Corporate Accounting and Auditing · Brief Introduction to Auditing Standards

SA 500 to SA 599: Audit Evidence Explained

Updated 10 October 2026 · Fact-checked

SA 500 to SA 599 set out how an auditor gets and judges audit evidence. Evidence must be sufficient (enough in quantity) and appropriate (relevant and reliable). Related standards cover sampling (SA 530), confirmations (SA 505), analytical procedures (SA 520), written representations (SA 580), experts (SA 620) and related parties (SA 550).

Understand SA 500 to SA 599: Audit Evidence

Audit evidence is the information the auditor uses to reach conclusions for the audit opinion. It includes the accounting records and other information, such as invoices, bank statements, confirmations, and what the auditor sees and recomputes.

The official text of SA 200 says that whether sufficient appropriate audit evidence has been obtained to reduce audit risk to an acceptably low level is a matter of professional judgment. SA 500 and other SAs add requirements and guidance. So there is no fixed list of documents that is always enough. The auditor judges, based on risk.

Sufficiency is the quantity of evidence. Higher risk of misstatement needs more evidence. Appropriateness is quality: relevance and reliability. Evidence is generally more reliable when it comes from independent outside sources, when the entity's controls are effective, when the auditor obtains it directly, and when it is in documentary form (originals, not photocopies).

The SAs in this block deal with specific sources of evidence. SA 505 covers external confirmations, where the auditor gets a direct reply from a third party such as a bank or debtor. SA 520 covers analytical procedures: evaluating financial information through plausible relationships, such as comparing gross profit ratios across years. SA 530 covers audit sampling: testing less than 100% of items in a population so that conclusions can be drawn about the whole. SA 580 covers written representations from management. SA 550 covers related parties and SA 620 covers using an auditor's expert.

Two points tie the topic together. First, the auditor directs effort to areas most expected to contain risks of material misstatement, with less effort elsewhere (SA 200, A49). Second, if evidence is not sufficient and appropriate, the auditor can extend the work, perform other procedures, or check whether other SAs will supply the evidence (A71). If none is possible, the auditor must determine the effect on the report or on the ability to complete the engagement.

Key rules to remember

Audit evidence quality: Audit evidence = Sufficiency (quantity) + Appropriateness (relevance + reliability); Higher assessed risk needs more evidence. Better quality evidence reduces the quantity needed, but poor quality cannot be fixed by collecting more of it.
Analytical procedures vs substantive procedures: Substantive procedures = Tests of details + Substantive analytical procedures; SA 520 analytical procedures can be used as risk assessment, substantive, or overall review at the end. They are not a separate category apart from substantive testing when used to detect misstatements.
Sampling risk: Sampling risk = risk that the sample conclusion differs from the conclusion on testing the whole population; Non-sampling risk arises from wrong procedures or misreading evidence. Increasing sample size reduces sampling risk, not non-sampling risk.
Sampling methods: Statistical = random selection + probability theory to evaluate results; otherwise non-statistical; Both can give sufficient appropriate evidence if properly designed. Using random selection alone does not make a sample statistical.
Written representations: Representation from management = supporting evidence, not a substitute for other evidence; Written representations cannot replace other evidence the auditor expects to be available. Representations on management responsibilities are a precondition to accepting the engagement (SA 200, A10).

How to solve SA 500 to SA 599: Audit Evidence questions

Use this order for any theory or case question on audit evidence and the related SAs.

1Identify which SA the question points to: confirmation (505), analytical (520), sampling (530), representations (580), related parties (550), expert (620), or general evidence (500).
2State the objective of that SA in one line, in your own words.
3Name the assertion or risk involved, for example existence of debtors or completeness of liabilities.
4List the procedure the SA requires or allows, and say why it gives reliable evidence.
5Judge sufficiency and appropriateness: consider risk, source, form and independence of the evidence.
6Say what the auditor does if evidence is not enough: extend work, perform other procedures, or consider the effect on the report.
7Close with a clear conclusion tied to the facts given in the question.

Quickest way: Source-reliability check for MCQs

When to use it: Use it when an MCQ asks which evidence is more reliable or which SA applies.

Match the keyword to the SA: confirmation 505, ratios or trends 520, sample 530, management letter of representation 580, experts 620.
For reliability, rank: external and direct beats internal; documents beat oral statements; originals beat copies.
For representations, remember they never replace other evidence.
Eliminate options that use absolutes such as always or never, unless the SA wording is absolute.

Common mistakes in SA 500 to SA 599: Audit Evidence

Treating management representations as sufficient evidence on their own.
A signed letter looks formal and authoritative.
Fix: Write that representations support but cannot replace other audit evidence the auditor expects to obtain.
Saying more evidence always compensates for poor quality evidence.
Students confuse sufficiency with appropriateness.
Fix: Explain that sufficiency is quantity and appropriateness is quality. Poor quality evidence is not cured by volume.
Confusing statistical sampling with random selection.
Both words sound mathematical.
Fix: Statistical sampling needs random selection and probability theory to evaluate results. Anything else is non-statistical.
Treating analytical procedures as used only at the end of the audit.
Students remember the overall review stage only.
Fix: State that they are used in risk assessment, as substantive procedures, and in the overall review near the end.
Assuming the auditor can be certain evidence is complete and genuine.
Students believe an audit gives absolute assurance.
Fix: Quote the limits: management may withhold information, fraud may involve collusion, and the auditor is not an expert in document authentication or given search powers (SA 200, A47).

Worked examples

Example 1

Your audit client has trade receivables of ₹40,00,000 from 200 customers. Explain how an auditor would obtain audit evidence on their existence using external confirmations, and what to do if a customer does not reply.

Show the solution

Objective: obtain reliable evidence on existence of receivables from the customers directly.
Select items to confirm, using risk and size. Large and unusual balances are chosen first.
The auditor sends the requests and controls the process, so replies come directly to the auditor.
Evaluate replies. A reply from an independent third party is generally more reliable than internal records.
For no reply, perform alternative procedures: check subsequent receipts, examine invoices and dispatch documents.
Judge if the combined evidence is sufficient and appropriate for the risk, and extend work if not.

Answer: The auditor confirms selected balances directly with customers, treats replies as reliable external evidence, and uses alternative procedures such as subsequent receipts and dispatch records for non-responses. If evidence still falls short, the auditor extends work or considers the effect on the report.

Example 2

A company's gross profit ratio was 25% last year and is 31% this year, with no change in selling prices. State how the auditor uses analytical procedures and what follows.

Show the solution

Identify the unusual fluctuation: the gross profit ratio has risen by 6 percentage points (31% − 25%).
Ask management for the reasons, as the change is not explained by prices.
Corroborate the explanation with evidence, such as purchase invoices, closing stock records and cut-off tests.
Consider risks such as overstated closing stock, understated purchases or cut-off errors.
If explanations are not supported, perform further tests of details and extend the work.

Answer: The 6 percentage point rise is an unexpected relationship. The auditor obtains management's explanation, corroborates it with evidence, and performs further procedures on stock, purchases and cut-off if it is not supported.

Exam tips

Write the SA number with the topic in answers. It signals the right framework to the examiner.
For differences, use two or three clear points such as purpose, timing and nature.
Link each procedure to an assertion like existence, completeness or valuation.
In the MCQ section, read all four options. Most traps are absolute words.
In written answers, use headings per step. A neat structure earns step marks.

Practice questions from Brief Introduction to Auditing Standards

SA 500 to SA 599: Audit Evidence in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

SA 500 to SA 599: Audit Evidence: frequently asked questions

What is audit evidence under SA 500?

It is the information the auditor uses to reach conclusions that support the opinion. It includes accounting records and other information. It must be sufficient and appropriate.

What is the difference between analytical procedures and substantive procedures?

Substantive procedures are tests designed to detect material misstatements, and include tests of details and substantive analytical procedures. Analytical procedures under SA 520 compare and evaluate relationships in financial data. They can be used for risk assessment, as substantive tests, and in the final review.

Can written representations replace other audit evidence?

No. Under SA 580 they are supporting evidence only. The auditor must still obtain other sufficient appropriate evidence on the matter.

What does the auditor do if evidence is not sufficient and appropriate?

The auditor can check whether other SAs will supply the evidence, extend the work performed, or perform other procedures judged necessary. If none is practical, the auditor must determine the effect on the report or on the ability to complete the engagement.