3-1 evidence

Evidence was defined in chapter 1 as any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. The information varies greatly in the extent to which it persuades the auditor whether financial statements are fairly stated. Evidence includes information that is highly persuasive, such as the auditor’s count of marketable securities, and less persuasive information , such as responses to questions of client employees.

The use of evidence is not unique to auditors, evidence is also used extensively by scientists, lawyers, and historians,for example, most people are familiar with legal dramas on television in which evidence is collected and used to argue for the guilt or innocence of a party charged with a crime. In legal cases, there are well-defined rules of evidence enforced by the judge for the protection of the innocent. In scientific experiments, researchers obtain evidence to test hypotheses using controlled experiments, such as a drug trial to test the effectiveness of a new medical treatment. Similarly, gathering evidence is a large part of what auditors do. Although these professionals rely on different types of evidence, and use evidence in different settings and in different ways, lawyers, scientists, and auditors all use evidence to help them draw conclusion.

There are six key characteristics of evidence from the perspectives of a scientist doing an experiment, an attorney prosecuting an accused thief, and an auditor of financial statements,there are 6 bases of comparison. Notice the similarities and differences among these three professions.

The bases of comparison as followed:

Use of evidence, nature of evidence used, party evaluating evidence, certainty of conclusions form evidence, nature of conclusions, typical consequences of incorrect conclusions from evidence.