Audit Evidence cannot be overstated. Without sufficient evidence, an audit has limited value as it is impossible to develop reliable conclusions concerning the effectiveness and efficiency of a company’s operations. An important component of the Criterion is the auditor’s ability to obtain evidence from internal and external sources, properly assess its reliability and relevance, and draw reliable conclusions from the evidence.
An effective audit must consider all available evidence and assess its reliability. By ensuring that all available evidence has been considered and evaluated, the auditor can be confident in the accuracy of their conclusions and opinions. Additionally, the Criterion requires auditors to verify the accuracy and completeness of information through inquiries and observations.
D, Conclusion
Internal Auditing Criterion No. 3- Audit Evidence is extremely important for the successful completion of an internal audit. By providing guidance on the necessary procedures that should be followed and the evidence that should be collected, the Criteria ensure that auditors are able to obtain sufficient evidence to support their decisions and opinions. It is critical that auditors adhere to the Criterion’s standards and properly document and assess the evidence in order to provide reliable and accurate opinions regarding the company’s operations.
