On the other hand, the sufficiency of the evidentiary refers to the amount of evidence the auditors should obtain. As mentioned earlier, there are no rules for determining the number of fast evidence of the auditor should have. In this aspect, the auditor exercises professional opinion, taking into consideration the circumstances in the particular case and the cost of obtaining the evidence. The following principles can help the auditor determine the amount of data it can collect:
1. The more relevant the question of evidence, less the amount of evidence necessary to substantiate his opinion. If the internal control over the processing of credit sales has been estimated to be effective, the sale was long recognized the possible payment of the debt, the auditor may place more confidence that the final record of the transaction is also good. The validation tests required for receivables and sales could be minimized.
2. The more material financial statement items, the greater the need for competent evidence. Salaries and wages account is normally more attention of the listener as the representation fee or office supplies because the former is usually the largest portion of an expenditure Companys. Depending on the nature of the business, ordinary expenses directly related to income-generating activity of the client are more material than the incidental costs of the business.
3. Since the risk of material misstatement associated with an increased commitment especially over the testimony of the auditor collects. If the auditors are hired to determine if there is fraud involved, the records may not be reliable at all. The risk will lead the auditors to assign different weights to different types of evidence than normal.
In evaluating the evidence, the auditor considers whether specific audit objectives were achieved. These objectives are the backbone of audit procedures the auditor would meet to have a reasonable basis for his opinion. In doing so, his state of mind should be focused on the possibility that there could be material misstatements in the financial statements and audit procedures should be developed enough to determine these. Having reviewed the relevant material evidence, regardless of whether it supports or contradicts the assertions in the financial statement, the auditor must first obtain sufficient competent evidence before issuing an opinion.