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CMA Intermediate · Corporate Accounting and Auditing · Brief Introduction to Auditing Standards

Which statement about audit evidence is consistent with SA 200?

Audit evidence covers information that supports management's assertions and information that contradicts them. In some cases the absence of information, for example management's refusal to provide a requested representation, itself constitutes audit evidence. Accounting records and prior audits can also be sources.

  1. AAudit evidence includes only information that supports management's assertions
  2. BAudit evidence is obtained only from procedures performed in the current year and never from earlier audits
  3. CAudit evidence includes information that contradicts management's assertions, and sometimes the absence of informationCorrect
  4. DEntity's accounting records are not a source of audit evidence

Explanation

SA 200 states that audit evidence comprises both information that supports and corroborates management's assertions and information that contradicts them. In some cases the absence of information, such as management's refusal to give a requested representation, is also evidence. The other options contradict this text.

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