VIETNAMESE AUDITING STANDARDS SYSTEM
Auditing Standard 500: Audit Evidence
(Issued together with Circular No. 214/2012/TT-BTC) (December 6, 2012, Ministry of Finance)
I/ General Regulations
Scope of application
1. This auditing standard specifies and guides the elements constituting audit evidence in a financial statement audit, and specifies and guides the responsibilities of auditors and audit firms (hereinafter referred to as “auditors”) in designing and performing audit procedures to obtain sufficient appropriate audit evidence to draw reasonable conclusions forming the basis of an audit opinion.
2. This auditing standard applies to all audit evidence collected during the audit process. Other Vietnamese auditing standards prescribe and provide guidance on specific aspects of the audit (e.g., Vietnamese Auditing Standard No. 315 – “Identification and Assessment of Risks of Material Misstatement through Understanding of the Audited Entity and its Environment”), or on audit evidence to be gathered relating to a specific matter (e.g., Vietnamese Auditing Standard No. 570 – “Going Concern”), or on specific procedures for gathering audit evidence (e.g., Vietnamese Auditing Standard No. 520 – “Analytical Procedures”), and the assessment of the adequacy and appropriateness of the audit evidence gathered (e.g., Vietnamese Auditing Standard No. 200 – “Overall Objectives of the Auditor and the Audit Firm in Conducting an Audit in accordance with Vietnamese Auditing Standards” and Vietnamese Auditing Standard No. 330 – “Auditor’s Remedies for Assessed Risks”).
3. Auditors and audit firms must comply with the provisions and guidelines of this Standard in the process of collecting and processing audit evidence.
The audited entity (client) and the parties using the audit results must have the necessary understanding of the regulations and guidance of this Standard in order to coordinate work with the auditor and the audit firm and to manage relationships related to the process of providing and collecting audit evidence.
Target
4. The objective of auditors and audit firms is to design and perform audit procedures that enable auditors to gather sufficient appropriate audit evidence to draw reasonable conclusions that form the basis of an audit opinion.
Terminology explained
5. In Vietnamese auditing standards, the following terms are understood as follows:
(a) Documents and accounting records: These include initial records and accompanying documents such as checks, electronic transfer documents; invoices; contracts; General Ledger and subsidiary ledgers, daily journal entries and other adjustments to financial statements not reflected in daily journal entries; and documents such as cost allocation tables, calculation tables, reconciliations and explanatory notes;
(b) Appropriateness (of audit evidence): This is a criterion for evaluating the quality of audit evidence. Audit evidence must be appropriate and reliable to support the auditor in drawing conclusions that form the basis of an audit opinion;
(c) Audit evidence: This includes all of the document, Information gathered by the auditor relating to the audit and based on the document, Based on this information, auditors draw conclusions and form audit opinions. Audit evidence includes: document, information contained in the document, accounting records, including financial statements and such document, other information;
(d) Expert of the audited entity: An individual or organization with professional experience in a specific field outside of accounting and auditing, whose work in that field is utilized by the audited entity in the preparation and presentation of financial statements;
(e) Adequacy (of audit evidence): This is a criterion for evaluating the quantity of audit evidence. The quantity of audit evidence to be collected is influenced by the auditor's assessment of the risk of material misstatement and the quality of each piece of audit evidence.
II/ Standard Content
Requirement
Sufficient and appropriate audit evidence
6. Auditors must design and perform audit procedures appropriate to each circumstance in order to obtain sufficient appropriate audit evidence (see guidance in paragraphs A1–A25 of this Standard).
Document, Information used as audit evidence
7. When designing and performing audit procedures, auditors must consider the appropriateness and reliability of the documentation and information used as audit evidence (see guidance in paragraphs A26–A33 of this Standard).
8. If the documents and information used as audit evidence are created through the work of the audited entity's experts, depending on the importance of the experts' work to the audit purpose, the auditor shall take the following actions to the extent necessary to (see guidance in paragraphs A34–A36 of this Standard):
(a) Assess the competence, ability and objectivity of that expert (see guidance in paragraphs A37–A43 of this Standard);
(b) Find out about the work of that professional (see guidance in paragraphs A44–A47 of this Standard);
(c) Assess the appropriateness of the expert's work used as audit evidence for the relevant assertion (see guidance in paragraph A48 of this Standard).
9. When using documents and information produced by the audited entity, the auditor must assess whether such documents and information are sufficiently reliable for the audit purposes, including (where necessary):
(a) Gather audit evidence regarding the accuracy and completeness of document, information (see guidance in paragraphs A49–A50 of this Standard);
(b) Evaluation of the data document, Is the information accurate and detailed enough for audit purposes (see guidance in paragraph A51 of this Standard)?
Selecting test elements to gather audit evidence.
10. When designing control tests and substantive tests, the auditor must determine an effective method for selecting test elements to achieve the purpose of the audit procedure (see guidance in paragraphs A52–A56 of this Standard).
Inconsistencies, or doubts about the reliability of audit evidence.
11. The auditor must identify necessary adjustments or additions to the audit procedures to address the following issues and must consider the impact (if any) of the following issues on other aspects of the audit (see guidance in paragraph A57 of this Standard):
(a) Audit evidence obtained from this source is inconsistent with evidence obtained from another source; or
(b) The auditor is skeptical about the reliability of document, Information used as audit evidence.
III/ Application Instructions
When implementing this Standard, reference should be made to Vietnamese Auditing Standard No. 200.
Adequate and appropriate audit evidence (guidance in paragraph 06 of this Standard)
A1. Audit evidence is essential to help auditors form an opinion and prepare an audit report. The nature of audit evidence is cumulative and is primarily gathered from performing audit procedures throughout the audit. Audit evidence may also include: document, Information obtained from other sources, such as from previous audits (unless the auditor believes that events occurring since the conclusion of the previous audit may affect this). document, That information is no longer relevant to the current audit, as stipulated in paragraph 09 of Vietnamese Auditing Standard No. 315, or from the audit firm's quality control procedures in considering client acceptance. The audited entity's accounting records (vouchers, ledgers, etc.) are a primary and important source of audit evidence, in addition to other sources from within and outside the entity. document, Information used as audit evidence may be prepared by a professional employed or hired by the audited entity. Audit evidence also includes: document, supporting information that substantiates the Board of Directors' data and also those document, information that contradicts that assertion. Additionally, in some cases, auditors may use the lack of document, Information as audit evidence (for example, when the Board of Directors refuses to provide explanations on matters requested by the auditor).
A2. Much of the work auditors do to form an audit opinion involves gathering and evaluating audit evidence. In addition to interviews, other audit procedures for gathering evidence include testing, observation, confirmation, recalculation, re-performance, and analytical procedures, often performed in combination. While interviews can provide significant audit evidence, including evidence of misstatement, interviews alone are insufficient to provide audit evidence of the absence of material misstatement at the assertion level or of the effectiveness of controls.
A3. As explained in paragraph 05 of Vietnamese Auditing Standard No. 200, an auditor obtains reasonable assurance when they have obtained sufficient appropriate audit evidence to reduce audit risk (the risk that the auditor will give an inappropriate opinion because the financial statements contain material misstatements) to an acceptablely low level.
A4. The sufficiency and appropriateness of audit evidence are correlated. “Sufficient” is a criterion for evaluating the quantity of audit evidence. The quantity of audit evidence to be collected is influenced by the auditor’s assessment of the risk of misstatement (the higher the assessed risk, the more audit evidence is needed) and also by the quality of that audit evidence (the higher the quality of each piece of audit evidence, the less evidence is needed). However, collecting a large amount of audit evidence does not necessarily guarantee the quality of that evidence.
A5. “Relevance” is a criterion that reflects the quality of audit evidence, including the appropriateness and reliability of audit evidence in helping the auditor draw conclusions that form the basis of an audit opinion. The reliability of audit evidence is influenced by its source, content, and the specific circumstances under which the auditor obtained that evidence.
A6. Paragraph 26 of Vietnamese Auditing Standard No. 330 requires auditors to draw conclusions about the adequacy and appropriateness of the audit evidence collected. Auditors must use professional judgment to determine whether sufficient and appropriate audit evidence has been collected to reduce audit risk to an acceptablely low level, and thus draw conclusions that form the basis of an audit opinion. Vietnamese Auditing Standard No. 200 addresses issues such as the content of audit procedures, the timeliness of the preparation and presentation of financial statements, and the balance between benefits and costs. These are relevant factors when auditors make professional judgments about whether sufficient and appropriate audit evidence has been collected.
Sources of audit evidence
A7. Some audit evidence is gathered by performing audit procedures to examine documents and accounting records, for example through analyzing, reviewing, and re-performing procedures performed by the entity in the preparation and presentation of financial statements; comparing different types of document, related information and its use document, that information. Through performing those audit procedures, the auditor can determine that the documents and accounting records are consistent and in agreement with the financial statements.
A8. Reviewing consistent audit evidence gathered from different sources or of varying content often provides auditors with greater assurance than reviewing audit evidence individually. For example, document, Verifiable information obtained from an independent source outside the entity can increase the level of assurance that the auditor obtains from audit evidence obtained internally within the audited entity, such as evidence in documents., Accounting records, meeting minutes, or explanations from the Board of Directors.
A9. Information from independent sources outside the audited entity that the auditor may use as audit evidence includes third-party confirmations, reports from expert analysts, and comparable data on competitors.
Audit procedures are aimed at gathering audit evidence.
A10. In accordance with the provisions and guidelines in Vietnamese Auditing Standards No. 315 and 330, audit evidence used to draw conclusions that form the basis of an audit opinion is obtained by:
(a) Implement risk assessment procedures;
(b) Perform further audit procedures, including:
(i) Testing of controls as required by Vietnamese auditing standards, or at the auditor's option;
(ii) Basic testing, including detailed inspections and basic analytical procedures.
A11. The audit procedures described in paragraphs A14–A25 below may be used as risk assessment procedures, control tests, or substantive tests, depending on the circumstances under which the auditor applies these procedures. As guided in paragraph A35 of Vietnamese Auditing Standard 330, in certain circumstances, audit evidence obtained from prior audits may also provide evidence for the current audit if the auditor performs audit procedures to demonstrate that the audit evidence from prior audits remains relevant to the current audit.
A12. The content and timing of the audit procedures applied may be affected by the fact that some accounting data and document, Other information may only be available electronically or only at a specific point in time. For example, original documents (such as purchase orders and invoices) may only exist electronically when the entity uses e-commerce, or may have been discarded after scanning if the entity uses an image processing system to support storage and retrieval.
A13. The document, Certain electronic information may not be recoverable after a certain period of time, for example, if data files have been modified and there are no backups. Therefore, this depends on the storage policy. document, Regarding the entity's information, the auditor may deem it necessary to require the entity to retain certain information. document, Information for auditor review or for auditors to perform audit procedures at the time of availability. document, That information.
How to
A14. The examination includes the examination of documents, accounting records, or vouchers, which may be from within or outside the entity; in paper, electronic, or other forms; or the examination of physical assets. The examination of documents, accounting records, and vouchers provides audit evidence of varying reliability, depending on the content and source of the audit evidence and the effectiveness of the controls over the process of creating the documents, accounting records, and vouchers within the entity. An example of an examination procedure in control testing is the examination of documents, accounting records, and vouchers to gather evidence of approval.
A15. Certain documents are direct audit evidence of the existence of an asset, for example, a document constituting a financial instrument such as stock or bonds. Examination of these documents may not necessarily provide audit evidence of ownership or value. Additionally, examination of a completed contract may provide audit evidence relating to the application of the entity's accounting policies, such as revenue recognition.
A16. Examination of tangible assets may provide reliable audit evidence of the existence of those assets, but may not provide evidence of the entity’s rights and obligations or the value of the assets. Examination of individual inventory items may accompany an inventory observation.
Observe
A17. Observation is the monitoring of a process or procedure performed by another person, for example, an auditor observing employees of the audited entity conducting an inventory count, or observing the performance of control activities. Observation provides audit evidence regarding the performance of a process or procedure, but is limited to the time of observation and the fact that the auditor's observation may affect how that process or procedure is performed. Vietnamese Auditing Standard No. 501 provides more detailed regulations and guidance on observing inventory counts.
External confirmation
A18. External confirmation is audit evidence obtained by the auditor in the form of a direct response from a third party (the confirming party) in paper form, email, or other form. External confirmation procedures are often used to verify assertions relating to certain account balances and elements of those account balances. However, external confirmation is not limited to account balances. For example, the auditor may request confirmation of the terms of a contract or the entity's transactions with a third party; the request for confirmation may be designed to find out whether any changes have been made to the contract and the content of those changes, if any. External confirmation procedures are also used to gather audit evidence regarding the absence of certain conditions, for example, the absence of a “sub-agreement” that could affect revenue recognition (see detailed guidance in Vietnamese Auditing Standard 505).
Recalculate
A19. Recalculation is the process of checking the mathematical accuracy of data. Recalculation can be performed manually or automatically.
Repeat
A20. Re-performance is the independent performance by an auditor of procedures or controls that have been previously performed by the entity as part of the entity's internal controls.
Analytical procedures
A21. Analytical procedures include evaluating financial information by analyzing the relationships between financial and non-financial data. Analytical procedures also include examining, where necessary, variations and identified relationships that are inconsistent with the data. document, Other relevant information or significant discrepancies compared to expected values (see detailed regulations and guidance in Vietnamese Auditing Standard No. 520).
Interview
A22. Interviews are the process of obtaining financial and non-financial information from knowledgeable individuals inside or outside the entity. Interviews are widely used throughout the audit process alongside other audit procedures. Interviews can take many forms, from formal written interviews to informal oral interviews. Evaluating interview responses is an integral part of the interviewing process.
A23. Interview responses may provide auditors with information previously unavailable to them or provide corroborating audit evidence. Additionally, interview responses may provide information that differs significantly from what was previously obtained. document, Other information that the auditor has gathered, for example, information about the ability of the Board of Directors to exercise control. In some cases, interview responses provide the basis for the auditor to modify or perform additional audit procedures.
A24. In the case of interviews concerning the intentions of the Board of Directors, corroborating evidence gathered through the interviews is important, but document, The information available to support the intentions of the Board of Directors is often limited. In this case, the auditor needs to understand what the Board of Directors has done to carry out its intentions, the reasons why the Board of Directors chose to take a particular action, and the likelihood that the Board of Directors will pursue that particular action to deliver on its promises. document, Information corroborating evidence gathered through interviews.
A25. For certain matters, the auditor may find it necessary to obtain written explanations from the Board of Directors and Management (where appropriate) to corroborate oral interview responses (see detailed provisions and guidance in Vietnamese Auditing Standard No. 580).
Documents and information used as audit evidence.
Suitability and reliability (Guidance in paragraph 07 of this Standard)
A26. As directed in paragraph A1 of this Standard, although audit evidence is primarily derived from audit procedures performed throughout the audit process, audit evidence may also include: document, Information is gathered from other sources, for example from previous audits (in certain cases) and from the audit firm's quality control procedures for client acceptance and retention. The quality of audit evidence is influenced by its relevance and reliability. document, Information that forms the basis of audit evidence.
Suitability
A27. Appropriateness refers to the logical relationship to, or relating to, the purpose of the audit procedure and, in some cases, the basis of the assertion being considered. Appropriateness of document, Information used as audit evidence may be influenced by the audit orientation. For example, if the purpose of an audit procedure is to examine whether the value or existence of liabilities is overstated, then the appropriate audit procedure might be to examine the liabilities recorded in the accounting books. On the other hand, when the purpose of the audit procedure is to examine whether the value or existence of liabilities is understated, then examining the liabilities recorded in the accounting books would be inappropriate; instead, the appropriate audit procedure might be to examine the liabilities recorded in the accounting books. document, Information such as expenses incurred after the financial statement closing date, unpaid invoices, supplier reports, and reports on goods received but not yet verified.
A28. Some audit procedures may provide appropriate audit evidence for certain assertions but not for others. For example, examining documents relating to the collection of receivables after the end of an accounting period may provide audit evidence of existence and value, but not necessarily evidence of timeliness. Similarly, gathering audit evidence on a specific assertion (such as the existence of inventory) does not substitute for gathering audit evidence on another assertion (such as the value of that inventory). Conversely, audit evidence from different sources or of different content may also be appropriate for the same assertion.
A29. Control tests are designed to assess the effectiveness of a control in preventing, detecting, or correcting material misstatements at the assertion level. The design of control tests aims to gather appropriate audit evidence, including identifying conditions (characteristics or attributes) that indicate a control has been implemented, and deviation conditions that indicate a control has not been implemented as designed. The auditor may then examine the existence or non-existence of these conditions.
A30. Substantive tests are designed to detect material errors at the assertion level. Substantive tests include substantive examination and substantive analytical procedures. The design of substantive tests involves identifying the conditions that lead to errors in the assertion and are relevant to the purpose of the test.
Reliability
A31. Reliability of document, The information used as audit evidence and the reliability of that audit evidence are influenced by its source, content, and context. document, Information is collected, including controls over its creation and storage. document, Information is provided when appropriate. Therefore, there are some exceptions to the principles for assessing the reliability of different types of audit evidence. Even when document, Information used as audit evidence that is collected from sources outside the entity may, in some cases, affect the reliability of the audit findings. document, that information. For example, document, Information gathered from an independent source outside the unit may not be reliable if the source document, That information may be incomplete, or the audited entity's experts may lack objectivity. While there are certain exceptions, the assessment of the reliability of audit evidence can be based on the following principles:
(1) The reliability of audit evidence increases when audit evidence is obtained from independent sources outside the entity;
(2) The reliability of internally generated audit evidence increases when the relevant controls, including controls over the creation and storage of such evidence, are effectively implemented;
(3) Audit evidence obtained directly by the auditor (e.g., evidence obtained by observing the application of a control) is more reliable than audit evidence obtained indirectly or by inference (e.g., interviews about the application of a control);
(4) Written audit evidence, which may be on paper, electronic, or other forms, is more reliable than evidence gathered orally (for example, minutes of a meeting recorded concurrently during the meeting are more reliable than a subsequent oral presentation of the issues discussed in the meeting);
(5) Audit evidence is more reliable than original documents, copies, faxes, or filmed, digitized, or electronically transmitted documents whose reliability may depend on controls over their creation and storage. document, Insights.
A32. Paragraph 05(a) of Vietnamese Auditing Standard 520 provides more detailed information on the reliability of data used for the design of analytical procedures in substantive tests.
A33. Paragraph 13 of Vietnamese Auditing Standard No. 240 specifies the circumstances under which an auditor has reason to believe that a document may be inaccurate or may have been altered without the auditor being notified of such alteration.
The reliability of documents and information produced by experts of the audited entity. (Guidance in paragraph 08 of this Standard)
A34. The preparation and presentation of the audited entity's financial statements may require expertise in a field other than accounting or auditing, such as insurance statistics, valuation, or technical data. The audited entity may employ or hire experts in these fields to obtain the necessary expertise for the preparation and presentation of its financial statements, otherwise it would increase the risk of material misstatement.
A35. When document, Information used as audit evidence that is generated through the work of the audited entity's experts should be handled by the auditor in accordance with paragraph 08 of this Standard. For example, an individual or organization may have expertise in applying models to estimate the fair value of securities when no such expertise exists. document, Market information for these securities. If an individual or organization uses expertise to provide an estimate that the audited entity uses in preparing and presenting its financial statements, then that individual or organization is considered an expert of the audited entity and is subject to the provisions of paragraph 08 of this Standard. On the other hand, if the individual or organization only provides data on the prices of private transactions not of the entity, and the entity uses this data in its own estimation methods, then document, If such information is used as audit evidence, it shall be governed by the provisions of paragraph 07 of this Standard, and shall not be considered as the use of expertise by the audited entity.
A36. The content, timing, and scope of audit procedures as prescribed in paragraph 08 of this Standard may be affected by issues such as:
(1) The nature and complexity of the issue involves the expert of the audited entity;
(2) Risk of material misstatement;
(3) Availability of alternative sources of audit evidence;
(4) Content, scope and objectives of the work of the expert of the audited entity;
(5) Experts of the audited entity are employed by the entity or hired by the entity to provide related services;
(6) The extent to which the Board of Directors of the audited entity can control or the degree of influence of the Board of Directors over the work of the expert;
(7) Do the experts of the audited entity comply with the technical standards or other professional requirements of the profession?
(8) Content and scope of the audited entity's control over the work of the entity's experts;
(9) Knowledge and experience of the auditor in the expert field of the audited entity;
(10) The auditor's prior experience with the work of that professional.
Competence, ability and objectivity of the audited entity's experts (guidance in paragraph 08(a) of this Standard)
A37. Competence is demonstrated through the knowledge and expertise of the audited entity's professionals. The ability of the professionals is demonstrated through their use of that competence in specific situations. Factors influencing the professional's ability may include geographical location, time, and available resources. Objectivity is the potential impact of bias, conflict of interest, or the influence of others on the professional judgment of the audited entity's professionals. The competence, ability, and objectivity of the audited entity's professionals, and any control the entity has over the work of those professionals, are all important factors affecting the reliability of the audit. document, Information created by experts.
A38. Information regarding the competence, capabilities, and objectivity of the audited entity's experts can be obtained from various sources, such as:
(1) Personal experience of the expert's previous work;
(2) Discuss with experts;
(3) Discuss with others who are familiar with the expert's work;
(4) Knowledge of the professional's qualifications, certificates of the professional body or organization to which the professional is a member, professional licenses or other forms of external certification;
(5) Published articles or books by the expert;
(6) Experts from the audit firm (if any) assist the auditor in gathering sufficient appropriate audit evidence about document, Information generated by experts of the audited entity.
A39. Issues relating to the assessment of the competence, ability, and objectivity of experts include whether the expert's work must comply with technical standards, professional requirements, or industry requirements; such as ethical standards required for membership of professional organizations or associations, credit standards of degree-granting organizations, or other requirements of law and regulations.
A40. Other issues that may relate to the competence, ability, and objectivity of the expert include:
(1) The suitability of the expert's competence to the problem for which the expert's work is used, including any area within the expert's area of expertise. For example, an expert may have experience in calculating property and casualty insurance premiums, but not much expertise in calculating life insurance premiums;
(2) The expertise of the professional relating to accounting and auditing requirements, such as knowledge of accounting assumptions and methods, including models (if any), is consistent with the applicable financial reporting framework;
(3) Unforeseen events, changes in conditions, or audit evidence obtained from the results of audit procedures that would necessitate a review of the initial assessment of the competence, capabilities, and objectivity of the audited entity's experts while the audit was underway.
A41. There are many factors that can affect the objectivity of an expert, such as the risk of self-interest, the risk of defense, the risk of familiarity, the risk of self-examination, and the risk of intimidation. Safeguards can eliminate or mitigate these risks and may be external (e.g., the expert's professional standards, legal requirements and regulations) or internal (e.g., quality control policies and procedures).
A42. Although safeguards cannot eliminate all risks affecting the objectivity of the audited entity's personnel, risks such as threats may have less impact on personnel hired by the entity than on personnel recruited by the entity, and the effectiveness of safeguards such as quality control policies and procedures may be greater. Because the risk to objectivity is always present for the entity's personnel, personnel recruited by the entity cannot be considered more objective than other personnel of the entity.
A43. When assessing the objectivity of an expert hired by an entity, the auditor may need to discuss with management and the expert any interests and relationships that may affect the expert's objectivity, and any safeguards in place, including the professional requirements applicable to the expert and an assessment of whether those safeguards are adequate. Interests and relationships that may affect the expert's objectivity include:
(1) Financial benefits;
(2) Business relationships and personal relationships;
(3) Other services provided by experts.
Learn about the work of the audited entity's experts (guidance in paragraph 08(b) of this Standard)
A44. Understanding of the work of the audited entity's expert includes understanding of the relevant professional field. Understanding of the relevant professional field can be achieved along with the auditor's decision on whether the auditor has sufficient expertise to assess the work of that expert or whether the audit firm's expert is needed to perform such an assessment (see paragraph 07 of Vietnamese Auditing Standard 620).
A45. Aspects within the expertise of the audited entity's specialists that the auditor needs to understand include:
(1) Does the expert's area of expertise have in-depth sections related to the audit?
(2) Professional standards, other standards and requirements of laws and regulations that must be applied;
(3) Assumptions and methods applied by the expert of the audited entity, the prevalence of the assumptions and methods in the expert's area of expertise and their suitability for the purposes of preparing the financial statements;
(4) Content of document, Internal and external information or data used by the audited entity's professionals.
A46. In cases where an expert is hired by the entity, there is typically a contract or other form of written agreement between the entity and the expert. When examining the work of the expert for the audited entity, evaluating that contract or agreement can help the auditor determine the appropriateness of the following matters for audit purposes:
(1) Content, scope and objectives of the expert's work;
(2) Roles and responsibilities of the Board of Directors of the audited entity and experts;
(3) Content, schedule, and scope of exchanges between the Board of Directors of the audited entity and the expert, including the type of report provided by the expert.
A47. In cases where the expert is recruited by the entity, there is typically no contract or written agreement as described above. Interviewing the expert and members of the audited entity's Board of Directors may be the most appropriate method for the auditor to obtain the necessary insights.
Assessing the appropriateness of the work of the audited entity's experts (guidance in paragraph 08(c) of this Standard)
A48. When assessing the appropriateness of the work of the audited entity's expert used as audit evidence for the relevant assertion, the auditor should take into account issues such as:
(1) The appropriateness and reasonableness of the expert's findings and conclusions, and the consistency of these findings and conclusions with other audit evidence, and whether such findings and conclusions have been appropriately reflected in the financial statements;
(2) The appropriateness and reasonableness of the important assumptions and methods used by the expert;
(3) The suitability, completeness and accuracy of the data sources used by the expert.
Information is created by the audited entity and used for audit purposes. (instructions section) 09(a) – (b) This Standard)
A49. To help auditors obtain reliable audit evidence, document, Information generated by the audited entity and used in conducting audit procedures must be complete and accurate. For example, the effectiveness of auditing revenue by multiplying the list price by the volume of goods sold will be affected by the accuracy of the pricing information and the completeness and accuracy of the sales volume data. Similarly, if the auditor intends to examine a population to find evidence regarding a particular characteristic (for example, examining expenses to find evidence of expenditure approval), the results of the examination will have lower reliability if the selected population for examination is incomplete.
A50. Gathering audit evidence regarding the accuracy and completeness of document, Information can be provided concurrently with the actual audit procedures applied to the audit. document, That information is obtained when the collection of this audit evidence is an integral part of the audit procedure. In other cases, the auditor may have already obtained audit evidence regarding the accuracy and completeness of document, information by applying control tests to its creation and storage. document, That information is available. However, in some cases, the auditor may decide that additional audit procedures are necessary.
A51. In some cases, the auditor may intend to use document, Information provided by the audited entity for other audit purposes. For example, the auditor may intend to use the entity's performance evaluation criteria to perform analytical procedures, or use document, Information generated by the entity to monitor operations, such as internal auditor reports. In that case, the appropriateness of the audit evidence gathered is influenced by whether or not document, Whether the information is accurate or detailed enough for audit purposes. For example, performance evaluation criteria used by the management of the audited entity may not be accurate enough to detect material misstatements.
Selecting test elements to gather audit evidence. (Guidance in paragraph 10 of this Standard)
A52. An effective test will provide appropriate audit evidence to the extent that, when used in conjunction with other audit evidence gathered, will be sufficient for the audit purpose. When selecting elements to test, as required by paragraph 07 of this Standard, the auditor must determine the appropriateness and reliability of document, Information is used as audit evidence; in addition, efficiency is also an important consideration when selecting elements to test. Methods that auditors use to select elements to test include:
(a) Select all elements (check 100%);
(b) Select specific elements;
(c) Audit sampling.
The application of one or a combination of these methods may be appropriate depending on the specific case, such as the risk of material misstatement related to the assertion being examined, and the feasibility and effectiveness of the different methods.
Select all elements
A53. The auditor may conclude that it is most appropriate to test the entirety of the constituent elements of a group of transactions or account balances (or a group within that group). 100% testing is generally not applicable to control testing but is often applied to detail testing. 100% testing may be appropriate when:
(1) The whole is made up of a few elements of great value;
(2) There is a significant risk that other methods do not provide sufficient appropriate audit evidence; or
(3) The repetitive nature of the calculation or other process performed automatically by an information system makes 100% verification more cost-effective.
Select specific elements
A54. Auditors may decide to select specific elements from a population. Factors influencing this decision include: the auditor's understanding of the entity, the assessed risks of material misstatement, and the characteristics of the population being examined. The auditor's judgment in selecting specific elements is influenced by non-sampling risks. Specific elements selected may include:
(1) Large value elements or special elements: Auditors may decide to select specific elements within a population because these elements have high value or possess other characteristics, such as elements that are questionable, unusual, high-risk, or have been previously misrepresented;
(2) All elements have a value higher than a certain valueAuditors may decide to examine all items with recorded values higher than a certain value in order to verify a significant portion of the total value of a group of transactions or account balances;
(3) Elements for collecting documents and informationAuditors can examine these elements to gather information. document, Information about issues such as the nature of the unit or the nature of the transactions.
A55. Although selecting certain elements from a group of transactions or account balances for examination is often an effective method for gathering audit evidence, this is not an audit sampling method. The results of audit procedures applied to elements selected in this way cannot be generalized to the entire population; therefore, the selection of specific elements for examination does not provide audit evidence for the rest of the population.
Audit sampling
A56. Audit sampling is designed to help draw conclusions about the entire population based on the results of testing a sample drawn from that population. Audit sampling is specifically regulated and guided in Vietnamese Auditing Standard No. 530.
Inconsistencies, or doubts about the reliability of audit evidence. (Guidance in paragraph 11 of this Standard)
A57. Gathering audit evidence from different or differing sources may render a particular audit evidence unreliable, for example, when audit evidence gathered from one source is inconsistent with audit evidence gathered from another. This can occur when interview responses from management, internal auditors, and others are inconsistent, or when interview responses from management, given to corroborate interviews with management, are inconsistent with the responses of management. Paragraph 11 of Vietnamese Auditing Standard 230 specifies requirements for audit documentation if the auditor discovers information inconsistent with the auditor's final conclusion on a material matter.
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