A theory of evidence based on audit assertions

Abstract

Abstract. This paper refines a theory of audit evidence in light of recent research in philosophy of science. We improve the definition of confirming evidence and relate it to various audit opinions. Specifically, we identify explanations as a critical component linking evidence to audit assertions. An implication of our work is that professional audit standards setting should put increasing emphasis on the explanations underlying audit assessments.Resume. Les auteurs perfectionnent une theorie relative a I'information probante a la lumiere des travaux de recherche recents en philosophie de la science, Ils raffinent la definition de preuve de corroboration et la relient a diverses opinions du verificateur, De fa9on precise, ils traitent les explications comme un element critique reliant I'information probante aux assertions auxquelles s'interesse le verificateur, Leurs travaux les menent entre autres a la conclusion que les normes professionnelles de verification devraient accorder une place de plus en plus grande aux explications sous-jacentes a ces assertions.

Audit Assertions and Change of Auditors’ Opinion in the Brazilian Market

“…Logo, espera-se que problemas nas afirmações levem a uma modificação na opinião do auditor. As audit assertions fornecem cobertura às maiores fontes de erros presentes nas demonstrações financeiras (Smieliauskas & Smith, 1990). Assim, obter evidências quanto à presença, ou não, de distorções materiais relacionadas a essas categorias de afirmação influencia a opinião que o auditor deve emitir.…”

The art of compromise? The individual and organisational legitimacy of “irregular auditing”

“…Audit quality is traditionally defined as the probability that an auditor will both discover a breach in the accounting system, and report the breach (DeAngelo, 1981). Within the risk‐based conceptual view of modern auditing (Smieliauskas and Smith, 1990), audit quality can be more precisely approached as the fact that the performed audit procedures enable the auditor to gather enough evidence to cover the assertions linked to the financial statements of the audited company. The apparent simplicity of this definition cannot, however, hide one important characteristic of auditing: it is very difficult to specify what an appropriate evidence level is.…”

Discussion of “A theory of evidence based on audit assertions”

“…Unfortunately, the methodology of auditing has languished since the first halting steps to develop it were taken in the 1960s and 1970s. The paper by Smieliauskas and Smith (1990) (SS) is therefore a welcome addition in its attempt to resuscitate the methodology of audit decision making.…”