Audit evidence are information used by the auditor in arriving at the conclusion on which the auditor’s opinion is based. Audit evidence include both information contained in the accounting records underlying the financial statements and other information.
Auditor obtain audit evidence by performing audit procedures. Audit procedures include substantive procedures, risk assessment procedures and test of controls procedures. Audit substantive procedures include performing recalculation, re performing client procedures, observing client in his work setting, sending confirmation to independent third parties and performing analytical procedures.
To be of use to auditor audit evidence need to be both appropriate and sufficient. Appropriateness measure quality of evidence while sufficiency measure quantity of audit evidence.
Auditor collect audit evidence in order to support his opinion on whether financial statement he is auditing show true or fair view.
Audit evidence is important to auditor since it enable him to reach conclusion on his auditing , also can be used by auditor to defend himself in case he is sued for performing the audit negligently.