Document ID: chunk:federal_register_of_legislation:F2019L00016:reg:20:p8
Version: federal_register_of_legislation:F2019L00016
Segment Type: reg
Provision Reference: reg 20 (pt 8/9)
Character Range: 30954–34055

nature and is primarily obtained from audit procedures performed during the course of the audit. It may, however, also include information obtained from other sources such as previous audits (provided the auditor has determined whether changes have occurred since the previous audit that may affect its relevance to the current audit)6 or a firm's quality control procedures for client acceptance and continuance. In addition to other sources inside and outside the entity, the entity's accounting records and other sources internal to the entity are important sources of audit evidence. Also, iInformation that may be used as audit evidence may have been prepared using the work of a management's expert. or be obtained from an external information source.  Audit evidence comprises both information that supports and corroborates management's assertions, and any information that contradicts such assertions. In addition, in some cases the absence of information (for example, management's refusal to provide a requested representation) is used by the auditor, and therefore, also constitutes audit evidence.

36.               Existing paragraph A9 is amended to read as follows:

Information from sources independent of the entity that the auditor may use as audit evidence may include confirmations from third parties, and information from an external information source, including analysts' reports, and comparable data about competitors (benchmarking data).

37.               Existing paragraph A31 is amended to read as follows:

The reliability of information to be used as audit evidence, and therefore of the audit evidence itself, is influenced by its source and its nature, and the circumstances under which it is obtained, including the controls over its preparation and maintenance where relevant. Therefore, generalisations about the reliability of various kinds of audit evidence are subject to important exceptions. Even when information to be used as audit evidence is obtained from sources external to the entity, circumstances may exist that could affect its reliability. For example, information obtained from an source independent external source of the entity may not be reliable if the source is not knowledgeable, or a management's expert may lack objectivity. While recognising that exceptions may exist, the following generalisations about the reliability of audit evidence may be useful:

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38.               Following existing paragraph A34 the following sub‑heading is inserted:

External Information Sources

39.               The following paragraph A39 (including a footnote 19) is inserted following the above sub‑heading:

The auditor is required by paragraph 7 to consider the relevance and reliability of information obtained from an external information source that is to be used as audit evidence, regardless of whether that information has been used by the entity in preparing the financial report or obtained by the auditor. For information obtained from an external information source, that consideration may, in certain cases,