CA Final · Advanced Auditing, Assurance and Professional Ethics · Audit Evidence

In auditing Himalaya Pharma Ltd, the auditor has obtained a large volume of management-prepared schedules supporting inventory existence, but their quality is poor and they are internally generated. The audit partner suggests collecting many more such schedules to make up for the weakness. Which view aligns with SA 500?

More evidence of the same weak kind will not fix the problem. Under SA 500, obtaining more audit evidence may not compensate for its poor quality, so the auditor should obtain higher-quality, more reliable evidence such as corroboration from independent sources.

1. AObtaining more evidence compensates for poor quality, since sufficiency can replace appropriateness
2. BObtaining more audit evidence may not compensate for its poor quality, so the auditor should seek more reliable evidence, for example corroboration from independent sourcesCorrect
3. CQuantity is irrelevant to sufficiency, so no further evidence is needed
4. DQuality matters only where risk is assessed as low