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PSA 500 (Rev.) - PSA 500(Revised Auditing Standards and...

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PSA 500 (Revised) Auditing Standards and Practices Council AUDIT EVIDENCE
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PSA 500 (Revised) PHILIPPINE STANDARDON AUDITING 500 (REVISED) AUDIT EVIDENCE (Effective for audits of financial statements for periods beginning on or after December 15, 2004) CONTENTS Paragraphs Introduction Concept of Audit Evidence Sufficient Appropriate Audit Evidence The Use of Assertions in Obtaining Audit Evidence Audit Procedures for Obtaining Audit Evidence Inspection of Records or Documents Inspection of Tangible Assets Observation Inquiry Confirmation Recalculation Reperformance Analytical Procedures Effective Date Acknowledgment 1-2 3-6 7-14 15-18 19-38 26-27 28 29 30-34 35 36 37 38 39 40-41 Formatted: Indent: Left: 0.75", Tabs: 0.75", Left Philippine Standard on Auditing (PSA) 500 (Revised), “Audit Evidence” should be read in the context of the “Preface to the Philippine Standards on Quality Control, Auditing, Other Assurance and Related Services,” which sets out the application and authority of ISAs.
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AUDITING Introduction AUDIT EVIDENCE (REVISED) PSA 500 (Revised) 1. The purpose of this Philippine Standard on Auditing (PSA) is to establish standards and to provide guidance on what constitutes audit evidence in an audit of financial statements, the quantity and quality of audit evidence to be obtained, and the audit procedures that auditors use for obtaining that audit evidence. 2. The auditor should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. Concept of Audit Evidence 3. “Audit evidence” is all the information used by the auditor in arriving at the conclusions on which the audit opinion is based, and includes the information contained in the accounting records underlying the financial statements and other information. Auditors are not expected to address all information that may exist. 1 Audit evidence, which is cumulative in nature, includes audit evidence obtained from audit procedures performed during the course of the audit and may include audit evidence obtained from other sources such as previous audits and a firm’s quality control procedures for client acceptance and continuance. 4. Accounting records generally include the records of initial entries and supporting records, such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers, journal entries and other adjustments to the financial statements that are not reflected in formal journal entries; and records such as work sheets and spreadsheets supporting cost allocations, computations, reconciliations and disclosures. The entries in the accounting records are often initiated, recorded, processed and reported in electronic form. In addition, the accounting records may be part of integrated systems that share data and support all aspects of the entity’s financial reporting, operations and compliance objectives.
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