THE IMPORTANCE OF THE NEW AUDIT EVIDENCE STANDARD
The new audit evidence standard is a finale of a multiyear exertion to modernize the evidence
standard. The 10 paragraphs of requirements standard will provide current application materials,
guidance, examples and will make the standard more up-to-date and present. The standard will help
auditor with problems associated with working remotely especially during this pandemic like providing
an alternative form of evidence. And with the innovation in business, business transactions, the
internet, social media, etc., the new audit evidence standard will enhance audit quality and
incorporate modernity.
There is an update of the types of evidence that the new audit evidence contains. Whereas the old
standard gathered evidence straightly from the client and paper-based evidence for that matter, the
new standard considers different form of evidence such as third-party evidence, external sources, etc.
Another key area is that the new standard provides guidance on when to be contented with
completeness and accuracy of data and the need to assess reliability of external information.
There is also a modernization of framework with respect to the relevance and reliability of audit
evidence. The principal benefit to audit quality that the new standard provide is to get auditors to focus
on fundamental concepts like accuracy, completeness, susceptibility to bias, etc.
The new audit standard will challenge auditors to think differently. Auditors need evidence that serves
the purpose of what they need considering completeness and accuracy and understanding the client’s
roles over data.
Potential challenges to implementation of the new audit evidence standard
One challenge is that the standard will not tell auditors what to do or what not to do. It requires a
broader thinking about the types of evidence you are gathering and how to document your judgement.
THE IMPORTANCE OF THE NEW AUDIT EVIDENCE STANDARD
To help lessen the challenge, exhibits and examples will be provided on how to apply the standard.
As a principles-based type of standard, there is no step by step procedure manual or formula for the
implementation of the standard. It requires all-inclusive thinking and making professional judgement.
Another interesting thing is that unlike in the past where audit evidence obtained from a source
external to the client was higher quality than information obtained internally from the entity or more
reliable, the new audit evidence standard while still recognizing the concept of reliability and the
credibility of the source of information, does not unavoidably place one source above the other.
Factors such as how precise, how complete, and how accurate is consider in determining reliability and
credibility not source.
In conclusion, as with other standards, there is a need of training. That is why more time is given
before the effective date, 2022-year end.