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Demystifying the Auditor?s Gathering of Evidence: Part One Business Articles | July 17 Rush Christian Kirk Jersey , 2007
The result of a company?s daily transaction of business is summarized in the financial statements. In these statements, we can see how established the company is, if it is earning or not, and if it is...


The result of a company?s daily transaction of business is summarized in the financial statements. In these statements, we can see how established the company is Rush Chandler Jones Jersey , if it is earning or not, and if it is using its resources well. As such, the preparation of the financial statements is a complete managerial responsibility. Just because the management has absolute control on the data presented in the financial statements, the users, such as creditors and government regulatory bodies Rush Pat Tillman Jersey , cannot put a high reliance on it.? This is the reason why CPA?s are hired to conduct audits.


The auditor?s responsibility is to express an opinion as to whether the financial statements are presented in accordance with certain criteria, usually generally accepted accounting principles. As part of the process, the auditor has the primary objective of detecting material understatements or overstatements embodied in the financial statements. In order to do so, the auditor gathers evidence to provide an adequate basis for his opinion. To guide the auditor in performing the activity, the Auditing Standards and Practices Council (ASPC) issued Statement of Auditing Standards of the Philippines (SASP) No. 7 ? Audit Evidence and Documentation.? In this statement Women's Hakeem Butler Jersey , the third standard of fieldwork is laid: ?Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under examination.?


It could be noted that the evidential matter should be ?sufficient? and ?competent.? What constitute sufficiency and competence of evidence is a question that constantly perplexes the auditor in planning and performing the audit. Different situations call for different approach; unfortunately, there are no fast rules that can be readily applied to all situations. However Women's Zach Allen Jersey , there are some generalizations made to guide the auditor in obtaining evidence, and these principles affect both the competence and sufficiency of evidence.

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