Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p4
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 4/21)
Character Range: 18698–21826

the entity, the auditor shall evaluate whether the information is sufficiently reliable for the auditor's purposes, including as necessary in the circumstances:

(a)                Obtaining audit evidence about the accuracy and completeness of the information; and (Ref: Para. A60‑A61)

(b)                Evaluating whether the information is sufficiently precise and detailed for the auditor's purposes.  (Ref: Para. A62)

Selecting Items for Testing to Obtain Audit Evidence

10.               When designing tests of controls and tests of details, the auditor shall determine means of selecting items for testing that are effective in meeting the purpose of the audit procedure.  (Ref: Para. A63‑A67)

Inconsistency in, or Doubts over Reliability of, Audit Evidence

11.               If:

(a)                audit evidence obtained from one source is inconsistent with that obtained from another; or

(b)                the auditor has doubts over the reliability of information to be used as audit evidence,

    the auditor shall determine what modifications or additions to audit procedures are necessary to resolve the matter, and shall consider the effect of the matter, if any, on other aspects of the audit.  (Ref: Para. A68)

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Application and Other Explanatory Material

External Information Source (Ref: Para. 5(d))

A1.             External information sources may include pricing services, governmental organisations, central banks or recognised stock exchanges. Examples of information that may be obtained from external information sources include:

           * Prices and pricing related data;

           * Macro-economic data, such as historical and forecast unemployment rates and economic growth rates, or census data;

           * Credit history data;

           * Industry specific data, such as an index of reclamation costs for certain extractive industries, or viewership information or ratings used to determine advertising revenue in the entertainment industry; and

           * Mortality tables used to determine liabilities in the life insurance and superannuation sectors.

A2.             A particular set of information is more likely to be suitable for use by a broad range of users and less likely to be subject to influence by any particular user if the external individual or organisation provides it to the public for free, or makes it available to a wide range of users in return for payment of a fee. Judgement may be required in determining whether the information is suitable for use by a broad range of users, taking into account the ability of the entity to influence the external information source.

A3.             An external individual or organisation cannot, in respect of any particular set of information, be both an external information source and a management's expert, or service organisation or auditor's expert.

A4.             However, an external individual or organisation may, for example, be acting as a management's expert when providing a particular set of information, but may be acting as an external information source when providing a different