AUDIT STANDARD No 5 – AUDIT EVIDENCE
Audit Standard No 5 defines audit evidence. It sets out the requirements to audit evidence, the types of audit evidence as well as the approach, techniques and procedures to be adopted when obtaining them. This standard shall be applied in all types of audit carried out by the National Audit Office.
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Definition of audit evidence
Audit evidence is the documented information, gathered and examined during the audit in order to support the auditors’ findings, evaluations, opinions and conclusions and used in the preparing of the audit report or audit opinion.
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Requirements of audit evidence
Audit evidence should be:
2.1 Sufficient: to contain sufficient information in terms of quantity and quality to enable the auditor to express findings, evaluations, opinions and conclusions with a reasonable assurance and background.
2.2 Reliable: to include reliable and indisputable facts obtained from appropriate sources using appropriate techniques and procedures.
2.3 Relevant: to include information corresponding to the audit objectives and criteria in logical relation to the audit findings, evaluations, opinions and conclusions.
2.4 Reasonable: to be obtained in an economic and effective way; the costs for their gathering should be commensurable with the result the auditor seeks to achieve from the audit.
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Types of audit evidence
Audit evidence is distinguished according to its nature and the methods used to obtain it:
3.1 Documentary evidence is obtained through examination and tests of existing information in the audited entity. This may include records of decisions taken by management, letters, contracts, accounting documents, management information systems data and other electronic information recognized as document by law and information from external sources (such as bank statements, contractors’ confirmations, statements and conclusions of external experts and other information outside the audited entity).
3.2 Analytical evidence is obtained through calculations, comparisons, analyses of ratios and financial reports, dividing information into components and other analytical procedures.
3.3 Witness evidence is obtained through discussions, interviews, questionnaires, explanations, etc., documented in written.

3.4 Material evidence is obtained through direct measurement, monitoring and examination of property, transactions, activities, events and other facts during the audit.
4. Approach for obtaining audit evidence
Audit evidence is obtained through applying separately or in combination a
System Based Approach and Direct Substantive Testing Approach.
5. Techniques and procedures for obtaining audit evidence
Audit evidence is obtained through examination and tests of documents, analytical procedures, discussions, interviews, questionnaires, written explanations and confirmations, measurement, observation and other techniques and procedures. The different techniques and procedures are applied separately or in combination depending on the audit objectives, the evaluation of the degree of inherent and control risks, preliminary defined materiality, size and representativeness of audit samples, and information sources. The auditor should be reasonably confident that the techniques and procedures applied while obtaining audit evidence are sufficient to detect all material errors and irregularities during the audit.
6. The audit evidence should be documented in accordance with the Working
Papers Standard and the Guidelines for its implementation.
The standard has been adopted at a Board Meeting of the National Audit
Office with Protocol No 30 dated 20.06.2002.
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