Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p12
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 12/21)
Character Range: 41417–44587

reliability.  For example, information obtained from a source independent 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:

           * The reliability of audit evidence is increased when it is obtained from independent sources outside the entity.

           * The reliability of audit evidence that is generated internally is increased when the related controls, including those over its preparation and maintenance, imposed by the entity are effective.

           * Audit evidence obtained directly by the auditor (for example, observation of the application of a control) is more reliable than audit evidence obtained indirectly or by inference (for example, enquiry about the application of a control).

           * Audit evidence in documentary form, whether paper, electronic, or other medium, is more reliable than evidence obtained orally (for example, a contemporaneously written record of a meeting is more reliable than a subsequent oral representation of the matters discussed).

           * Audit evidence provided by original documents is more reliable than audit evidence provided by photocopies or facsimiles, or documents that have been filmed, digitised or otherwise transformed into electronic form, the reliability of which may depend on the controls over their preparation and maintenance.

A36.         ASA 520 provides further guidance regarding the reliability of data used for purposes of designing analytical procedures as substantive procedures.[16]

A37.         ASA 240 deals with circumstances where the auditor has reason to believe that a document may not be authentic, or may have been modified without that modification having been disclosed to the auditor.[17]

A38.         ASA 250[18] provides further guidance with respect to the auditor complying with any additional responsibilities under law, regulation or relevant ethical requirements regarding an entity's identified or suspected non‑compliance with laws and regulations that may provide further information that is relevant to the auditor's work in accordance with Australian Auditing Standards and evaluating the implications of such non‑compliance in relation to other aspects of the audit.

External Information Sources

A39.         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, include audit evidence about the external information source or the preparation of the information by the external information source, obtained through designing and performing further audit procedures in accordance with ASA 330 or, where applicable, ASA 540.[19]

A40.         Obtaining an understanding of why management